The hidden danger of the gray market

August 16, 2016

Digital Esthetics magazine explores the shadowy world of the gray market, where people can buy unverified dental products for cheap-and possibly endanger patients in the process.

Imagine you're an average patient who's just gone in for a fairly standard procedure-maybe you got a new crown, or a small bridge. Your dentist placed a crown made of zirconia instead of gold, and you're happy about it-it's much cheaper than a gold restoration would have been, and your dentist explained how strong it is and how long it will last. Plus, it looks great.

You head home, and in the next few days, you start to get headaches. You feel run down, and you're not really sure what the problem is. You wonder if you could be having a reaction to something you ate, or something you were exposed to. You trace back the last few days to see if anything had changed in your diet or activities. Nothing comes to mind, however, except … you just got a crown made of zirconia. And you wonder:

What's in my mouth?

This story might sound far-fetched, but in fact the possibility for it to happen might be more common than you think, at least according to many of the sources Digital Esthetics spoke to for this article. The reason it's a possibility is because of materials, equipment and dental supplies that enter the United States by skirting around regulatory, market and governmental standards. This shadowy availability of goods outside the normal modes of commerce describe something called the gray market. And all-too-often, dentists and dental technicians can be seduced by the low prices and false promises of the gray market.

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What IS the gray market?

The gray market can be tough to accurately define, but, generally, in a dental context, it refers to any dental goods, products, supplies or equipment that somehow avoid the regulatory process. "When we talk about the gray market, we are talking about products sold through an unsecured supply chain," explains Simon Hearne, Vice President of International Business, 3M Oral Care. "There are three main categories these fall into:

"1. Products that are diverted from an authorized channel: These products often don’t comply with local laws and may have compromised quality due to improper handling or storage conditions;

"2. Repackaged or relabeled products: This practice often happens with products nearing the end of their shelf life. Gray market dealers may change or remove the expiration date and repackage the product in order to sell it to unsuspecting buyers. In some cases products may be sold years past their expiration date, which can lead to problems like improper curing or bonding;

"3. Counterfeit goods: These are fake products designed (with varying levels of competence) to look like the real thing. This category is the least common but should be of the highest concern for the industry, as it poses the greatest risk to safety."

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The gray market increases the likelihood that unsafe products or materials can make their way to patients. "When customers buy gray market products, they have no guarantee that the products have been shipped or stored correctly, or that their labels have not been falsified to conceal an expiration date or important safety data," Hearne explains. "In addition to the risks posed by improper handling and storage, the formulation or labeling of these products may not comply with U.S. laws. Any of these factors can compromise product efficacy and patient safety. Furthermore, many channels that are providing gray market products also sell products that are counterfeit. Counterfeit products are of the highest concern because of the safety risk associated with buying a product with a truly unknown composition."

Incorporating a gray market product into just one part of the workflow can compromise the entire restorative process. "Using a gray market component invokes several short- and long-term risks to consider," says Paul Patella, Director of Key Accounts, Lab Division, Straumann North America. "[Dental technicians face:] paying out-of-pocket on a case redo because many of these gray market companies offer no reimbursement for failed products [or the] potential for legal action; the loss of the referring clinician; and of greatest importance, the patient’s situation is now quite compromised and the laboratory can be at a significant legal risk."

Next page: Financial concerns ...

 

Plus, there are the financial ramifications of buying from shadowy sources. "Lab owners should care, because if they purchase products from unauthorized distributors, they may not be getting what they paid for," says Wayne O. Ledford, CDT, Vice President of Sales at Ivoclar Vivadent. "Furthermore, if there’s ever a problem with the product in the lab or in the mouth, where does the lab turn to for support? Finally, there’s the issue of fraud. We have seen cases of customers who purchase a piece of equipment online from a seller who quotes prices much lower than the market, only to find out that the website is a shell and has no product to sell. By the time that’s discovered, the site is down and the customer has lost his money."

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In the United States, usually gray market goods are sold or shipped so as to somehow avoid the notice of the regulatory body, the Food and Drug Administration (FDA). The FDA is responsible for keeping out harmful medical supplies of the U.S., and for making sure the materials and products used in patients' mouths are safe for both the dental team and for patients. Generally, that means the FDA has to approve of everything that would go into a patient's mouth, including dental materials. So how would something unapproved be able to make it through to final consumers?

Finding a way around regulations

Well, first of all, an unapproved seller could just skip the FDA process entirely. "If the distributor is selling a product intended for a foreign market, it may not meet the requirements of US regulators," Ledford notes. "[Plus,] labs cannot [tell if a product comes from the gray market]. That's part of the problem. Counterfeit products and counterfeit packaging are also very prevalent in today’s global markets. The only way the lab can be sure that what they purchase is legitimate is to buy from an authorized source." It's remarkably easy to go buy a variety of dental products from eBay or third-party Amazon sellers, and really have no idea where they came from or if they are approved by the FDA.

In addition to methods that completely skirt around regulatory bodies, some materials also may be taking advantage of the FDA's so-called 510(k) process, or "premarket notification." Essentially, this process allows manufacturers to acquire FDA approval by demonstrating their product is "substantially equivalent" to another product on the market that already has been approved by the FDA. But some observers of the dental market say this process could provide openings for companies to bring harmful products into the United States, where unwitting dental labs and dentists could purchase them. "The FDA takes data from a prospective supplier [and] data about the product they’re going after approval for," explains Jay Thomas, Product Manager, Ceramics at Tosoh. Tosoh produces much of the zirconia powder used in the production of zirconia discs and blocks, which means Thomas has a keen awareness of the specifics of the zirconia market.

"To the best of my knowledge, the FDA does question these submissions, where the submitter has to answer questions to the FDA’s satisfaction in order to ultimately get the 510k approval," Thomas continues. "But what we are seeing is any company can introduce a disc or block with this data, and essentially say, 'my product is significantly equivalent to that of another company who already has 510k approval.' As a result, the FDA grants approval to the submitter because the FDA is satisfied with the other company’s data and answers.

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"The FDA does not have the resources to follow up on every single one of these products [requesting 510(k) approval]," he says. "[Observers] can see who has 510K approval and who doesn’t, and many of the products come from overseas. And if the FDA is not going to, for example, China to inspect them, that is cause for concern. It has to be tightened up somehow."

This obviously has significant consequences for the safety of dental products. When asked to comment on the clearance of zirconia, and on the 510(k) approval process specifically, the FDA said in an emailed statement, "The FDA is concerned about the gray market sale of legally-marketed dental products. We have been working with certain dental product resale websites to help identify any illegally marketed devices that are on the site for resale so they can remove them from their sites. We also encourage manufacturers and medical professionals to report to the FDA any instances of device sales that appear to be illegally marketed without appropriate FDA review. It’s important to note that while the FDA regulates dental devices for safety and effectiveness by premarket review and clearance or approval of medical devices to be legally marketed, it does not regulate the practice of dentistry. All dental device applications that come to the FDA through the 510(k) pathway receive a thorough review to establish substantial equivalence."

Next page: How to avoid dangerous products in your lab or practice ...

 

How to avoid making a costly mistake

So if these products are getting into the United States, either around regulations or through other means, how can dentists and dental technicians be sure they're not buying gray market products and hurting patients-and opening their businesses up to liability? Well, the first step is to practice common sense when making purchases.

"Dentists should remember that if a deal seems too good to be true, it probably is," Hearne says. "Gray market distributors purchase and sell products well below the wholesale cost set by authorized distributors. For a dental business trying to watch pennies, this difference can be tempting. But make no mistake: the risks far outweigh the rewards.

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"The first thing you can do is check for obvious and observable characteristics that may constitute a counterfeit or gray market product," he continues. "This includes smeared, irregular, uneven or otherwise low-quality printing, out-of-date product name, a blocked barcode, text like 'for export only' or 'not registered for sale in the European Union or United States' or an expiration date that appears to have been changed. If the packaging doesn’t send up any red flags and appears identical to the official company packaging, you can consider the pricing structure. If the price of a product is significantly below standard pricing, the product may be gray market or counterfeit. Another tip-off is if you’ve purchased the product from any party other than the manufacturer’s authorized distribution channels. If you’re unsure which distributors are approved, check the manufacturer’s website or contact their customer service team to find out."

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Dental professionals concerned about avoiding gray market goods can also make sure the sellers they purchase products from are reliable and trustworthy, and that every component is original to a company who has sought and been granted official FDA clearance. "The point of sale is the main driver: you get the IFU, invoice, material packaging with a material composition sticker all in the company’s branding," explains Patella. "[For instance,] Straumann laser etches all of its titanium abutments to clearly indicate it’s an OEM device; every Straumann CARES CAD/CAM restoration ships with material composition stickers detailing the place of origin and material composition, in addition to the IFU and invoice that are Straumann-branded."

Next page: Really understanding the risks ...

 

Is it worth the risk?

If labs find they have-even inadvertently-used a product acquired on the gray market, it can completely jeopardize their business. "Purchasing products from an unauthorized source means that typical options for redress through the manufacturer are no longer an option," Hearne explains. "Purchasers can seek recourse through traditional legal channels, but reaching resolution can be difficult and time consuming."

Ledford echoes this warning. "One of the first places that lawyers go in discovery is the purchase record of the product in question," he says. "A lab owner who is purchasing from an unauthorized distributor or considering such a purchase should ask himself if it’s worth that risk."

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Dentists need to help make sure their products are safe for patients as well. "[Dentists] should ensure their lab purchases products exclusively from manufacturers’ authorized distribution channels, and that they always do a background check on new dealers that solicit them," Hearne says. "Labs should be transparent about purchasing procedures and should be able to provide adequate information to prove that the products they purchase are coming from a reputable provider."

"Dentists should be willing to have a conversation with the laboratory to discuss the source of the products they use," Ledford agrees. "If the material is an alloy or ceramic, they should ask the lab to provide IdentAlloy or IdentCeram certificates with the case. These certificates are only available directly from manufacturers and authorized dealers."

All in all, every expert agrees the risk-however small-just isn't worth it. After all, these are real patients with real lives who are being put in danger because of materials, equipment and supplies that might not be safe. "Labs and dentists need to judge what they’re buying by reputation of the supplier and of course the price," Thomas advises. "If it’s well below market price, some bells should go off. The buying decision is theirs-and the risk is theirs."

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"The bottom line is that gray market products put patient safety at risk, and it is up to the entire industry-manufacturers, distributors and individual dentists and labs to do their part to keep patients safe," Hearne says. "By working together, we can all help protect the integrity of the industry that we’ve worked so hard to build."