Gov't Issues Report on CBP, FDA Efforts Against Counterfeit Pharmaceuticals

The following are highlights of CBP's and FDA's domestic enforcement efforts to combat counterfeit pharmaceuticals:

CBP & FDA Developing Strategic Approach & Import Operation Plan in 2011

In 2011, CBP and FDA will jointly develop a strategic approach to addressing illegal pharmaceuticals in ports of entry to ensure a consistent enforcement response at U.S. borders. By the end of fiscal year 2011, FDA will work with CBP to develop an Import Operation Strategic Plan for imported FDA-regulated products. As part of this process, the agencies will examine the flow of imported pharmaceutical products through ports of entry, identify all available legal authorities, and develop best practices to enhance enforcement efforts.

Will Enforce Penalties Against Illegal Pharma Importers & Repeat Violators

FDA and CBP will also identify any additional legal authorities necessary to ensure that only compliant pharmaceuticals are being imported into the U.S. and that appropriate enforcement action is taken against illegal pharmaceuticals, such as ensuring such products are destroyed rather than returned to sender. The agencies will also create a uniform, progressive enforcement posture in which CBP will assess civil penalties against repeat violators and importers of commercial quantities.

Working on CM Pilot for Mail, to Extend to Express Carriers, Air Cargo

CBP and FDA are currently working to develop a pilot compliance measurement (CM) program in which they will randomly inspect packages entering the U.S. through mail facilities and collect data on the results. This data will provide the agencies with a better understanding of the importation trends and methods for pharmaceuticals, and the rate at which imported pharmaceuticals comply with the laws enforced by CBP and FDA.

Later in 2011, CM processes will be duplicated for express carriers and in FY 2012, for commercial air cargo. (See ITT's Online Archives or 04/26/11 news, 11042622, for BP summary of CBP's various actions and initiatives to combat counterfeit pharmaceuticals.)

FDA and CBP to Coordinate on Supply Chain Pilot and IPR Program

FDA is developing a Secure Supply Chain (SSC) pilot program, to help expedite shipments of drugs that meet the SCC pilot criteria, giving FDA greater confidence that the drugs are imported by a company in control of its supply chain. Similarly, CBP is developing an IPR supply chain management program in coordination with FDA's program, that builds on CBP's existing supply chain partnership programs, the Customs-Trade Partnership Against Terrorism (C-TPAT) and the Importer Self Assessment Program.

CEE to Share Info with CBP & FDA Targeting Centers and Ports

CBP launched its Pharmaceutical Center of Excellence and Expertise (CEE) pilot in November 2010. Over the next several months, the CEE will compile data and information from industry and within CBP to be distributed to FDA and CBP targeting centers and ports of entry to enhance the targeting of counterfeit, substandard, and unapproved pharmaceuticals.

Will Increase Uniform Port Application of Laws, Processes, & Best Practices

The CEE will also increase uniformity across CBP by identifying the laws, processes, and best practices applicable to pharmaceutical imports and will provide guidance to the ports to ensure uniform application. See ITT's Online Archives or 04/27/11 news, 11042725, for BP summary of CBP's lessons learned from the CEE pilot.)

Recommended Legislative Actions for Congress

The following are highlights of the report's recommended legislative actions to Congress on how it can address the issue of counterfeit pharmaceuticals in the U.S.:

Importer/Manufacturer notifications: require importers and manufacturers to notify the FDA and other relevant agencies when they discover counterfeit drugs or medical products, including the known potential health risks associated with them.

Give forfeiture authority under FD&C Act: give civil and criminal forfeiture authority under the FD&C Act to make it consistent with other criminal statutes, particularly the counterfeit trademark offenses under 18 USC 2320.

Adopt track-and-trace system: adopt a track-and-trace system for pharmaceuticals and related products to make it more difficult to introduce counterfeit drugs into the U.S. market and to make it easier to identify those responsible for making a product unsafe, and facilitate the recall of unsafe products more quickly.

Increase offense level: direct the U.S. Sentencing Commission to consider providing: (1) a four-level enhancement for offenses involving the conscious or reckless risk of death or serious bodily injury; and (2) a two-level enhancement, and a minimum offense level of 12, for offenses involving counterfeit pharmaceuticals where there is no such risk or injury.

Increase FD&C Act's statutory maximum sentence: increase the statutory maximum sentence under the FD&C Act, particularly for counterfeit drugs. Most criminal violations of the FD&C Act are subject to a statutory maximum sentence of no more than three years in prison. This contrasts with the 10-year statutory maximum for the sale of products with counterfeit trademarks (including for drugs) under 18 USC 2320.

¹This Working Group report was prepared by the Office of Intellectual Property Enforcement Coordinator, FDA, CBP, ICE, the Departments of Justice, State, and Commerce, and the Agency for International Development. The report focused on CBP and FDA activities and its recommendations are being presented to the Vice President and to Congress.

(See ITT's Online Archives or 04/14/11 news, 11041417, for BP summary Representative Dingell introducing a Drug Safety Bill that would equip FDA with the authorities it needs to regulate pharmaceuticals.)