On February 13, 2013, the Institute of Medicine of the National Academies (IOM) released its report Countering the Problem of Falsified and Substandard Drugs. The report identifies causes and recommends strategies to address the problem of substandard and falsified drugs.

The IOM first distinguishes public health concerns of falsified and substandard drugs from the intellectual property concerns of counterfeit drugs, which the IOM narrowly defines to mean a drug that infringes on a registered trademark.

The IOM then identifies neglect of good manufacturing practices as the root cause of substandard drugs. Because incentives to produce substandard drugs are driven by market forces, the IOM recommends a number of market interventions intended to reduce such incentives. Such recommendations include private-sector assistance for responsible manufacturers in developing countries to meet international quality standards, and investment in pharmaceutical manufacturing in low- and middle- income countries by the International Finance Corporation and the Overseas Private Investment Corporation.

To address the problem of falsified drugs, the IOM recommends the following:

  • restriction of the US wholesale market to firms vetted by the National Association of Boards of Pharmacy;
  • government encouragement of private sector investment through low-interest loans, assistance with pharmacist training, and providing incentives to trained staff who remain in under served areas; and
  • voluntary international agreements to strengthen surveillance systems, regulation, and enforcement by facilitating passage of national laws and permitting extradition of criminals responsible for falsified drugs and criminally negligent manufacture.

FDA Commissioner Margaret Hamburg stated that many of the recommendations in the IOM report support efforts already underway at the FDA, including strengthening global regulatory capacity and surveillance.