CVS Pulls Out of Secondary Drug Market

CVS has decided to no longer purchasemedicines from wholesalers thattrade in the secondary market. Officialsof the nation's 3 biggest pharmaceuticalwholesalers, Cardinal Health,AmerisourceBergen, and McKesson,however, do not believe that the recentdecision will impact their business.

"The CVS decision is consistentwith Cardinal Health's practices topurchase all branded pharmaceuticalsdirect from the manufacturers," saidCardinal spokesman Jim Mazzola.

"We previously bought the vastmajority in that manner, but as of July1, 2005, we will purchase all brandedpharmaceuticals directly from the manufacturer.Cardinal will purchase genericsonly either direct from the manufactureror through a pretty select group ofauthorized distributors," he said.

AmerisourceBergen also does notanticipate any problems as a result ofthe retail pharmacy chain's announcement."It does not impact us. We arevery comfortable with their [CVS]decision," said company spokesmanMichael Kilpatric. "We purchase onlyone half of 1% of our purchases fromauthorized distributors. The remainingare bought directly from the manufacturer.In fact, AmerisourceBergen has alist of 10,000 items that may be a problem,such as Lipitor [for drug counterfeiting],that are only bought directlyfrom the manufacturer," he added.

McKesson did not wish to commenton the CVS decision.

CVS is adding more levels of scrutinyto ensure the continued reliability of thepharmaceutical supply chain. Concernshave been mounting that wholesalerstrading in the secondary market potentiallyprovide an entry point for counterfeitor adulterated products to enter thelegitimate pharmaceutical marketplace.

In a statement, Rep Steve Israel (D,NY) praised the decision. It shows " thateven the drug industry believes it istime to clean up the prescription saleschain. The fact that, while most Americanstrust the doctors who write theirprescriptions and the pharmacists whofill the prescriptions, in between themanufacturer and pharmacy prescriptiondrugs can change hands up to adozen times, in a shady gray market,where they can be tainted, diluted,relabeled, and counterfeited."

On May 9, 2005, Rep Israel introducedTim Fagan's Law, or HR 2345.The legislation seeks to increase criminalpenalties for the sale or trade ofcounterfeit prescription drugs; tomodify requirements for maintainingrecords of the chain of custody of prescriptiondrugs; and to establish recallauthority for the FDA.

The law is named after teenager TimFagan who was given counterfeit epoetinalfa (Epogen) to combat anemia.Fagan's mother was giving him theinjections after he underwent a livertransplant in 2002. After each injection,he would scream in agony andexperience full body cramps. The familydid not understand the cause untilthey received a call from the pharmacythat filled the prescription, alertingthem that it had distributed at leastone counterfeit batch of the drug.