The discovery of a second batch of a phony cancer drug in the United States this week has frustrated regulators in California, where the nation's most stringent law to track and trace pharmaceuticals was passed in 2004 but has yet to be implemented.

Federal authorities said Tuesday that a counterfeit version of Genentech's best-selling cancer drug Avastin has been found in undisclosed locations - less than two months after another bogus version of the same drug made it to medical offices in Southern California, Texas and Illinois.

"It's a situation that really is stunning the medical community right now. Everybody begins to question every drug," said Dan Wood, spokesman for the Medical Board of California, the state agency that regulates physicians.

Fake prescription drugs, along with diluted or expired medications, are a growing problem in the United States and around the world.

About 11 times as many cases of counterfeit drugs were verified in 2010 as in 2002 - 2,054, up from 196 - according to the Pharmaceutical Security Institute, a nonprofit, industry-backed organization that performs the analysis.

Supply chain vulnerable

The World Health Organization estimates that less than 1 percent of medicines in developed countries are phony. But the discoveries of the counterfeit Avastin show the U.S. drug supply chain is vulnerable.

The United States has no national system for tracking drugs, yet its complex drug supply chain involves a maze of wholesalers and secondary wholesale marketers.

In 2004, California lawmakers tried to address the problem in the state by approving the nation's first electronic drug-tracking system. The law requires each legitimate bottle or vial of prescription drugs to carry a unique serial number. That creates an electronic record every time the drug changes hands - from manufacturer to wholesaler to the pharmacy.

Originally set to take effect in 2007, the law has been delayed numerous times as drugmakers have said they need more time to develop the tracking system.

Drug industry representatives also object to tracking individual drugs, arguing that, at least initially, drugs should instead be tracked in large groups by lot number.

At the federal level, legislation has been introduced in the House of Representatives to create a mandatory bar-code system to trace prescription drugs. A national drug-tracking law would supersede California's legislation, but state regulators have argued that Congress is moving slowly on the issue, so it's time for the state to act. "People are talking about our law and how if it were in effect, we might not be having this (counterfeit drug) problem right now," said Virginia Herold, executive director of the California State Board of Pharmacy.

California's law phases in for pharmaceutical manufacturers starting in 2015, and is scheduled to be fully in place for all drugmakers, wholesalers and pharmacies by 2017.

"We're working with California because their law is the current law, but at the same time, we think it makes sense for Congress to consider a national system that maybe moves a little more slowly," said Marjorie Powell, senior assistant general counsel to Pharmaceutical Researchers and Manufacturers of America, which represents drug and biotechnology companies.

Finding the fakes

It's unclear, however, whether California's law could have prevented the recent sale of fake drugs in the state. The state law covers drugmakers, wholesalers and pharmacies but not physicians' offices, which were where the phony drugs were found.

In February, officials with the Food and Drug Administration said they found fake Avastin containing no trace of the legitimate drug's active ingredient in as many as 19 medical practices, 16 of which were in Southern California. There have been no reports of patients actually receiving the drugs.

The counterfeit label identified Roche rather than Genentech as the manufacturer, and had French and Arabic writing on the box. Roche owns Genentech, but Genentech makes the drug, which is used to treat cancers of the colon, lung, kidney and brain.

The FDA continues to investigate that case as well as the latest incident, in which a fake Turkish version of Avastin, labeled with the Turkish brand name Altuzan, was found in the United States. FDA officials declined to reveal how or where the drugs were discovered, but said they also did not contain the real drug.

Genentech officials said even authentic Altuzan would be illegal to sell in the United States. The company works exclusively with specific wholesalers to sell only the U.S. version of the drug, which is administered by infusion under a doctor's supervision and cannot be bought in retail pharmacies.

Most drugs are sold in the United States through one of three big wholesalers: McKesson, Cardinal Health and AmerisourceBergen.

Overstocked items

Fake drugs typically find their way into pharmacies and doctors' offices through secondary wholesalers who buy overstocked or bulk items and sell them at a discount. But they also can knowingly or unwittingly buy bogus, diluted or expired drugs from an unsavory source.

"If you're buying from one of our authorized wholesalers- and there's a special list of people authorized to distribute Avastin - you can be confident you're getting the authentic drug," said Genentech spokeswoman Charlotte Arnold.

Many local pharmacists said they buy directly from the manufacturers or major wholesalers.

Scanning method

At UCSF, pharmacists use sophisticated scanning methods to help ensure that the product is legitimate.

"When a product comes in, we scan the individual product and make sure the bar code on the product matches to something on our database," said Bret Brodowy, UCSF's director of pharmacy. "If it were an adulterated product and wasn't scanning correctly, we'd pick that up."

Pharmacists said drug shortages in the United States may have exacerbated the counterfeit problem because health providers have had to scramble more to find medications and may turn to new and possibly less-reputable suppliers.

Michelle Taymuree, clinical pharmacy manager at Diablo Valley Oncology in Pleasant Hill, said medical practices need to buy from secure sources and be leery of suppliers that offer unusually good deals.

"When (the price) is so much different from what's available for everybody else on the market, of course it raises concerns," Taymuree said. "If it sounds too good to be true, it usually is."