April 28, 2013 12:55 pm

Teva discovers sophisticated fakes of popular drug

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Teva©Bloomberg

Leading generic drugmakers are stepping up quality inspections in Europe after unearthing a sophisticated counterfeiting operation of a popular off-patent heartburn medicine.

Robert Koremans, head of speciality medicines at Teva, the Israeli-based generics manufacturer, said his company had begun purchasing its own products from pharmacies to test after discovering fake versions of its omeprazole this year.

“This is making us rethink our approach,” he said. “Patient safety comes first. We were surprised to discover the counterfeiting.”

Ratiopharm, a subsidiary of Teva, was alerted by a patient in Germany who became suspicious of spelling mistakes in the instructions on a packet of its omeprazole, a gastric reflux treatment. The drug contained genuine pharmaceutical ingredients but was not produced by the manufacturer, as claimed on the box.

The alert triggered further discoveries of fake versions of 20mg and 40mg packs of omeprazole by other producers including Hexal, a subsidiary of Sandoz, and led to raids by German police culminating in the arrest and charging of two people in their 50s last month.

The fakes have surprised the European generic drugs industry, and may force a rethink of its opposition to EU anti-counterfeiting measures. They have previously argued that tight regulation and the low prices of most of their products made them unlikely to be copied.

According to company officials, investigators found that through a sophisticated network of manufacture and packaging in at least four European countries, the fake omeprazole was supplied through wholesale drug distributors to pharmacies in Germany.

While the omeprazole was well-produced and does not appear to have put patients’ health at risk, the counterfeiting operation has exposed weaknesses in Germany’s system of drug reimbursement, with manufacturers providing a rebate to health insurers based on how many of their products have been sold to patients.

While the generic drug is sold net at only about 1 cent per pill, the gross price at which it is bought – on which manufacturers then reimburse most of the cost – is much higher, allowing fraudsters to generate substantial profits.

European generic manufacturers have long criticised EU efforts to impose tougher and more expensive controls on medicines, including a unique identification number on each packet.

Mr Koremans said he would argue for tighter restrictions on “parallel trade”, or the arbitrage between wholesalers of medicines sold at different prices in varied European countries, with a requirement for sales only to come from the manufacturers.

But such calls by pharmaceutical companies producing higher-value patented medicines have been rejected consistently by European policy makers and courts.

Mr Koremans also said he was reconsidering his opposition to EU calls for a unique number on each drug package, to allow it to be traced and authenticated, although he did not want to see a single monopolistic database put in place.

Sandoz confirmed its products had also been affected and said: “As a responsible manufacturer of generics, we take the risk of counterfeiting very seriously. As part of our implementation of track and trace systems in manufacturing, we are evaluating how we can identify counterfeits more rapidly.”

Warwick Smith, head of the British generic manufacturers’ association, said the industry still felt that any efforts to track individual medicines should be targeted on products at high risk of fraud and not applied to all prescription medicines.

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