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TV program reveals harsh reality of drug counterfeiting

BY Rob Eder

WHAT IT MEANS AND WHY IT’S IMPORTANT — Sugar and chalk. That’s what Pfizer researchers found in a pill that was supposed to be Cytotec but was, in fact, a crude knock-off seized from a counterfeit drug lab in Peru.

(THE NEWS: ’60 Minutes’ examines drug counterfeit problem. For the full story, click here)

The "60 Minutes" segment came as no surprise to Drug Store News, which has argued for many years that drug counterfeiting is the key reason lawmakers need to forget the recurring pipe dream they share that rogue Internet sites and drug reimportation is a legitimate solution to rising healthcare costs. As it is, thousands of suspicious packages containing possible counterfeit drugs are seized by Customs agents in U.S. postal facilities every day. According to estimates, 36 million Americans bought drugs from unlicensed Internet pharmacy sites last year.

What was surprising, however, was the number of negative comments the TV news program received on its website from cynical consumers who believed producers and the network — even Sanjay Gupta, CNN’s resident medical expert who hosted Sunday evening’s segment for CBS — had sold out.

“I have been a devoted viewer of ’60 Minutes.’ … Tonight’s show, however, hit a nadir in the appalling Pfizer infomercial masquerading as news,” one viewer noted on the "60 Minutes" website.

“’60 Minutes’ owes its long-time viewers a sincere and public apology as part of an admission that this ‘report’ was an embarrassing abuse of its storied pulpit — a shameless insult to journalism itself,” posted another user.

“I used to have respect for Sanjay Gupta. Just proves that everyone has a price tag,” noted another.

This speaks to a much larger problem in America: the flawed sense of entitlement that threatens to undermine this country on a number of levels. We want to buy homes we can’t afford. We want national security and top-notch education, but we don’t necessarily want to pay taxes to pay for it. We want $4 generics and cheap branded drugs from the Internet, and we expect the Food and Drug Administration and Pharma to be able to guarantee the safety of those products.

The reality is that you can’t pay for the kind of operation Pfizer has to fund to ensure the safety of its products and to help guard the integrity of the U.S. drug supply chain on margins from $4 products.

The reality is that the FDA doesn’t have the resources to do it. Commissioner Hamburg told "60 Minutes" that the United States still has been unable to identify the source of the contaminated ingredient that likely killed dozens of Heparin users in 2008.

The reality is that today, in 2011, the counterfeit drug business is a $75-billion-a-year-and-growing underground industry with no signs of slowing down. Drug traffickers realize there is a lot more return on investment in imitation prescription pills than, say, cocaine or heroin — particularly when you factor in the low risk.

The reality is that some criminal in a one-room shanty in Peru, or any other disgusting hovel anywhere else in the world, can knock off a pill for about 40 cents and sell it for $20. And it’s up to such drug makers as Pfizer to spend the money to catch them before you die from taking a pill made of sugar and chalk.

That’s what happens when you bend the rules of health care rather than rewrite the rules. That’s what happens when you don’t realign incentives to make Americans smarter healthcare consumers and make providers more focused on outcomes than services. You get pills made out of chalk and sugar. That’s the reality.

DSN knows a couple of things about good journalism, and "60 Minutes" deserves credit for making millions of Americans face the cold, hard truth about drug counterfeiting.

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Family Dollar a hot commodity

BY Gail Hoffer

MATTHEWS, N.C. — Family Dollar reported Monday a comparable-store sales increase of 5.1% for the second quarter ended Feb. 26. Net sales for the quarter increased 8.3% to $2.26 billion, from $2.09 billion last year. According to the retailer, warmer weather earlier in the year, as well as strong performance in its consumables and seasonal categories, helped drive sales.

“Family Dollar continues to execute well against our strategic plan to accelerate revenue growth, expand operating margins and optimize our capital structure,” said Howard Levine, chairman and CEO. “Our investments to improve the shopping experience for our customers while enhancing our operational capabilities continue to deliver strong returns.”

The company said it now expects that earnings per diluted share for the second quarter of fiscal 2011 will be in the range of 97 cents to 98 cents per diluted share, compared with 81 cents per diluted share for the second quarter of fiscal 2010.

Family Dollar’s second-quarter performance will make it even more enticing to investors, who have shown a growing interest in discount stores. Last month, Family Dollar Stores received a buyout offer from a New York hedge fund at $55 to $60 per share, a 36% premium over yesterday’s closing price. The offer, which values the company at up to $7.6 billion, was made by Trian Group, which is headed by activist investor Nelson Peltz.

Investors also have shown interest in other dollar stores. 99 Cents Only Stores, according to the Associated Press, has received a proposal to take the company private from the company’s founding family and investment firm Leonard Green & Partners for $19.09 per share.

The offer would value the company at about $1.3 billion. According to 99 Cents, the purchasers would include the Schiffer-Gold family, which owns about 33% of its outstanding stock. David Gold is company founder and chairman, and his son-in-law, Eric Schiffer, is CEO.

Whether any of the aforementioned deals go through remains to be seen, but it is clear that it is a good time to invest in dollar stores while they still have a strong appeal to consumers looking to continute to save in difficult economic times.

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GiantMicrobes expands line of toys

BY Allison Cerra

NEW YORK — GiantMicrobes has developed a new line of educational plush toys that are modeled after tiny organisms.

New to the lineup are toys that resemble magnified microbes of hay fever, a tick and a brain cell.

Original-sized GiantMicrobes (5-in. to 7-in. sizes) retail for $8.95, while GiantMicrobes petri dishes (three mini-microbes packaged in a dish) retail for $12.95, and Gigantics (15-in. to 20-in. sizes) retail for $29.95. The brain cell plush toy is available as a key chain, GiantMicrobes said, and retails for $5.95.

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