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May 6, 2009   XStream’s XT250 Verifies World Health Organization Counterfeit Estimate of US Rx Supply Chain

XStream Systems, Inc. headquartered in Sebastian, Florida, announced today that based on their usage data from end user XT250 systems, they can verify that the World Health Organization’s (WHO) estimate of 1% of the United States pharmaceutical supply chain being counterfeit, is accurate.

XStream System’s XT250 Materials Identification System verifies and authenticates materials within its sealed, unit of sale container. The standalone system is currently deployed in several pharmaceutical distribution companies that distribute pharmaceuticals throughout the United States.

“Based on our macro look at the data from the end user, we can confirm that the WHO estimates are reasonably accurate”, stated Alan Clock, Senior Vice President at XStream. “Our system is the only technology that can accurately authenticate pharmaceuticals within the supply chain without destroying the product or packaging so we have excellent visibility on what is going on literally inside the supply chain .”

“The XT250 is the only materials analysis technology that can keep up with the tremendous flow of drugs throughout the supply chain. We are seeing data that suggest between 0.67% and 1.4% of receivables and returns within these pharmaceutical distributor end users are likely counterfeit products or fraudulent medications,” explained Mr. Clock.

From the data, XStream is learning that authentication rejection/failure rates vary between pharmaceutical products, and even within a given pharmaceutical product the rejection rates can vary significantly over time. In some cases isolated bottles have been rejected, while in other cases entire lots have been rejected. “You can’t predict when the counterfeits will show up,” said Mr. Clock.

XStream’s data validates that the members of the pharmaceutical supply chain (manufacturers, distributors and dispensers) should be using authentication technology more and taking steps to screen as many pharmaceuticals as possible, as often as possible. Currently many regulatory officials have been advocating more frequent inspections at foreign manufacturing facilities as the primary solution to the problem of poor manufacturing and counterfeit medications in the supply chain. While inspections are needed, given the sheer quantity of places to inspect and global nature of these sites, inspectors have little chance of catching counterfeits. In addition, XStream’s data suggests that counterfeits are inserted at a multitude of sources all along the supply chain. The point of production is not the primary starting point for fake medications. Verification and authentication at each point along the supply chain is the most effective way to detect and interdict fraudulent and counterfeit pharmaceuticals.

“The good news is that the United States is one of the last of the developed countries to see an increase in counterfeit medications. The United Kingdom has already seen an increase in the last three years and it stands to reason it will not be long till we see significant increases domestically as well. Because of this impending proliferation, the XT250 is essential for the protection of the consumer since it is one of the only tools available which can act as a roadblock to counterfeiters.”, said Mr. Clock.

About XStream Systems
XStream Systems produces next-generation equipment for material identification. Their patented systems are based on Energy-Dispersive X-Ray Diffraction (EDXRD) technology. The company’s XT250™ System enables testing of powders, pills AND entire sealed bottles. The equipment’s superior sample penetration allows the identification of contents inside opaque plastic, cardboard and even metal packaging. XStream’s SPN (Secure Pharma Network) integrates testing data into a real time supply chain safety management solution. For more information, call 1-800-597-1191 or visit  www.xstreamsystems.net

About The XT250 System
The XT250™ Material Identification System, based on Energy Dispersive X-Ray Diffraction (EDXRD), is an easy to use, checkpoint screening device that matches a pharmaceutical’s molecular crystalline structure against its standard profile to determine its authenticity and quality. The XT250 System’s superior penetration allows it to scan directly through the manufacturer’s packaging allowing wholesales to ensure safety beyond current pedigree methods by verifying their inventory at receiving points.

About the Secure Pharma Network
Secure Pharma Network (SPN) is a network suite of functionalities for verification data and system updates. Customizable and saleable, it can be integrated with inventory control and e-pedigree systems. Critical data on substandard medication can be monitored by manufacturers, distributors, dispensers, re-packagers, and government agencies giving vital up-to-date information to help protect the supply chain across the globe.

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