Drug distributor is tied to imports of fake Avastin

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Authorities investigating the importation of low-cost foreign pharmaceuticals into the U.S. have identified a supply chain that may have allowed fake cancer drugs to reach U.S. clinics, according to investigators and documents reviewed by The Wall Street Journal.

Federal officials are examining the business dealings of two Canadian businessmen who have long histories in the Internet pharmacy trade that delivers discounted prescription drugs from overseas to U.S. citizens, the documents and interviews reveal.

One of the men acknowledges that his companies shipped fake vials of Roche Holding AG's cancer drug Avastin late last year, emphasizing that he had no knowledge the drugs were counterfeit.

"We're deeply horrified by this counterfeit [product] being sold by one of my companies," said Thomas Haughton, a Canadian citizen who runs a network of drug distributors that sell to U.S. doctors. At the same time he said that his business operated legally. "We're doing everything we can to be sure that this never happens again."

While experts say most U.S. drugs are safe, the probe may raise new concerns about the weakly regulated gray market in foreign drugs aimed at U.S. patients. The importation of foreign drugs by third parties, which takes advantage of the large price differential between the U.S. market and others abroad, is believed to represent a small but growing portion of the $300 billion U.S. prescription pharmaceutical business.

Discovery of the fake Avastin has lent new urgency to a broader U.S. probe of foreign drug importation that was already under way when the counterfeit cancer drug appeared. Regulators have long struggled to curb the trade in foreign-sourced, discounted drugs over the Internet, which is popular with US consumers and difficult to police.

It is a violation of U.S. drug safety laws to ship pharmaceuticals to the U.S. via international mail or courier, the U.S. Food and Drug Administration (FDA) says. Only drugs approved by the FDA and manufactured at FDA-inspected facilities may be imported by their manufacturers. Third parties typically cannot legally import drugs into the U.S.

Last year, officials from the FDA began scrutinizing a supply chain with hubs in Canada, the U.K. and Barbados that brings low-cost foreign drugs to the US, in some cases after they have been shipped through half a dozen jurisdictions.

Wherever the counterfeit Avastin was manufactured -- possibly China -- investigators are examining a zigzagging route that may have taken the product through Turkey and Egypt before it was sold to Swiss and Danish wholesalers and then to Haughton's U.K. wholesaler, River East Supplies Ltd., according to officials. River East then shipped the product to U.S. doctors through a Tennessee distributor, according to Haughton.

Click here to read more on this story from The Wall Street Journal.