JUNE 9 - JUNE 15, 2005 • VOLUME 3 - ISSUE 23 • LONG ISLAND'S NEWS AND ENTERTAINMENT WEEKLY • WWW.LONGISLANDPRESS.COM

LUKEWARM ON COLDPLAYBRITAIN'S BIGGEST DOESN'TDELIVER ON X&YP. 40

Davi

d Ja

mes

Wayne Herrschaft

Two bottles of medicinebought by a Long Island

family at a local CVS. Oneis counterfeit. Can you

spot the differences? Canyou pick the fake?

THE DOG DAYS...KEEPING YOUR PETS SAFEFROM THE HEAT P. 73

24 COVER

Pharmaceutical FakeryCOUNTERFEIT DRUGS THREATEN PATIENTS’ HEALTH

By Elizabeth Cady Brown

T im Fagan had already beenthrough a lot when the doctorsprescribed Epogen for his anemia.

Two years before, when he was just 14, Timhad developed a rare liver condition. Hislegs turned blue; he became lethargic; hevomited blood. Finally, in February 2002,Tim got a donor liver and had an emergencytransplant that saved his life. His parents,Kevin and Jeanne Fagan, hoped that Timwould rebound and that the potent cocktailof pills and injected medications that hetook each day would help.

Little did the Fagans know that theEpogen they bought at the CVS pharmacyin Deer Park—that Jeanne injected intoher son once a week with tragic devotion—was counterfeit.

“It took us several weeks to put two andtwo together,” remembers Kevin. “Severalhours after giving him the Epogen, hewould suffer full body cramps and screamlike I’ve never heard him scream before. Itaffected his whole being.”

Tim’s reaction only started to makesense after a CVS worker called in May to

warn the Fagans that the pharmacy haddistributed at least one bogus batch ofEpogen, which sells for roughly $500 perdose. For Kevin Fagan, however, compre-hension quickly turned to confusion.How had CVS gotten counterfeit drugs?What was in those vials, if not high-doseEpogen? Why wasn’t the governmentkeeping the nation’s drug supply safe?

“We are as ordinary as they come,” saysKevin, a manager at Con Edison. He andhis wife, an assistant principal in Queens,have lived with their three children in Deer

Park for 20 years. “I realized, if this couldhappen to us, it could happen to anyone.”

MYSTERY MEDSThe dark world of counterfeiting

pharmaceuticals is not well understood.While the Food and Drug Administration(FDA) estimates that less than 1 percent ofprescriptions filled in this country arecounterfeit, officials admit that this figureis not based on any scientific studies.

“We believe the problem is very smallcompared to the problem in some developing

Kevin and Jeanne Fagan, showing the vials of fake Epogen that they bought at their local CVS in Deer Park. They are suing the drug distributors for millions and working to improve regulation of the drug industry.

Tim Fagan, the teenager who survived taking counterfeit meds after aliver transplant.

LIKELY PATHWAY FOR TIM FAGAN’S EPOGEN

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countries,” says Tom McGinnis, the directorof pharmaceutical affairs for the FDA. Butbelief is not the same as knowledge.

And even if the FDA’s back-of-the-envelope estimate is accurate, the number ofcounterfeit drugs dispensed is still potentiallyenormous. One percent of 3.7 billion, thenumber of prescriptions filled every year inU.S. pharmacies, is 37 million. Just onephony dose could be deadly or severely debil-itating for a patient.

The FDA’s own Office of CriminalInvestigations initiated nearly twice thenumber of counterfeit drug cases in 2004than 2003: 58 compared with 30. The number of such investigations averaged onlyfive a year during the 1990s. But the FDA’sMcGinnis attributes this not to a rise incounterfeiting, but to increasing vigilance bydistributors.

“When they see something that lookssuspect, they report it,” says McGinnis confidently.

But Katherine Eban, an investigative

medical reporter and Rhodes Scholar whojust spent two and a half years researchingand writing a book about fake pharmaceuti-cals called Dangerous Doses, finds the FDA’sresponse to this public health hazard totallyinadequate.

“The problem is enormous,” says Eban.“Drug distribution is a minimally regulatedsystem that has been infiltrated by dangerouscriminal elements that is having a profoundeffect on patients.”

According to independent pharmaceuti-cal industry monitors such as Eban and thenonprofit consumer-advocacy group PublicCitizen, most drugs make it safely from themanufacturer to one of the “big three”national wholesalers, AmerisourceBergenCorporation, Cardinal Health Inc., orMcKesson Corporation. Combined, thesecompanies distribute roughly 90 percent ofall drugs manufactured nationwide.

But after this first sale, the supply chaincan grow murky and circuitous. Instead ofmoving directly from manufacturer to dis-tributor to pharmacy, some medications getdiverted into a secondary marketplace ofsmaller distributors, where they are easilycounterfeited, diluted or otherwise contami-nated. Unscrupulous and unlicensed merchants target drugs made for the sickestpatients, because those drugs are often themost expensive.

Counterfeiters may change the labels toindicate a stronger dose, dilute the activeingredients, or replace them with substanceslike tap water, insulin or fertility hor-mones—in the process potentially turningthousands of dollars of real meds into millions of dollars of junk.

“It can be done through a whole range ofschemes,” Eban explains. “Printing technol-ogy is now so ubiquitous, you can redo thelabels easily. You can buy a used pill-makingmachine on eBay.”

Tim Fagan’s Epogen was first sent into

the marketplace by its manufacturer, Amgen,which sold it to the mega-distributorAmerisourceBergen. But before it entered hisblood stream, Fagan’s drugs changed handsat least 11 more times. According to Eban,the drug was handled by three differentwholesalers, two pharmacies, four unlicensedgo-betweens, and one suspected counterfeiter.His medicine spent time in a Florida stripclub, Playpen South, and sat in paint cans ata trailer park.

“What was in Tim’s drugs will forever bea mystery,” says Eric Turkewitz, the Faganfamily’s Manhattan lawyer. “It’s one of theissues with counterfeit drugs—the evidenceis destroyed the second it is ingested orinjected.”

STOPPING THE MADNESS The family has a massive civil suit pend-

ing against the distributors and pharmacies

who sold Tim’s Epogen. They are asking forcompensatory and punitive damages equal to$1 for every share of outstanding stock foreach corporate defendant, which could addup to more than $108 million. All the partiesto the lawsuit are currently in depositions.

Turkewitz says this is the first time such astock-linked award has been proposed. Heput it in the complaint, he says, in order todraw attention to the issue and “wake up”stockholders to their culpability.

“The shareholders are the ones who hirethe management,” Turkewitz explains, “andthis is one way for the shareholder to under-stand that they will get caught holding thebag if management recklessly endangers thehealth and welfare of the public.”

While the strategy may score points forpublicity, some personal injury attorneysthink it’s a loser legally. Eileen Buholtz, apracticing attorney and past chair of the NewYork State Bar Association’s torts section,explains that because awards for punitivedamages are based on the wealth of the

company—which the number of shares isnot—calculating the damages this way maybe grounds for reversal by the appellate court.

Turkewitz acknowledges that when itcomes time for trial he may revise his awardrequest, saying, “I put it in [the complaint]for its symbolic effect, but it is up to the juryto determine damages they believe are fairand reasonable.”

No matter what the award, Turkewitzand the Fagans understand that massive personal injury lawsuits by victims of coun-terfeit drugs are only one way to agitate forchange. In fact, as soon as Tim’s health stabilized after the Epogen episode, Kevinstarted his own lobbying campaign to convince government officials about theneed for legislative reform.

At one point, Kevin remembers Tim say-ing, “Better this happens to me than aninfant.”

“It breaks your heart to think about,”says Kevin. “So what became paramount inall our minds was exposing this problem sothat no one else has to go through it.”

After months of pounding on countlessclosed doors, Tim’s story finally caught theattention of Congressman Steve Israel (D-Huntington), whose district includesDeer Park. Soon after their meeting in2003, Israel proposed a new federal law tocombat pharmaceutical counterfeiting. Hemade the announcement standing on theFagans’ front porch. Although Tim Fagan’sLaw never got out of committee that session, Israel reintroduced the bill on May9 and has higher hopes of getting aRepublican cosponsor.

“At least now we have the book,Dangerous Doses,” says Israel, “which docu-ments for the first time all these streams ofsale. When my colleagues understand thatthe meds they take might pass through astrip club in Florida, they are going to wantto pass my bill.”

Israel’s proposal would impose stiffercriminal penalties on counterfeiters, requiremanufacturers to tell the FDA about knownpharm fraud, authorize $60 million per yearfor spot-checking on-the-shelf drugs, and givethe FDA the ability to issue drug recalls. Rightnow, the FDA can recall equipment but only“encourage” companies to recall their medi-cines. And, at the crux of the Israel legislationis the launch of a “paper pedigree” system sothat drugs can only be sold with a certificateidentifying all prior purchasers.

“FedEx is a perfect analogy,” says Israel.“They know every place a package has beenand the same should apply to the medicinesin our blood streams.”

Proponents argue that imposing a simple paper-tracking system is one of themost obvious and effective ways to preventcounterfeiting. And Congress agrees—ordid—having passed the Prescription DrugMarketing Act in 1988, which authorizedprecisely the sort of paper trail in Israel’s bill.But lobbying by drug-distributor tradegroups such as the Healthcare DistributionManagement Association (HDMA) andother powerful pharmaceutical interests haskept change at bay for the last 17 years.

Instead, drug distributors have focused

COVER 25

“THIS IS A PRETTY LARGE LAWSUIT,” SAYS TIM FAGAN, “BUT I’M NOT

INTIMIDATED BY THESE COMPANIES. THEY SHOULD ALMOST BE INTIMIDATED

BY ME—EVERY TIME I OPEN MY MOUTH, THEY ARE LOSING MONEY.”

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Based on Dangerous Doses:How Counterfeiters areContaminating America’s DrugSupply. Inclusion in this chartdoes not suggest that a companyor individual participated in anywrongdoing.

26 COVER

on fighting counterfeiters by promotingchanges to licensing rules. They argue thatthe most immediate thing the governmentcan do is raise the bar on the credentialsrequired to get a distribution license.

Technically, the FDA has the paper pedi-gree on hold, and observers say it would takean act of Congress to finally get the systemup and running. The FDA says it has delayedimplementing the paper pedigree because

industry members have expressed so manyconcerns about the certificate possibly beingcounterfeited and how much the system willcost. The HDMA and the FDA jointly arguethat new high-tech scanning technologies arejust around the corner that will be able totrack drugs even more effectively and cheaply.

“We don’t believe the cost of a paperpedigree system nationwide is worth it withthis technology so close,” says McGinnis, theFDA’s pharmaceuticals director. He couldnot say when this high-tech tracking wouldbe ready, however, nor put a price tag onusing paper in the meantime.

“We don’t know,” he admits. “We’venever costed it out.”

Israel and other critics say the agency isoverly sympathetic to industry concernsbecause the FDA has been “infiltrated” bypeople who used to work for the companiesthey now regulate.

“I think they know there is no techno-logical solution imminent, so they are usingthat to stall the paper,” Israel says. “The realissue here is that [the wholesalers and distrib-utors] don’t want to bear the expense of thesepaper pedigrees. My response to them is theFagan family.”

It remains to be seen whether thatresponse will be enough to counter the $200

billion U.S. prescription drug industry. Thecombination of the Fagan lawsuit, Israel’slegislation and New York Attorney GeneralEliot Spitzer’s recent decision to investigatethe secondary drug market is having someimpact already. On May 7, Cardinal HealthInc., the nation’s second-largest drug distrib-utor, announced that it would no longertrade with drug middlemen.

And on May 24, CVS, America’s largestpharmacy chain, said it would no longerpurchase drugs from wholesalers that dotrade in the secondary drug market. CVSmade its announcement on the same daycompany attorneys were taking Tim Fagan’sdeposition and, according to Turkewitz, theCVS decision puts an enormous amount of

pressure on the rest of the pharmaceuticalindustry.

“How can the other two large distributorscontinue to do business in the gray marketwhen the largest pharmacy chain in thecountry won’t do business with them any-more?” he asks.

Kevin Fagan says he’ll continue to fighton both legislative and legal fronts until thedrug supply chain is secure. And Tim hassworn to carry on another, more private bat-tle: to conquer the fear and take his pillsevery day, knowing they could save his life—or end it.

“If I don’t take the pills, I die,” says Tim.“If they are counterfeit, I die. It’s a scarything that will always play on my mind.”

The counterfeit Epogen labels were almost identical to the labels for the real thing,except they did not have the degree symbol written next to the storage temperature.For more information, visit

these websites

www.fda.gov/counterfeitThe Food and Drug Administration’spage about counterfeit drugs.

www.house.gov/israel/issues/counterfeitdrugs.htm Congressman Steve Israel’s pageabout Tim Fagan’s Law.

www.fraud.org/fakedrugsNational Consumers League tips foravoiding fake pharms.

www.dangerousdoses.comKatherine Eban’s web site.

www.ericturkewitz.com/cases/counterfeit_drugs.htmTim Fagan’s attorney’s web page aboutcounterfeit drugs.