U.S. prescription drug system

The U.S. prescription drug system is currently under attack, according to an October 19, 2003 article by Gilbert M. Gaul and Mary Pat Flaherty, staff writers for the Washington Post:

"For half a century Americans could boast of the world's safest, most tightly regulated system for distributing prescription drugs. But now that system is undercut by a growing illegal trade in pharmaceuticals, fed by criminal profiteers, unscrupulous wholesalers, rogue Internet sites and foreign pharmacies. ... In the past few years, middlemen have siphoned off growing numbers of popular and lifesaving drugs and diverted them into a multibillion-dollar shadow market. Crooks have introduced counterfeit pharmaceuticals into the mainstream drug chain. Fast-moving operators have hawked millions of doses of narcotics over the Internet."

"The shadow market takes advantage of technology, global trade, vast disparities in pharmaceutical prices, the explosive growth of enticing new miracle drugs and the self-medicating habits of an aging baby-boom population. It extends from small, backroom operations to buck-raking Internet pharmacies to the warehouses of the nation's largest drug distributors. ... Diverters reap millions illegally by buying drugs at a discount to sell to secondary wholesalers, which then sell them to other distributors, including the Big Three wholesalers that supply most major hospitals and chain stores. The Big Three risk buying from these secondary sources because they can get drugs more cheaply than if they bought them directly from manufacturers. In some cases, the drugs have turned out to be diverted, diluted or counterfeited."

"Three Fortune 500 companies -- Cardinal Health Inc. of Dublin, Ohio; McKesson Corp. of San Francisco; and AmerisourceBergen of Chesterbrook, Pa. -- dominate the drug wholesaling industry, with combined annual revenue of $146 billion. They are known in the business as the Big Three."