BIO Comments

Re: Docket No. 2004N-0115
Request for Comment on Prescription Drug Importation

Dear Dr. Carmona and Members of the HHS Task Force on Importation:

The Biotechnology Industry Organization (BIO) submits the following
comments in response to the notice published by the Food and Drug Administration
(FDA) on March 18, 2004 (69 FR 12810) regarding the Department of Health and
Human Services’ (HHS’s) Task Force on Drug Importation (the Task Force)
established to study prescription drug importation as mandated by the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 (MMA). The MMA
requires the Secretary of HHS (the Secretary) to conduct a study to explore the
design of a prescription drug importation system that the Secretary may certify as
(1) posing no additional risk to public health and safety and (2) resulting in a
significant reduction in the cost of prescription drugs in the United States.

BIO represents more than 1,000 biotechnology companies, academic
institutions, state biotechnology centers and related organizations in all 50 U.S.
states. BIO members are involved in the research and development of health care,
agricultural, industrial and environmental biotechnology products. BIO and its
members are committed to the safety of the U.S. drug supply. We also support
efforts to increase U.S. consumers’ access to safe and effective prescription drugs.

The Secretary’s Task Force held a Public Meeting on April 14, 2004, at
which BIO briefly presented some of its concerns. We have attached for your
convenience a copy of BIO’s statement presented at that meeting. See Exhibit A.
Additionally, the Task Force seeks stakeholder input in the form of answers to
eleven comprehensive multi-part questions. Below is our response.

COMMENTS SCOPE AND VOLUME OF IMPORTED DRUGS

I. Assess the scope, volume and safety of unapproved drugs, including
controlled substances, entering the United States via mail shipment.
In conducting the study, Congress directed the Department to take into
account the distinctions between drugs that are biological products with
licenses under section 351 of the Public Health Service Act (PHSA) and drugs
with approved applications under subsection (b) or (j) of section 505 of the
Food, Drug and Cosmetic Act (FDCA). The Task Force seeks information
relating to the scope, volume and safety for importation of these differing
types of products.

BIO’s Response:

The MMA, and recent drug importation legislative proposals, expressly
exclude “biological products” from the scope of any reimportation or importation
scheme. BIO agrees with Congress that an explicit exclusion is absolutely
necessary for patient safety. However, even if such an exclusion was drafted to
appropriately capture all biological products, we are still concerned that it would
not adequately prevent the importation of all biological products.

Although current law and these proposals alike manifest an intended
policy of exempting all biotechnology products from the scope of legal importation,
they are not drafted appropriately to account for such products approved under
505(b) of the FDCA. For example, certain biologics, such as human growth hormone
and insulin are not currently excluded and could still be imported.

Importation of unlicensed biological products from unlicensed facilities
is currently illegal, yet the U.S. Food and Drug Administration (FDA) and the U.S.
Bureau of Customs and Border Protection (CBP) have repeatedly documented
personal shipments of biological products that pose serious risks to the individuals
involved. Furthermore, consumers and FDA have obtained, through international
mail and commercial courier shipments, biological products that were:

• improperly packaged;
• maintained at temperatures that hasten their degradation or completely
destroy their effectiveness; and
• diluted, concentrated, or otherwise adulterated.

Consequently, any drug importation regulatory scheme must include
strong enforcement to assure that the illegal importation of biological products is
stopped and patients are protected from these dangerous practices.
Are there product characteristics that might be associated with lower risk
when imported without going through the usual FDA approval and
regulatory process? (For example, the type of product (injectable, controlled
substance, etc.), country of origin of the import, Internet mail-order vs.
personally transported products, manufactured in U.S. (though not approved
for U.S. use) or other country, inclusion of U.S.-approved patient labeling, or
characteristics of the shipping entity (e.g., pharmacy that primarily serves
individuals of another nation, vs. a pharmacy set up primarily or entirely to
handle drugs that will be consumed by residents of the United States).

BIO’s response:

For the reasons discussed in response to the first question, BIO
believes that the exclusions included in the MMA must be maintained, extended
and enforced. Additionally, biotechnology products approved under the FDCA,
parenteral products, all injectables not just intravenously injected drugs, products
requiring refrigeration during storage and shipping, and photoreactive products
should also be excluded. Furthermore, the Task Force should consider the countries
of origin or countries through which imported drugs may be transshipped in
determining whether importation should be permitted.
Division of Dockets Management (HFA-305)
When in international trade, articles often move through different
countries before export to a final destination (i.e., a recipient in the U.S.). These
“transshipments” generally occur through bonded warehouses. Products shipped to
and stored in bonded warehouses are not destined for sale in the country through
which they are shipped and, therefore, are not ordinarily “in” the domestic
commerce of the country where the warehouse is located for tariff, duty, fee, and in
many cases, regulatory oversight purposes. As a result, regulators in those
countries focus little or no attention on these products.

Consequently, it is inappropriate to rely on other countries’ laws to
protect U.S. customers – the countries through which the products are shipped
(including Canada and members of the European Union) have little if any ability to
exert regulatory controls over those products. These issues are discussed more fully
in our response to section

III.The Task Force seeks information on whether or not these imports, or some
of these imports, could meet U.S. approval standards or the equivalent.
What is the scope and volume of drugs commercially available in other
countries that are actually FDA-approved?

BIO’s response:

FDA approval has long been viewed as the international “gold
standard.” Therefore, we are puzzled by the phrase “U.S. approval standards or the
equivalent.” Absent full FDA review and approval, a drug unapproved by FDA is
just that – unapproved.

FDA stated just last month that the “overwhelming majority” of drugs
intercepted by FDA and CBP in the international mail system are “unapproved.”
Therefore, if FDA-approved drugs are widely available in foreign markets,
apparently they are not being sent to U.S. consumers attempting to fill
prescriptions overseas.

Different countries impose different regulatory requirements on the
domestic sale of drug products. Therefore, a drug approved in another country may
not be bioequivalent to or have the same bioavailability as an FDA-approved drug –
even if the foreign drug contains the same active ingredient as the FDA-approved
product. This is particularly true for biological products. A biological product
similar to an FDA-approved version will likely be produced in a different facility
even if it is made by the same manufacturer. That difference alone can produce a
biological product with different biological activity or therapeutic effect.
The Task Force should also be aware that some legislative proposals
would permit the legal importation of virtually any version of a drug available
around the world which differs from its FDA-approved version, not merely those
versions legally marketed in the countries deemed eligible to export to the U.S.
Because the number of drug product variants marketed worldwide is unknown, this
potential for “virtual transshipments” of foreign drug products would place an
insupportable burden on the FDA.

Consequently, FDA does not adopt any other country’s “approval
status” for drug products and many other countries do not admit drugs based solely
upon FDA-approval status. Therefore, BIO does not believe that the Task Force
should consider adopting another country’s approval standard as the “equivalent” of
FDA approval for importation purposes.

For imported drugs that are not U.S.-approved, what approaches can be used
to determine whether they are equivalent to U.S.-approved drugs?
BIO’s response:

The drug approval process in the United States requires an affirmative
demonstration of safety and effectiveness before any drug or biologic may be
marketed. Innovator drugs, for example, cannot be marketed until the
manufacturer has made an independent demonstration of safety and effectiveness
through clinical trials. Generic drugs are shown to be safe and effective through a
demonstration of “sameness” and bioequivalence to previously-approved drugs. BIO
opposes any approach that would sanction a third class of drugs – those approved
overseas under varying approval standards that are then brought into the U.S. as
“equivalents” to FDA-approved products. Any proposal to allow broader
importation of non-FDA approved products assumes that implementation of such an
untested regime would be at least as reliable, consistent, comprehensive and
efficacious as the FDA’s current system of drug approval and regulation in assuring
safety, effectiveness and product identity. If foreign companies can obtain access to
the U.S. market under a less rigorous standards for entry, consumers will lose the
protections of the existing system – which was established by Congress to protect
those very consumers.

Should certain products be excluded from importation because of special risk
concerns? What impact would limiting the number, types or categories of
drugs that would be legally authorized to be imported have on the ability of
the FDA and other Federal agencies to assure the safety of such products?
The Task Force seeks input on how to establish risk-based criteria for any
such limitations, e.g., chronic-use medicines, small-molecule drugs less
sensitive to shipping conditions, medicines with wide therapeutic indices,
medicines not subject to risk management or controlled-substance
restrictions, medicines not prone to misuse.

BIO’s response:

In addition to the exclusions in the MMA, BIO believes the following
class of products should be excluded from any proposed drug importation program:
• All biotechnology-derived products, approved under either the FDCA or PHS
Act.
• Products requiring special storage or handling requirements (e.g.,
temperature, light conditions, careful handling, etc.). CBP inspectors may
hold imported products at the border indefinitely while admissibility is
pending. By the time these products reach the consumer, undue delays and
improper storage conditions could affect the product’s stability.
• Products requiring risk management, initial screening, and/or periodic
patient monitoring programs should be prohibited. FDA and CBP have
discovered during their import blitz examinations drugs that require close
monitoring, or administration by a physician. Delivery of these products
directly to patients without the knowledge or oversight of a physician can
pose an unacceptable risk to patients.

• Drugs with dangerous interactions or those that are labeled with FDA
mandated “black box” warnings should be prohibited.
• As discussed in response to the first question, FDA’s blitz campaigns
discovered imports of unlicensed biologic products that should be
administered by healthcare providers, such as the influenza virus vaccine.

These imports are currently unlawful and should remain unlawful.
Additionally, it is important to recognize that exclusions are extremely
difficult to administer. It is unlikely that FDA or CBP inspectors will be able to
efficiently and effectively target shipments that contain prohibited products. Even
if border inspectors could accurately target inspections, their ability to distinguish
between prohibited and permitted drug products would be a costly and time
consuming exercise in frustration and futility.

Restricting drug importation to a designated list of permitted drug
products or categories might appear to hold promise for making a drug importation
inspection regime manageable. However, CBP and FDA inspectors would still have
to open each package in each shipment to ensure its contents were permitted and
had undergone appropriate quality assurance testing. Certification of a drug
importation program is likely to dramatically increase the number of shipments
subject to review by border inspectors. Moreover, the varieties of drugs being
imported will likely increase so that any given package may contain both prohibited
and permitted drugs. Therefore, border inspectors will have to make substantially
more difficult judgments than those required under FDA’s personal importation
policy.

BIO believes these operational complexities will prevent the agencies
from effectively implementing any restrictions intended to limit the scope of drug
products eligible for importation under any system other than the current
requirements of the FDCA, as amended by the Prescription Drug Marketing Act
(PDMA).

IMPACT ON PHARMACEUTICAL DISTRIBUTION SYSTEM
II. Assess the pharmaceutical distribution chain and the need for, and feasibility
of, modifications in order to assure the safety of imported products.
Should legal importation be limited to wholesale shipments, rather than a
much higher volume of small individual drug shipments?
BIO’s response:

The FDA’s current personal importation policy poses significant
challenges to the agencies charged with assuring the safety of imported drug
products. The volume and variety of drugs entering the United States that violate
federal and state laws continue to climb. FDA and CBP have repeatedly stated that
they are unable to inspect the vast quantity of imported mail and express
consignment packages that enter the U.S. containing drugs for personal use. If
personal importation continues, the volume of such shipments will grow --resulting
in uncertified, unlicensed, or unregistered facilities from around the world shipping
drug products directly into the U.S. market.

BIO is concerned that consumers lack the knowledge and tools
required to assess the attributes of these drug much less their manufacturers,
distributors, sellers, shippers, country of origin, or the regulatory oversight they
might have received overseas. Consumers will not be adequately protected under
any regulatory scheme that permits importation where these factors are unknown
or uncontrolled.

Would additional requirements for drug pedigree and “track and trace”
records be useful in assisting FDA and other Federal and state agencies to
assure the security of these drug imports, i.e., to prevent the introduction of
drug products from illegitimate sources? What other mechanisms would be
required to enable tracking these products to ensure compliance with
applicable considerations or restrictions that are put on them as a result of
U.S. law or regulations?

BIO response:

FDA already has the authority to implement a robust drug pedigree
system that would assist substantially in controlling illegal diversion and would
decrease drug counterfeiting in the U.S. Therefore, BIO strongly encourages the
Task Force to recommend and FDA to implement final regulations published in
1989 requiring wholesalers to maintain a pedigree for prescription drugs as
mandated by the Prescription Drug Marketing Act of 1987 (PDMA). The PDMA
sought to ensure greater accountability for the movement of prescription drugs
between licensed and unlicensed prescription drug wholesalers and to prevent the
introduction of counterfeit drugs via uncontrolled secondary and tertiary wholesale
markets. However, since 2000, FDA has delayed implementing the pedigree
requirement. Over approximately the same time frame, the number of FDA
counterfeit drug investigations has increased four-fold. 9/ BIO is very concerned
that opening the U.S. borders to prescription drug importation will also open an
avenue for many more counterfeit drug products. A robust drug pedigree system
protects against more than counterfeit drugs – it also helps in assuring that lawful
prescription drugs are properly handled and stored during distribution and are not
commingled with illegal products. One has to recognize the limits of the pedigree
law since it would only apply to products manufactured in the U.S. for U.S.
consumption.

Alternatively, any certified drug importation program must at a
minimum require:

• the use of authentication and track and trace technology to ensure that
imported products are in fact what they purport to be, that they are the
product of the declared manufacturer, and that they have not been
distributed through multiple countries before export to the U.S.;
• every person handling imported product be licensed and subject to routine
mandatory FDA inspections and audits to assure that health and safety
regulations are followed including quality assurance testing of each product;
• licensed distributors to immediately report to FDA any counterfeit drugs they
encounter, irrespective of whether the drug is destined for the U.S. market or
another market;
• all prescription drugs imported under the program be physically held at the
first U.S. port of arrival until such time as FDA inspects and releases them
into commerce;
• each shipment be filed as a formal CBP entry to ensure adequate control of
the entry;
• each entry be covered by a single entry bond sufficient to cover a CBP claim
for liquidated damages equal to the article’s domestic retail value should the
bond principal fail to comply with a bond condition; and
• the importer of record that posts a bond for any drug shipments be based in
the United States.
Although these recommendations may assist in controlling the flow of
drugs under a certified scheme, they will not be effective if the volume of personalshipments through international mail or express consignment couriers is permitted
to increase.

III. Determine the extent to which foreign health agencies are willing and able to
ensure the safety of drugs being exported from their countries to the U.S.

BIO response:

BIO does not believe that any foreign country can adequately protect
U.S. consumers from adulterated, misbranded, or unapproved imported drugs.
Reliance upon foreign regulatory requirements to supplant or replace the
assurances of our domestic system of drug approval and regulation would be
unprecedented. The FDA is an important participant in extensive global efforts
through the International Conference on Harmonisation (ICH) to minimize
unnecessary duplicate testing during the research and development of new drugs
and to develop guidance documents that create consistency in the requirements for
new drug approval. Yet even the ICH is not intended in any way to permit or
facilitate the substitution of compliance with one nation’s regulatory requirements
for another nation’s regulatory requirements.

Many American consumers attempt to import drugs from Canada
because they believe that Canadian law will protect them from such products. But,
nothing in the MMA will assure U.S. consumers that drugs exported from Canada
are the same as drugs in Canadian commerce intended for Canadian consumers.
This concern arises from two basic premises of international trade.

First, most countries including Canada exercise little or no regulatory oversight to
goods leaving the country. Therefore, no Canadian law requires that drugs which
are not in Canadian domestic commerce meet certain health and safety standards
before they may be lawfully exported. Second, goods may move in international
commerce and be held in certain countries including Canada without formally
entering those countries. Under the trade laws, bonded warehouses may hold goods
that are in international commerce but that have not formally been imported under
the laws of that country. As a result, goods may flow through Canada and be
exported to the United States without ever being subject to Canadian law. As a
result, it would be inappropriate for the Secretary to rely on Canadian regulations
or laws – or the regulations or laws of any other country – to protect U.S. citizens
from adulterated, misbranded, or counterfeit drug products.

A further explanation of bonded warehouses is instructive. Canadian
law permits a shipper or importer to bring foreign-made goods into Canadian
Customs bonded warehouses in Canada as long as the goods are not intended for
sale in Canada. Moreover, Canada’s Food and Drug Act and regulations only apply
to drugs that are imported “for sale” in Canada.10/ Therefore, drugs imported into
warehouses in Canada may be entirely outside of Health Canada’s authority unless
or until they enter through Canadian Customs for commercial consumption in the
domestic commerce of Canada.

In May 2003, Canada’s Health Products and Food Branch addressed
this issue. It issued a guidance document concerning import and export of certain
drugs. The document applied Canada’s drug GMP requirements to drugs “imported
into Canada for commercial purposes.” On May 1, 2004, Health Canada issued
another guidance document regarding unapproved drugs imported for packaging or
labeling and subsequently exported to a foreign company. As long as the foreign
company retains title to the drugs while they are physically packaged or labeled in
Canada by a Canadian establishment, “such drugs are not sold in Canada.”
Private companies operate bonded warehouses and routinely lease

space to carriers, shippers, distributors, importers, and exporters. Thus, drugs
unapproved by Health Canada may be shipped to a Canadian bonded warehouse for
repackaging, sorting, and labeling – just the types of activities internet pharmacies
and drug distributors are likely to engage in – then be exported to the United States
yet never fall under the scope of Canadian law. This creates chain of custody
problems because it will be very difficult to trace the drug’s ownership. Therefore,
the fact that drugs may be exported from Canada can provide no assurance that the
drug has ever received regulatory approval or oversight from the Canadian
government or its laws.

BIO believes that the scenario described above is the rule rather than
the exception and that other countries similarly exercise very limited oversight to
drug products being exported to other countries. Therefore, BIO urges that any
certified importation scheme expressly prohibit drugs that are transshipped
through third party countries before they are exported to the U.S. Implementation
of this scheme may pose some important challenges and may require an important
commitment of resources by the administration.

ADEQUACY OF SAFETY PROTECTIONS AND RESOURCES

IV. Identify the limitations, including limitations in resources and in current
legal authorities that may inhibit the Secretary’s ability to certify the safety
of imported drugs.

What impact would restricting importation to products manufactured in
certain countries (e.g., U.S.) have on adequately regulating those products?
How would limitations on importations relating to products shipped from
certain countries, certain entities within countries, and/or certain ports of
entry affect the ability to assure drug safety?

See response to III above.

V. Estimate agency resources, including additional field personnel, needed to
adequately inspect the current amount of pharmaceuticals entering the
country.

BIO offers no response to this question. However, BIO anticipates and
hopes that the U.S. government will provide significant additional resources to the
FDA and the CBP to ensure the integrity and safety of the drug supply.
VI. Identify ways in which importation could violate U.S. and international
intellectual property rights and describe the additional legal protections and
agency resources that would be needed to protect those rights.

BIO’s response:

Illegal drug importation directly undermines U.S. intellectual property
and contract rights. It seriously and negatively impacts innovative efforts and
investment in the pharmaceutical industry. Pharmaceutical and biotechnology
innovators spend significant capital on research and development of new therapies
with the expectation that U.S. patents will protect their efforts and investments.
These are valid and enforceable intellectual property rights under U.S. law.
Drug importation undermines the ability of patent holders to enforce
patents through infringement actions. Under current law, the importation of
unapproved drugs that purport to be the same as an FDA-approved patented drug
infringes valid and enforceable U.S. patents. Such imports also constitute an
unfair trade practice. Drug importation will directly undercut the ability to
obtain and enforce a general exclusion order from the International Trade
Commission for such practices.

Furthermore, drug importation allows parallel trade in prescription
pharmaceuticals. Federal law currently prohibits the unauthorized use of a
registered trademark when such use is likely to cause confusion or mistake, or to
deceive. Drug products that are manufactured to comply with foreign regulatory
requirements often do not comply with FDA requirements. Therefore, foreign
shippers of imported drugs that promote their sales through the unauthorized use
of registered trademarks are likely to cause confusion among patients, pharmacists,
and physicians as to the bioequivalence or approval status of the imported drugs –
potentially violating the Lanham Act. Thus, any drug importation that permits
parallel trade in branded prescription drugs weakens a registered trademark
holder’s ability to enforce its intellectual property right and substantially devalues
that right.

Finally, many biotechnology and pharmaceutical companies license
portions of their rights to other companies. For example, a company might license
rights to sell a particular product overseas and retain the U.S. rights. When the
European version is imported, the value of that license decreases.
All of these rights are currently being undermined through illegal
importation and will be substantially undercut if importation is sanctioned by the
U.S. government. Such a program will directly undermine the basic business model
underpinning the drug and biotechnology industries, from drug discovery to drug
dispensing. The result will be harm to U.S. pharmaceutical and biotechnology
innovation and reduced and delayed patient access to innovative and necessary new
drugs and biologics.

ROLE OF NEW TECHNOLOGIES

VII. Estimate the costs borne by entities within the distribution chain to utilize
anti-counterfeiting technologies that may be required to provide import
security. We refer the Task Force to the report recently published by the
Congressional Budget Office (“CBO”). CBO estimates that the savings from even a
broad, multiple-country importation proposal would at most be modest. The cost of
technologies, which should be required to ensure authenticity of drugs imported
under a certified program, would further reduce these savings.16 Additionally, it is
not reasonable or equitable to require manufacturers to bear the costs of new
requirements or technologies under any proposal to expand drug importation
beyond the current requirements of the FDCA, as amended by PDMA, when the
resulting importation activities would be undertaken by entities other than the
manufacturers.

LIABILITIES, OTHER COSTS, AND IMPACTS ON INNOVATION

VIII. Assess the potential short- and long-term impacts on drug prices and prices
for consumers associated with importing drugs from other countries.
BIO offers no response to this question.

IX. Assess the impact on drug research and development, and the associated
impact on consumers and patients, if importation were permitted.
What would be the impact on research and development of drugs and the
associated impact on consumers and patients, if changes in importation laws
were to be implemented?

BIO response:

Please see our answer to section VI above.

X. Identify The Liability Protections, If Any, That Should Be In Place If
Importation Is Permitted For Entities Within The Pharmaceutical
Distribution Chain.

BIO response:

BIO believes that any drug importation scheme (including current,
illegal importation) complicates the movement of drugs from manufacturer to
consumer. This will provide increased opportunities for mishandling, improper
storage, mix-ups, and the commingling of legitimate drugs with adulterated,
16/ See Congressional Budget Office, Would Prescription Drug Importation Reduce U.S. Drug
Spending? CBO Economic and Budget Issue Brief at 6, ftp://ftp.cbo.gov/54xx/doc5406/04-29-
PrescriptionDrugs.pdf. (Apr. 29, 2004). unapproved, and counterfeit drug products. Unlike the current requirements for importation under the FDCA, as amended by PDMA, such a scheme could exponentially increase the chances that the use of imported drugs would be adverse
to the public health due to circumstances and conduct entirely beyond the control of
manufacturers.

Patients who are harmed by an imported drug will likely seek
compensation from the manufacturer. In recent years, there have been an
increasing number of lawsuits filed as a result of the distribution and sale of
counterfeit pharmaceuticals within the United States. If a drug importation
scheme is put in place, manufacturers will need increased protection from these
types of lawsuits because importation and re-importation increase the risk that
counterfeit product will find a way into the chain of distribution, and it will be
virtually impossible for buyers and FDA to track the chain of distribution of
counterfeit products that have entered the U.S.

Incidents of drug counterfeiting are on the rise. A recent article in the
New England Journal of Medicine states, “The number of investigations of possible
counterfeit drugs by the Food and Drug Administration has jumped from 5 per year
in the 1990s to more than 20 per year since 2000.” Counterfeiters are especially
drawn to high-cost drugs and biologics, particularly expensive injectables.
In addition, counterfeiters have become increasingly sophisticated.

Former FDA Commissioner, Mark McClellan, recently noted that drug
counterfeiters now have access to state-of-the-art production equipment including
modern punch tools and dyes. Thus, counterfeiters have largely shifted their
activities toward producing finished products – imitations of popular, high-value
pharmaceuticals. Counterfeiting of finished products is even more difficult for
investigators to detect.

While counterfeiting is increasingly problematic in the United States,
less than one percent of drugs in the U.S. are believed to be counterfeit. These
numbers are dramatically higher overseas. “Reports from Asia, Africa and South
America indicate that 10 to 50 percent of prescription drugs in certain countries
may be counterfeit. In India, the number of counterfeit drugs is so high that the
Indian parliament is expected to pass a bill authorizing the death penalty for drug counterfeiters.” Similarly, “according to [the] FDA, up to 40% of the Mexicanmade
pharmaceutical supply is counterfeit.” Thus, opening the U.S.
pharmaceutical market to importation and re-importation will increase the risk
that counterfeits will enter the chain of distribution in the U.S.

If it is difficult to track and locate counterfeit product now, it will be
almost impossible to do so when drugs are coming into the U.S. from Canada and
overseas. A buyer today has a difficult time tracing a chain of distribution that
includes transactions made on the basis of a handshake and deals cut in backrooms.
That same buyer will face exponentially increased difficulties when the chain of
distribution goes through foreign countries and sellers who may not speak English
at all let alone keep the type of records necessary to ensure that product is genuine.
Current U.S. laws and regulations are not working to eliminate counterfeiting in
the U.S. The same laws and regulations will be even less successful in eliminating
foreign counterfeiting practices.

The FDA has authority to investigate suspected or reported incidents
of counterfeiting within the United States. For example, last year the FDA worked
with state officials in Florida to locate and arrest three people for trafficking and
unlawfully distributing counterfeit prescription drugs. But the FDA does not
have the same authority to make investigations outside of the United States.
The number of lawsuits filed against the manufacturers of products
counterfeited by others has risen sharply in recent years. Legal protection from
liability is necessary for product manufacturers who cannot rely on the power of the
U.S. government to identify and punish foreign counterfeiters.

ROLE OF NEW TECHNOLOGIES

XI. Analyze whether anti-counterfeiting technologies could improve the safety of
products in the domestic market as well as those products that may be
imported.

BIO’s response:
Several Task Force questions address the potential to use new
technologies to combat counterfeiting and mitigate security risks associated with
drug importation. FDA’s Counterfeit Drug Task Force Final Report discussed the
potential benefits of such technologies.

BIO has serious concerns that the application of certain proposed
technological solutions for authenticating products, or tracking and tracing them
through the distribution cycle, could result in adulteration or degradation of
therapeutic proteins and parenteral drugs. For instance, many biological products
are highly sensitive to impurities in any quantity. The introduction of very small
quantities of a seemingly benign substance as a marker could cause protein
aggregation or an immunogenic response. Because of these types of product
sensitivities, it would be unwise for the Task Force to recommend the use of covert
markers and taggants for use with biological products. Moreover, many “active”
technologies (e.g., radio frequency identification or electromagnetic identification
systems) require multiple screenings to track the progress of a product through its
distribution cycle. It is unknown to what extent repeated exposure to
electromagnetic radiation could cause degradation of biological products. Therefore,
technologies that require electromagnetic radiation emission must be adequately
validated before use with biological products.

BIO agrees with the FDA Counterfeit Drug Task Force Report that a
multi-layered approach to drug product security, that incorporates a combination of
technological, business, and marketing solutions, could be helpful in combating
counterfeiting or product tampering. Regardless, the simplest and most direct tool
against these harms is regulatory control over the drug distribution system. Drug
importation destroys this control – one that has effectively protected patients for
decades.

Conclusion

BIO appreciates the efforts the Task Force members have made to
solicit input from all interested stakeholders and we appreciate the opportunity to
participate in this process. Opening U.S. borders to importation and reimportation
of pharmaceuticals and biologicals would supplant FDA’s high standard for quality,
safety, and effectiveness. This policy would stifle innovation and damage U.S.
intellectual property and contract rights for minimal savings to the health care
system and to individual consumers. For these reasons, we request that the Task
Force urge the Secretary to refuse to certify or support any drug importation
program.

We look forward to continuing to work closely with the Secretary and
FDA on these important issues.

Sincerely,
/s/
Carl Feldbaum
President, Biotechnology Industry
Organization