International Whistleblower & Foreign Currupt Practices Act Information

International Whistleblower Rewards and Exposing International Illegal Bribe Schemes

by The Law Offices of Jason S. Coomer, PLLC

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The Globalization of the Pharmaceutical Industry & World Economy Has Created Economic Incentives for Fraud in the Supply Chains of Pharmaceuticals, Medical Devices, and other Health Care Products by International Pharmaceutical Supply Chain Fraud Whistleblower Reward Lawyer, International Adulterated Drug Whistleblower Lawyer, and International Pharmaceutical Executive Whistleblower Reward Lawyer Jason S. Coomer

Through globalization of international trade, there has been a shift in many international manufacturing supply chains. As such, raw material supplies for pharmaceuticals, medical supplies, and medical equipment that have traditionally come from the United States and Europe are now coming from China and India. This manufacturing shift has created an environment where adulterated ingredients to pharmaceuticals, medical supplies, and medical devices may be used in the manufacturing of these important products and can create dangerous and defective drugs, medical supplies, and medical devices. International Whistleblowers along the pharmaceutical supply chain are needed to blow the whistle on adulterated pharmaceutical ingredients that are being put into medicine, drugs, medical supplies, and medical devices.  For information on how to report adulterated pharmaceutical ingredients or illegal bribes along the pharmaceutical supply chain, please feel free to send an e-mail message to International Pharmaceutical Supply Chain Fraud Whistleblower Reward Lawyer, International Adulterated Drug Whistleblower Lawyer, and International Pharmaceutical Executive Whistleblower Reward Lawyer Jason Coomer or use our submission form.

Pharmaceutical World Sales Increase to Over $880 Billion Per Year Including Large Sales Increases in the "Pharmering Countries"

Every year over $4.1 trillion (US dollars) is spent worldwide on health services including approximately $850 billion (US dollars) that is spent in the pharmaceutical market on drugs and medications.  In 2011, it is estimated that global pharmaceutical sales are expected to grow by 5% to 7% to around $880 billion.  This growth in sales is led by the 17 so-called "pharmerging countries," which include China, Brazil, Russia, India, Venezuela, Poland and the Ukraine.  These "pharmerging countries", are forecast to see their pharmaceutical spending grow at a 15% to 17% rate in 2011, to between $170 billion and $180 billion overall.

Eight pharmerging countries are amongst the top 20 world pharmaceutical markets, and China is one of the “top three” or will be in the near future.  A few high-profile pharmaceutical companies have been successful in gaining a foothold in these pharmering countries.  These footholds include Abbott’s acquisition of Piramal Healthcare in India — a deal that could potentially make the US giant the top player in this country.  Bayer's and Novartis' investments in China including Novartis'  commitment to invest $1 billion USD in R&D in China and its $125 million USD investment to buy 85 percent stake in a privately held vaccine company.  Pfizer has made inroads into the Russian health care system with a discount-card system in Russia  Sanofi Aventis has purchased Medley, Brazil’s third-largest pharmaceutical company.  GSK and Lilly have also announced anticipated doubling their revenue in emerging markets by 2015.

It is estimated that approximately 10 to 25% of public health care procurement spending including drug contracts, medicines, pharmaceuticals, medical equipment, and medical devices is lost to corrupt and fraudulent acts including adulterated drugs.  As such, there is an international movement to reward pharmaceutical professionals and health care professionals that expose fraudulent and corrupt practices that cost hundreds of billions of dollars and cost lives.  This international movement includes SEC Foreign Corrupt Practices Act Whistleblower Reward Lawsuits and traditional Qui Tam False Claims Act Whistleblower Reward Lawsuits.

Increased Competition and Expansion in the Pharmaceutical Industry Creates Opportunity for Increased Corruption in Pharmaceutical Procement  and Expands the Opportunity for Fraud in Pharmaceutical Drug Supply Chains that can create Dangerous Adulterated Drugs

Included in this globalization of the pharmaceutical industry is a shift in many international pharmaceutical manufacturing supply chains where raw material supplies for pharmaceuticals, medical supplies, and medical equipment that were traditionally from the United States and Europe are now produced in from China and India as well as other emerging countries.  This manufacturing shift create has created an environment where adulterated ingredients to pharmaceuticals, medical supplies, and medical devices may be used in the manufacturing of these products and can create dangerous and defective drugs, medical supplies, and medical devices being purchased by governments and given to patients. 

In the fiercely competitive medical device, medical supply, and pharmaceutical markets, there are strong economic incentives to search for the cheapest ingredients and methods to produce products.  Often these cheaper ingredients and manufacturing locations are in countries where standards and regulations are less stringent and corruption is more common.  When large corporations set up subsidiaries and joint venture partners in these countries, good manufacturing practices can often suffer, fraudulent actors can cut corners to reduce costs, and cheaper sometimes toxic materials can be added to the products.

Example of this scenario include the Baxter Heparin Recall in 2008 where Baxter, a US pharmaceutical firm which manufactures approximately 50% of the US heparin products, voluntarily recalled its heparin due to nearly 350 reported adverse events, including 19 deaths. In investigating this case, the USFDA revealed that the recalled heparin products contained a contaminated API. The tainted API, imported from Changzhou SPL China, contained a heparin-like contaminant that was structurally similar to heparin and not recognized in the solution until the FDA developed special testing for it. In March 2008, the FDA announced that they had identified the contaminant to be an altered form of an oversulfated chondroitin sulfate which is not a natural byproduct of the heparin manufacturing process. In April 2008, the US government held hearings and determined the cause to be non-sterile equipment, lack of following proper procedures, and lack of expertise.

Further, supply chains that are bigger and more complex present more opportunities for fraud. As such, when a large corporation has a supply chain with several international subsidiaries and joint venture partners throughout the world, there are numerous opportunities along the supply chain for fraud to occur including supplier fraud, purchase order fraud, good manufacturing practices fraud, inventory fraud, documentation fraud, export fraud, import fraud, and other pharmaceutical fraud.

International Pharmaceutical Supply Chains Include Active Pharmaceutical Ingredient (API) Manufacturers, Pharmaceutical Intermediate Manufacturers, and Pharmaceutical Excipient Manufacturers All of Which Can Cause Adulterated and Dangerous Pharmaceuticals if Pharmaceutical Supply Chain Fraud Occurs

Pharmaceutical suppliers of raw materials to the pharmaceutical industry include suppliers of active pharmaceutical ingredients (APIs), intermediates, and excipients.It is the United States Food and Drug Administration's expectation that current good manufacturing practices (CGMP) be used for the manufacturing, processing, packing, or holding (i.e., storage) of active pharmaceutical ingredients (APIs), intermediates, and excipients. Further, the FDA recommends that laboratory controls should include the establishment of scientifically sound and appropriate specifications, standards, sampling plans, and test procedures to ensure that raw materials, intermediates, APIs, and containers conform to established standards of quality and purity.

Typically, pharmaceutical manufacturing occurs in two general steps. First, firms convert raw materials into APIs. Then, firms create final formulations by mixing APIs and excipients (other non-active ingredients), pressing the mixture into tablets, or filling capsules or preparing solutions, and then packaging the product for the consumer market.

Traditional West European and North American API Manufactures have been Replaced by Indian API Manufacturers and Chinese API Manufacturers

The active pharmaceutical ingredient (API) market is very competitive with many producers with many API manufacturers specializing and targeting their manufacturing based on joint venture contracts, large pharmaceutical company demand, governmental procurement contracts, regional resources and availability of supplies, and other logistical and profit driven factors. Driven by profits and lower costs, API manufacturing has slowly been shifting from the historical leaders in Western countries to newer firms in India and China. APIs constitute a significant portion of the total cost for a drug. For example, approximately 40-50% of the cost of goods sold for generic oral solids comes from APIs.

The overall API market was valued at $101.08 billion in 2010, and is expected to grow at a CAGR of 7.9% from 2011 to 2016. In 2005, the total world API market was $76B and growing at an average annual rate of 8.2%. In 2005, final formulating firms in North America purchased 42% of APIs sold in the merchant market (75% of whichwere branded), firms in Western Europe purchased 19% (62% of which were branded), and firms in Asia purchased 21% (35% of which were branded). API manufacturing has slowly been shifting from the historical leaders in Western countries to newer firms in India and China. This trend will continue as the Indian and Chinese API industries are growing at nearly 19.3% and 17.6% annually.

The market share held by Indian API manufacturers in the global API merchant market (generic APIs and branded/innovator APIs) was 6.5% in 2005, 12.0% in 2010, and is expected to increase to 22.0% by 2015. India’s share of the global generic API merchant market has increased from 13.5% in 2005 to 22.1% in 2010 and is expected to increase to 33.3% by 2015. Export sales of generic APIs from India increased at an average of 18.9% between 2005–2010 compared with an annual average of 15.9% to the country’s domestic market. India is expected to be the fastest growing API supplier during the next five years and will keep its position above China.

The market share held by Chinese companies in the global API merchant market (generic APIs and branded/innovative APIs) has risen from 14.2% in 2005 to 19% in 2010. The market share held by Chinese companies in the global generic API merchant market increased from 31.1% in 2005 to 35.6% in 2010. Although China remains the largest API supplier on a global basis, growth rates from 2005–2010 of Chinese API suppliers were less than those of Indian suppliers. China’s share of the Western European generic API merchant market fell from 39.2% in 2005 to 35% in 2010. China’s share of the US generic API merchant market increased slightly from 11.5% to 12.9% in 2010. From 2010 through 2015, sales of Chinese API manufactures to the global API merchant market (generic and innovator APIs) are projected to increase at an annual average rate of 9.2% compared with an annual average of 18.5% for Indian API manufacturers. For the global generic API merchant market, sales by Chinese API manufacturers are expected to increase at a yearly rate of 8.1% compared with 16.5% for Indian API manufactures between the forecast period of 2010 to 2015.

While Italy still remains the world market leader in APIs destined to sectors such as cardiovascular or the central nervous system, China leads in anti-infective APIs with approximately 43% of world market share.

As a generalization, Chinese firms have tended to focus on the earlier raw materials stage whereas Indian firms have tended to focus more on the final API manufacturing stage. In many cases, a Chinese firm will make the raw material for a pharmaceutical product and then sell it to an Indian firm who will then convert the raw material into an API. Then, either the same firm, another Indian firm, a global Multinational Corporation (MNC) or a final formulator in a developing country will convert the API into a final formulation product ready for the market. However, the situation is rapidly evolving as both China and India gain new manufacturing skills. Not surprisingly, while many Western API firms have been winding down and/or consolidating their manufacturing capacity, many firms in India and China have been increasing capacity to meet the growing demand.

Traditional West European and North American Excipient Manufacturers have been Replaced by Indian Excipient Manufacturers and Chinese Excipient Manufacturers

Pharmaceutical excipients play an important role in pharmaceutical formulations by adding functionality or by facilitating the processing of a drug product. Recent trends in the pharmaceutical excipient manufacturer industry include: geographic expansion and select investment in emerging markets.

The global market for excipients totaled $4.9 billion in 2011. That value is projected to reach more than $6.7 billion in 2016 after increasing at a five-year compound annual growth rate (CAGR) of 6.5%. The global excipients market can be broken down by material type into three segments – organic, inorganic, and USP (U.S. pharmaceutical) water. The segment made up of organic excipients held a value of nearly $4.6 billion in 2011, and is expected to grow at a CAGR of 6.6% to reach a value of nearly $6.3 billion in 2016. The segment made up of inorganic excipients, worth $268 million in 2011, should be worth $350 million in 2016, a CAGR of 5.5%. The USP water excipients segment totaled $92 million in 2011, and in 2016 that value should reach $114 million, a CAGR of 4.4%.

Increased globalization and strategies for securing the supply chain are important issues for excipient producers. The International Pharmaceutical Excipients Council (IPEC) expanded into China in July 2008 with the formation of IPEC–China. IPEC–China consists of manufacturers, distributors, and users of excipients. IPEC–China expects to work with China's State Food and Drug Administration in establishing standards for excipients, according to an IPEC–China 2008 press release. IPEC is also considering a proposal to create a multiregional body, the IPEC Federation, which will provide advocacy and promote quality in excipients globally, according to recent information from IPEC Europe.

The vision of the IPEC Federation would be to promote quality, safety, and functionality of excipients and to ensure that new excipients introduced into the market meet global standards. The federation would also seek to harmonize drug approval, technical, and pharmacopoeial standards and ensure that safe and effective dosage forms are circulated in the global supply chain. To meet these goals, the proposed federation would develop, implement, and promote voluntary, harmonized guidance and other programs for the pharmaceutical industry to ensure that excipients used in finished drug products meet appropriate standards for quality, safety, and functionality throughout the manufacturing and distribution process.

Regulations for Pharmaceutical Ingredients and Raw Materials

Regulation for pharmaceutical ingredients and raw materials can be complicated and can change depending on where the pharmaceutical ingredients are coming from and where they are being sold. As such, an international producer from China or India that manufactures an API or excipient that sells it to a final formulator in the United States can be subject to the regulatory authorities in China and the United States. The API or excipient manufacturer should be required to produce the product to the quality standards enforced by the Chinese authorities as well as will be required to meet USFDA standards as well.

The USFDA uses Drug Master Files (DMFs) to regulate APIs by stipulating that a final formulator manufacturing according to USFDA guidelines can only buy APIs from firms with an approved US Drug Master File (US-DMF). An API manufacturer submits a US-DMF to the USFDA with complete information on an API, including information on facilities, processes, and articles used in manufacturing. The USFDA, however, will not review the DMF until the final formulator files a New Drug Application (NDA), Abbreviated New Drug Application (ANDA) or ANDA supplement with the USFDA which requests use of this API in a finished formulation. Once a final formulator files, the USFDA schedules a Pre Approval Inspection of the API manufacturer and reviews the API manufacturer’s DMF. If a final formulator does not file to use the API, the USFDA assigns the DMF a number when it receives the DMF but does not review it. The USFDA does not approve DMFs, just ANDAs/NDAs that contain a DMF.

International Adulterated Drug Supply Chain Whistleblower Reward Lawyer, International Pharmaceutical Supply Chain Fraud Whistleblower Lawyer, Medical Device Supply Chain Illegal Kickback Lawyer, Medicine Supply Chain Whistleblower Reward Lawyer, Medicine Supply Chain Fraud Lawyer, and Pharmaceutical Supply Chain Foreign Corrupt Practices Act Lawyer

International Whistleblowers along the pharmaceutical supply chain and other health care professionals are being offered large potential rewards to blow the whistle on adulterated pharmaceutical ingredients, adulterated medicine, adulterated drugs, contaminated medical supplies, and defective medical devices. These whistleblower rewards can come from SEC Whistleblower Reward Lawsuits and traditional Qui Tam False Claims Act Whistleblower Reward Lawsuits. For more information on these potential whistleblower rewards, it is helpful to contact an International Adulterated Drug Supply Chain Whistleblower Reward Lawyer, International Pharmaceutical Supply Chain Fraud Whistleblower Lawyer, Medical Device Supply Chain Illegal Kickback Lawyer, Medicine Supply Chain Whistleblower Reward Lawyer, Medicine Supply Chain Fraud Lawyer, or Pharmaceutical Supply Chain Foreign Corrupt Practices Act Lawyer that understands these potential whistleblower reward lawsuits as well as whistleblower protections that can help protect professionals in the medical, health care, and pharmaceutical industries.

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As an International Pharmaceutical Ingredient Supply Chain Fraud Whistleblower Reward Lawyer, he works with other powerful international whistleblower lawyers that handle large whistleblower reward cases. He works with Los Angeles International Whistleblower Reward Lawyers, San Antonio Health Care Procurement Fraud Lawyers, New York International Whistleblower Reward Lawyers, Dallas Health Care Fraud Whistleblower Lawyers, San Francisco International Import Export Fraud Lawyers, Houston International Medicine Supply Chain Fraud Whistleblower Lawyers, and other International Public Health Procurement Fraud Whistleblowers throughout the United States and the world to blow the whistle on corruption and fraud.

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If you are an international pharmaceutical company professional, international pharmaceutical company executive, international medical device professional, international medical device executive, public health administrator, medical doctor, or other professional with original source knowledge of a potential International Pharmaceutical Supply Chain Whistleblower Reward Lawsuit, International Adulterated Drug Whistleblower Reward Lawsuit, Counterfeit Drug Ingredient Whistleblower Lawsuit, Toxic Medication Illegal Kickback Lawsuit, Pharmaceutical Supply Chain Whistleblower Reward Lawsuit, or Drug Company Foreign Corrupt Practices Act Lawsuit or Foreign Corrupt Practices Act violation that could lead to an International Whistleblower Reward Lawsuit, please contact an international foreign corrupt practice act whistleblower reward lawyer to help expose the wrongdoing and protect yourself.

International Whistleblowers along the pharmaceutical supply chain and medical device supply chain are needed to blow the whistle on adulterated pharmaceutical ingredients that are being put into medicine, drugs, medical supplies, and medical devices. For information on reporting adulterated pharmaceutical ingredients or illegal bribes along the pharmaceutical supply chain, please feel free to send an e-mail message to International Supply Chain Whistleblower Reward Lawyer, International Adulterated Pharmaceutical Supply Chain Whistleblower Lawyer, and International Pharmaceutical Executive Whistleblower Reward Lawyer Jason Coomer or use our submission form to discuss a potential International Medical Device Supply Chain Whistleblower Reward Lawsuit, International Adulterated Drug Whistleblower Reward Lawsuit, Adulterated Drug Contract Bribe Whistleblower Lawsuit, International Pharmaceutical Whistleblower Reward Lawsuit, and International Drug Supply Chain Foreign Corrupt Practices Act Lawsuit.

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