NABP white paper stresses drug supply chain security

NEW YORK — Keeping counterfeit and diverted drugs out of the U.S. drug supply chain will require closing vulnerable regulatory gaps that risk letting them in, according to a new report by the National Association of Boards of Pharmacy.

In the white paper, "Wholesale Drug Distribution: Protecting the Integrity of the Nation's Prescription Drug Supply," the NABP pointed to the role of unscrupulous wholesalers that it says distribute counterfeit drugs and unapproved drugs from foreign countries. To help safeguard the distribution chain, the group has implemented updated criteria for its Verified-Accredited Wholesale Distributors accreditation program, including letting virtual wholesale distributors qualify for it. The group also said it supported state-level efforts to strengthen and work toward uniformity in prescription drug distribution laws to eliminate the regulatory gaps that leave the supply chain vulnerable.

As an example of regulatory loopholes used by rogue distributors, some will hide suspect transactions by exploiting the complexity of the virtual distribution model where drugs may change hands several times, but not be in the physical possession of the distributor. In other cases, a pharmacy may supply shortage drugs to a wholesaler under the guise of an intra-company transfer, after which the distributor hoards and later sells them to pharmacies or other healthcare entities at significantly higher prices.

The NABP cited cases last year of large-scale drug diversion involving corrupt wholesalers and Medicaid fraud, as well as the U.S. distribution of foreign-sourced, unapproved cancer drugs by two licensed wholesalers.