Swiss link found in fake medicine supply chain

A customs employee in Zurich shows some seized fake Viagra Keystone

A Swiss company has been implicated in the supply of a fake cancer drug sold in the United States, raising concerns about Swiss firms trading in medication abroad.

This content was published on March 4, 2012 minutes

In mid-February the US Food and Drugs Administration (FDA) announced that several oncologists in California, Texas and Illinois had received what appeared to be a fake replacement for the cancer drug Avastin from their suppliers.

Unlike the genuine article produced by Roche subsidiary Genentech, the false medication did not contain the active ingredient Bevacizumab. According to the FDA it was dangerous as well as ineffective.

The oncologists were most likely not sourcing the drug directly from the manufacturer for price reasons. A 400mg dose of the medication costs around SFr2,000 ($2,189). Depending on the illness, a patient has to pay SFr5,000 to SFr10,000 per month for treatment. The costs for a treatment cycle can run from SFr60,000 to SFr100,000.

The growing globalised trade in parallel imports mean that medication – including the real thing  – is sometimes more cheaply available when procured through less transparent channels.

Long chain

The case of fake Avastin is just one example. Where it was manufactured and how it got into the complicated delivery chain is currently being investigated. One of the intermediaries, Hadicon AG, is domiciled in canton Zug. The company says it has lodged a complaint with the Zug public prosecutor’s office.

Hadicon ordered the medication in Egypt from a company called SAWA for importing and exporting, then stored the goods in a Zurich duty-free warehouse before sending them on to Caremed in Denmark. The Danish intermediary sent the order to Britain from where it was dispatched to the US.

At the end of 2011 Hadicon’s managing director Klaus-Rainer Tödter learned from the Danish deliverer that Avastin had been confiscated in Britain, he said in a written response to questions. A part of the fake consignment apparently could not be intercepted and ended up in the hands of the US oncologists.

Hadicon ordered the medication in Egypt with the knowledge of its Danish intermediary. Tödter did not comment on where the Egyptian company sourced the counterfeit medication.

The Swiss company, which employs seven people in Zug, trades in pharmaceutical and medical products and devices. Hadicon has a licence from Swissmedic, the Swiss medicine supervisory body, its vice-director Hans-Beat Jenny confirmed to

It is just one of 60 Swiss companies which have clearance to trade in medication abroad, and only abroad. For inland trade the conditions are markedly stricter. “Every country primarily wants to protect its own population,” Jenny said.

Only country worldwide

Switzerland is the only country in the world that gives permits to trade in medication outside its borders. Proof is required that a fully functional system is in place to ensure the pharmaceutical quality of the medication.

“Amongst other things, they have to register and record the receipts and outgoings,” Jenny said. “The company has to provide information about the original producer and order numbers of the goods delivered.”

Swissmedic did not wish to comment on whether Hadicon had followed the correct procedure with the fake  Avastin while an investigation is under way.

With a thriving pharmaceutical sector, Switzerland occupies a leading place in the global trade of medicines. The turnover of Swiss-based pharma multinationals is close to SFr30 billion, 98 per cent of which is exported. There are more than 300 Swiss companies selling pharmaceutical products.


“Our country deliberately offers a favourable environment to traders: There are economical and tax-friendly conditions, trade and business freedom are highly valued, and compared with most other countries it is easier to set up a company,” Jenny explained.

The good reputation also makes Switzerland  – despite its strict licensing policy – a popular front for questionable medication traders.

“That’s how it is,” Jenny confirmed. “With counterfeits you often find that the true origin of the product has been obscured.”

A classic example was medication that was sent from Pakistan through Israel to Holland. The goods were then delivered to a German wholesaler.

“Because the intermediary firm was based in Switzerland and the goods were delivered from Israel, the purchasers had no suspicions. Fake drugs often undergo such routes from country to country, becoming a step more trustworthy each time.”

“If the German wholesaler had been offered goods direct from Pakistan to begin with they would probably have smelled a rat.”

No suspicion

Should Hadicon not have heard alarm bells when it was offered a cancer drug by an Egyptian intermediary?

“There have never been any problems with deliveries from the [Egyptian] firm SAWA up to now,” Tödter responded in writing.

“Hadicon has to accept it has been the victim of a major international fraud. The originators must have known that medication in its original packaging smuggled into the supply chain could not be opened.”

In the past ten years “just” a handful of counterfeit cases have emerged involving Swiss trading firms. Whether this is the tip of the iceberg is difficult to ascertain, Jenny said. There are countries like Nigeria, where 50 per cent of prescription medications available through official channels such as hospitals and pharmacies, are false.

Fake drugs

It is estimated that five per cent of all medication sold worldwide is fake.

In the battle against counterfeit drugs, the EU is examining an electronic instrument that should increase the security of the supply chain:  An electronic track and trace system would ensure that medication and its production history could be checked at any time.

Instead of the order number which currently appears on pharmaceutical products, every package or even every tablet would receive an identity number.

The server would record when packet x leaves the factory, the wholesaler would confirm its arrival etc. until the pharmacist dispenses it to the patient and cancels the number.  If that identity number then appeared somewhere else the server would set off the alarm.

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