Home > Property & Casualty > Drug heists and supply chain theft: a lesson in susceptibility

Drug heists and supply chain theft: a lesson in susceptibility

The FBI recently outlined a high-profile drug heist investigation in which they caught the team responsible for stealing $80 million worth of commercial drugs in 2010, making it the largest in U.S. history. The same thieves were also responsible for several other similar warehouse break-ins, including a $4.3M theft of Advair Diskus from GlaxoSmithKline (GSK) in August 2009 and a multi-million cigarette heist in July 2009.

Looking back at these incidents through this valuable report, some important lessons for anyone involved in the drug supply chain can be learned by applying some obvious risk management and loss prevention procedures to help prevent a break-in or at least minimize a property loss:

    • All the break-ins took place in isolated locations, with no other businesses nearby, and occurred over weekends when warehouse operations were closed.
    • None of the warehouses had security personnel on site.
    • Some locations had surveillance cameras, but they weren’t monitored.

On the liability side, possibly the most important consideration when designing security for a warehouse facility is to determine whether the product being stored has a street market value. Stolen drugs and medical devices can find their way to online pharmacies and eventually into the hands of unwitting consumers and patients. In the process, there is no guarantee that the manufacturer’s strict handling and storage protocols, such as refrigeration, are maintained, resulting in adulterated products, molecule degradation due to improper product storage/stability, falsified labels, or contamination. All of these pose a health risk to the consumer and can expose the manufacturer to potential product liability claims. (See earlier report from WGA’s Life Sciences Practice on Drug heists and liability on the black market). Other areas of risks to consider are product shortage, loss of brand reputation, and overall loss of confidence in the drug supply chain.

The FBI’s investigation serves as valuable lesson on how susceptible the drug supply chain can be and to review your own facility from a criminal’s point of view.


About the Author

Mindy Evanter is a Senior Vice President at William Gallagher Associates (WGA) with over 25 years of experience, specializing in designing risk management and insurance programs for emerging and cutting-edge clients. Ms. Evanter is an expert at handling her clients’ insurance needs and finding the best program for them at the best value.

617.646.0244 | Mevanter@wgains.com | Connect with Mindy on LinkedIn
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