HDMA COMMENDS DEPARTMENT OF JUSTICE FOR ARRESTS OF ROGUE INTERNET OPERATORS

President And CEO John Gray Stresses Association’s Continued Commitment To Patient Safety

Reston, VA — April 13, 2005 — “The Healthcare Distribution Management Association (HDMA) strongly supports the United States Department of Justice (DoJ) and their continuing and successful efforts to capture and arrest criminals involved in the sale of illegal and unapproved pharmaceutical products,” said John M. Gray, HDMA President and CEO. The DoJ reported on April 20 that it arrested 16 suspects in an effort to thwart drug counterfeiting and illegal trafficking over the Internet.

HDMA believes every effort must be taken to ensure that no counterfeit, adulterated or otherwise tampered-with drugs enter the marketplace through any point in the healthcare system. An over-riding responsibility of our nation’s healthcare distributors, with their supply chain partners, is to ensure the safety, quality and integrity of the products they distribute.

HDMA has a solid history of working with supply chain partners, state and federal lawmakers and regulators to advocate for stricter pharmaceutical licensing and regulations, new technologies to track and trace products and industry guidelines for maintaining supply chain integrity.

HDMA has been proactive on a number of security fronts and in working with its Government Affairs Committee in early 2004, advocated minimum security principles for providers of Internet pharmacy services.

HDMA also has led the healthcare distribution industry in recommending anti-counterfeit measures. Efforts have included:

1. Throughout 2002, HDMA worked with Florida’s Department of Health and the state legislature to enact legislation that strengthened the state’s counterfeiting penalties.
2. In early 2003, HDMA partnered with the Massachusetts Institute of Technology's (MIT) Auto-ID Center to promote education and awareness of Electronic Product Code (EPC) as a powerful anti-counterfeiting technology.
3. In August 2003, HDMA held the first meeting of the Product Safety Task Force. This task force recommended multi-pronged anti-counterfeit solutions, including track and trace technology.
4. HDMA approved in November 2003 a position statement calling for RFID/EPC adoption in healthcare, noting that the technology has the greatest potential to secure the supply chain from counterfeit drugs.
5. In November 2003, HDMA developed its Recommended Guidelines for Pharmaceutical Distribution System Integrity. These Guidelines raise the standard of practice throughout the distribution system by recommending drug purchasers conduct tough due diligence, thorough background checks and on-site inspections of sellers of prescription drugs.
6. In November 2003, HDMA commented to the FDA and recommended electronic track and trace solutions, stronger state licensure laws, increased penalties for counterfeiting and industry-wide adoption of best business practices as key provisions necessary to combat criminals tainting the U.S. prescription drug supply.
7. HDMA and EPCglobal in January 2004 signed a Memorandum of Understanding (MOU) calling for both groups explore the potential benefits and applications of EPC technology in the pharmaceutical supply chain.
8. HDMA in February 2004 joined Project Jumpstart, a group that develops EPC technology pilots in the healthcare supply chain.
9. In April 2004, HDMA testified before the Nevada State Board of Pharmacy and recommended the Board implement stronger penalties for the crime of counterfeiting.
10. In September 2004, HDMA joined the NABP’s National Drug Advisory Coalition, and helped develop the criteria used to determine a national list of products susceptible to counterfeiting.
11. In February 2005, HDMA President and CEO John Gray testified before the Senate HELP Committee on the safety and security of the supply chain, emphasizing the association’s commitment to patient health and safety.

About HDMA

For more than 125 years, HDMA has worked with members to secure a safe, efficient and reliable healthcare distribution system that is able to provide life-saving health products and services. HDMA members are responsible for ensuring that billions of units of medication are safely delivered to tens of thousands of retail pharmacies, hospitals, nursing homes, clinics and other provider sites in all 50 states in the most efficient manner possible. HDMA members are a vital link in the healthcare system, providing highest-quality solutions that remove costs and empower providers to deliver care more effectively. Through our advocacy activities, HDMA operates at the forefront of healthcare and ensures that members’ perspectives and businesses are understood and addressed in legislative and regulatory arenas.