BALTIMORE — For two months after emergency surgery to replace a diseased liver, Timothy Fagan lived a nightmare, injecting weekly a drug that was supposed to help him heal.
Several hours after each shot, his muscles would cramp so violently that he often limped for days. Doctors assumed Fagan, 16, just wasn't responding to the medicine meant to boost his red blood cells. Fagan and his parents thought the cramps were a side effect of the drug, Epogen.
Fagan discovered he was the victim of fraud when a subsidiary of the CVS pharmacy chain told him it had received a federal alert about counterfeit Epogen. A check of the labeling on the packages he had been shipped indicated they were fake.
Fagan said the drug's manufacturer, Amgen, later told him the counterfeit contained only a fraction of the listed drug content.
Two years later, the mystery lingers: Food and Drug Administration officials confirm they're investigating, but Fagan still doesn't know how he wound up with the counterfeit drugs.
"Every time I take a ... pill, I still wonder, 'Is this stuff counterfeit?' " said Fagan, now a student at Iona College in New Rochelle, N.Y. "It always runs on your mind. It's horrible."
Fagan -- who filed a lawsuit in August 2003 against Amgen, CVS and its subsidiary, and the drug's distributor -- was the victim of a lucrative and dangerous counterfeit drug trade finding its way into America's pharmacies and medicine cabinets.
The federal government urged manufacturers in February to consider using new technology -- which includes tiny hidden transmitters and baked-in chemical "fingerprints" -- and researchers say some new ID tricks will be in products this year.
But despite the promise of high-tech developments, experts say counterfeiters have never had it better, thanks in part to gaps in the distribution system and more people buying increasingly expensive drugs over the Internet and abroad.
"For folks who are into crime and counterfeiting, prescription drugs are the new gold fields," said James Polli, a University of Maryland pharmacy-school researcher who helped develop a "fingerprinting" system. "Smart, talented, well-funded people are putting a lot of effort into making products that look authentic. This is not about some guys with a bathtub full of chemicals in their garage."
It's estimated that fewer than 1% of drugs in this country are fake. But FDA officials say they're seeing larger volumes of counterfeits and better organized operations. Federal counterfeit drug investigations have risen from five a year through the late 1990s to 22 last year, said William Hubbard, an associate FDA commissioner.
Hubbard said some officials estimate it's more profitable to fake a prescription drug than to import cocaine or heroin.
The FDA worries the problem will only get worse as more people travel abroad or visit Internet sites -- some of which buy medicines in countries with drug stocks rife with counterfeits -- to fill prescriptions that can cost hundreds of dollars per dose.
Counterfeiters are also becoming more adept at insinuating their fakes into the massive U.S. distribution system, where billions of drug doses -- in an array of packages, shapes and prices -- flow from manufacturers to distributors to pharmacists to patients.
Officials say ensuring the system's integrity will prove daunting.
Three national distributors -- AmerisourceBergen, McKesson and Cardinal Health -- supply the majority of prescription drugs that reach U.S. retail pharmacies. Those companies say that between 97% and 99% of their product comes directly from the manufacturer; the remainder is supplied by thousands of other U.S. wholesalers -- estimates vary from 7,000 to 30,000.
"The question is, where do those [other] wholesalers get their products?" said Frank Palumbo, executive director of the University of Maryland's Center on Drugs and Public Policy. "We just don't know."
The problem, experts say, is that federal and state agencies share the burden of regulating drugs. In a state with lax policies, it's easier for a distributor to get a license. No national regulation exists to trace the path that any particular drug takes from manufacturer to pharmacy, said Lew Kontnik, an author and security consultant for pharmaceutical companies.
In February, the National Assn. of Boards of Pharmacy created model rules that could be used by states to tighten regulations governing distributors' licensing. But the FDA, in its much-anticipated February report, said it won't order drug companies to adopt security measures to combat fraud. Instead, it will ask the industry to come up with its own technology plan.
The result has led to drug companies, distributors and government officials scrambling to evaluate and implement new technologies and security measures.
"It's not like ... there's a grand plan. It's more of a gold rush, a mob rushing in. There are all these different people doing all these different things," Kontnik said.