The U.S. Food and Drug Administration (FDA) has broad authority to evaluate and approve drugs for medical use or prescription drugs. It also has the authority to investigate fake or counterfeit medicines and substances in the entire pharmaceutical industry. Unfortunately, the Food and Drug Administration (FDA) relies heavily on healthcare providers and professionals – especially doctors and pharmacists – to spot counterfeits or unapproved drugs. Rather than merely deputizing these healthcare professionals, though, the FDA puts the onus on them to take counterfeit drugs out of the supply chain. This has serious implications: If you prescribe or dispense counterfeit drugs, you can be held legally liable, even though you were not the one who made the fake drugs substance, and even if there was little that you could have done, differently.

This can come as a shock to healthcare providers in the U.S. Here are four things that Dr. Nick Oberheiden, an FDA defense lawyer from Oberheiden P.C., thinks that healthcare providers should know about the FDA’s counterfeit drug investigations.

The Four Forms of Counterfeit Drugs

According to the FDA, drugs can be counterfeit in four different ways. They can be:

1. Fake, ineffective, contaminated, or unsafe in some other way
2. Unapproved or even unevaluated by the FDA
3. Composed of too much or too little of the active ingredients that they were designed to have
4. Filled with harmful ingredients

Many instances of counterfeit drugs fall into more than one of these categories.

For example, drug counterfeiters frequently dilute medications to spread the active ingredients out. This lets the counterfeiter make more money by selling the same amount of medication in a higher volume. For patients, though, this leads to an ineffective treatment because there is not enough of the active ingredient in each dosage. In other cases, counterfeiters will re-label expired prescription drugs with current labels to continue to sell them or will put name-brand labels on generic versions of the drug to inflate the price.

Healthcare Providers Can Face Consequences for Dispensing Counterfeit Drugs

Doctors, pharmacists, and other healthcare professionals who prescribe or dispense drugs and medication may think that these clear examples of wrongdoing have nothing to do with their medical practice. Surely the criminal conduct that some nefarious actor does earlier on in the supply chain will not put a law-abiding medical professional into legal jeopardy, right?

Not according to the Drug Supply Chain Security Act (DSCSA) and other federal healthcare laws.

These laws put affirmative legal obligations on healthcare providers to take care not to let counterfeited drugs continue to drift through the supply chain and reach their end users – unwary and vulnerable patients who cannot recognize a potentially harmful counterfeited drug. Those obligations are not insignificant for healthcare providers. They force these providers to shoulder the heavyweights of preventing, detecting, and responding to the bad actors who put the counterfeit drugs into the supply chain in the first place.

Healthcare Providers Must Have Compliance Measures in Place to Find Counterfeit Substances

To prevent, detect, and respond to drug counterfeiters, pharmacies and healthcare providers must have DSCSA compliance measures in place to ensure that they are doing their due diligence in procuring and dispensing drugs. While each company’s precise needs will be different, the general compliance requirements include:

• Routinely confirming the licenses and registration status of parties involved in drug purchases and sales
• Reviewing tracing information for drugs being bought and generating that same information for drugs being sold
• Retaining records of tracing information and all communications from trading partners
• Creating standard procedures for quarantining and inspecting suspected counterfeit prescription drugs and substances, including a thorough documentation protocol
• Sending required notifications to relevant parties when there is a suspected counterfeit medication substance
• Creating standard procedures for removing drugs that have been confirmed to be counterfeit from the supply chain
• A standard plan for responding to inquiries by the Drug Enforcement Agency (DEA)

In addition to these compliance requirements, some commonsense guidelines can also help healthcare providers detect counterfeit drugs, protect their patients, and avoid legal liability:

• Always know the source of all medications that you order, dispense, or purchase
• Do not import non-FDA approved drugs from another country
• Always inspect the packaging of medications that you order and be on the lookout for warning signs like:
  • Strange dosage recommendations
  • Non-English labeling or instructions
  • Packaging that is unfamiliar for a medication that you routinely handle
• Check the FDA’s Orange Book if you have any doubts that the medication has been approved by the agency
• Be skeptical of any special offers on drugs or if a medication is priced suspiciously low

As Dr. Nick Oberheiden, an FDA counterfeiting defense lawyer at the national law firm Oberheiden P.C., says, “With a strict compliance program and some common sense, healthcare providers can drastically reduce the odds that they are targeted by an FDA counterfeit investigation.”

The Penalties for Failing to Uphold Your Legal Duties are Steep

Failing to uphold your legal duties as a healthcare provider to stop the flow of counterfeit drugs or counterfeit pharmaceuticals is significant. Violations of the DSCSA can be sanctioned with civil penalties, disgorgement and restitution, criminal fines, and potentially even jail time.

While criminal cases under the DSCSA are rare and are often only for healthcare professionals who knowingly dispensed counterfeit versions of drugs, the civil sanctions can be more than enough to cripple your pharmacy or healthcare practice.

However, the DSCSA is not the only law that can be violated in these situations. Other federal laws prohibiting healthcare fraud can become implicated when you let counterfeit drugs continue to pass through the supply chain. One of them that can lead to serious repercussions is the False Claims Act. This law covers making improper claims for reimbursement from a government program. If you billed Medicare or Medicaid for counterfeit drugs or counterfeit medications, it can trigger the False Claims Act. This law’s civil penalties – which can be imposed for unknowing and unintentional conduct – include treble damages and a civil penalty for each violation, drastically increasing the severity of a drug counterfeiting investigation.