Counterfeit Pharmaceuticals

Counterfeit Pharmaceuticals and Their Effect on Consumers Worldwide

Jessica Andrec
Mr.Toole
Global Perspectives
Friday May 13, 2016
Table of Contents
Preface..3
Background..6
Expert: Professor Paul N. Newton..10
Expert Bibliography....14
Role of Control16
Logic of Evil18
Case Study: China....20
Case Study: India.24
Case Study: United States of America.29
International Organizations..33
Canadian Connection...38
Solutions...43
Appendix..48
Works Cited..50
Bibliography.55
Preface
Pharmaceuticals are benefits the human population has come to rely on. Through the
research and development of pharmaceuticals, countless lives have been enhanced and saved.
Therefore, it is essential to improve, preserve, and protect this industry from physical and
financial corruption. Counterfeit and substandard pharmaceuticals continue to permeate the
industry. They are fraudulently designed and produced to appear genuine, and in turn deceive
potential patients. Counterfeits pose a serious threat to the health and safety of people worldwide
since the vast majority contain the wrong potency of the active ingredient, potentially dangerous
impurities, or a complete absence of the active ingredient; while substandard medicines contain
some of the active ingredient but not enough to be completely effective.
The number of counterfeit medicines and drugs in circulation globally has been steadily
increasing since the issue was first addressed in May 1998 at the World Health Assembly (WHO,
2010). Although more attention is being directed towards this issue, it is very difficult to detect
the scale of the problem for the reason that the organizations producing counterfeits are very
sophisticated and flexible in the way they mimic products and avoid detection (WHO, 2010).
However, it is estimated that the size of the counterfeit drug market range[s] from $75 to $200
billion, which means that between eight and 15 percent of all medicines sold worldwide are
fakes (Redpath, 2012). Since the production of fake medicines and drugs is not regulated by
any type of federation or organization, producers often replace ingredients with cheaper, more
obtainable options. As a result, any counterfeit pharmaceutical that does not contain the proper
amount of ingredients has the potential to hurt, rather than heal a patient:
Drugs can kill directly, if they have heavy metal, bacterial, fungal or other
contamination. Drugs without active ingredients allow people to die from
otherwise treatable infections. And drugs with some active ingredient may
accelerate the process of natural selection [resistance] of more robust microbes to
previously effective drugs. (Robert Bate, Redpath, 2012)
Some imitation drugs contain toxic substances that contribute directly or indirectly to the death
of a patient; while others that do not contain the required amount of active ingredient lead to the
worsening of symptoms and progression of disease. Substandard drugs that contain too little of
the active ingredient can act as a type of vaccine for the malarial microbes. Instead of the
ingredient killing the microbes, the microbes can become more resistant to the ingredient with
prolonged exposure.
Concerns are also being voiced in regards to the infiltration of counterfeit
pharmaceuticals into legitimate drug distribution chains, such as hospitals and pharmacies. One
specific area of interest is the growing number of online pharmacies that seemingly offer the
same drugs as local establishments, but for a fraction of the normal price. It is extremely easy for
criminals to sell pharmaceuticals on the internet since it is the largest unregulated market in the
world (Sanofi Group, 2013). It has been proven that online pharmacies are not necessarily
reliable or safe due to the fact that 97% of American online pharmacies turned out to be illegal
operations (DeNoon, 2012). Illegal pharmacies tend to conceal their physical address, contact
information, and they rarely ask for prescriptions when selling prescription drugs. In over 50%
of cases, medicines purchased over the Internet from illegal sites that conceal their physical
address have been found to be counterfeit (WHO, 2010).
Many patients also end up suffering from the effects of counterfeit pharmaceuticals as a
result of unintentional exposure. During a shortage of medication, hospitals often turn to
secondary sources or wholesalers. The usage of secondary sources is how fake medicine and
drugs enter legitimate establishments. There is no particular type of medicine that is commonly
copied; counterfeits range from antibiotics, antimalarials and treatment for erectile dysfunction to
lifesaving cardiovascular and cancer medications. Today it is estimated that counterfeit versions
of more than 800 pharmaceutical drugs are circulating in markets globally (Redpath, 2012).
Counterfeit drugs in the black market are also a significant problem. In developing
countries, many people are forced to turn to street markets as a source for obtaining medication,
owing to the fact that legitimate health care is either too expensive or otherwise inaccessible for a
portion of the population. Buying medicine at markets instead of using clinics or hospitals poses
a risk because one in four packets of medicine sold in the street markets of developing countries
are fake (WHO, 2010). Therefore, instead of receiving the aid they need, a quarter of consumers
are being exposed to serious health complications and issues.
Not only are there health hazards associated with counterfeit pharmaceuticals, there are
serious economic consequences as well. Counterfeiters and associated criminals commandeer
multiple brands and infringe upon the rights of legitimate and established pharmaceutical
manufacturers (Pfizer, 2007). In addition, they are also responsible for taking money from
consumers and providing them with inferior products (Pfizer, 2007). Not only does counterfeit
medication have negative effects on economies, but on governments as well. Millions of tax
dollars are spent on fighting counterfeit pharmaceuticals each year. Even though the money spent
on counterfeit drugs does not go to any legitimate company or government, some money does go
to other organizations, such as terrorist groups:
Not only have groups such as the Russian mafia, Colombian drug cartels, Chinese
triads and Mexican drug gangs all become heavily involved in producing and
trafficking counterfeit drugs over the past decade, but mounting evidence also
points to the direct involvement of Hezbollah and al Qaeda. (Brian Findley,
Redpath, 2012)
Many large crime organizations are drawn to the production and distribution of counterfeit
pharmaceuticals since the profit margins are large and the relative risk of prosecution and
punishment is low.
Ultimately, not only do counterfeit pharmaceuticals pose a direct risk to consumers, they
are also a means of financially supporting organized crime and terrorist groups. There is nobody
on earth who can be considered untouched by the effects of fake drugs and medicines. Therefore,
preventing the illegal trade of counterfeit pharmaceuticals should not only be a concern, but a
priority for both governments and legitimate pharmaceutical manufacturers and distributors.
Background
Some would be inclined to think that the issues related to fake drugs and medicines
surfaced along with the development of modern-day western pharmaceuticals. In fact, the
contrary is true: the production and sales of fake and substandard medications has been a
problem ever since the beginning of the goods trade. However, history is punctuated by public
knowledge only during a supply crisis of anti-microbials (Newton, Green & Fernandez, 2012).
Knowledge of the extent of both the past and present issue is limited due to the level of difficulty
involved in counterfeit detection. In the late 1990s, counterfeit detection was fairly
straightforward. Most counterfeits were crudely made and sported different colours, spelling
errors, and were often misshapen. Unfortunately, as awareness of the problem grows and
technology improves, criminals go to greater lengths to make their product appear more
authentic. Some have even gone so far as to include drugs that mimic reduction of symptoms
such as acetaminophen, a pain reliever that can dull such malaria symptoms as pounding
headaches and fool patients into thinking theyre getting better (Marshall, 2009). Antimalarials
are commonly imitated and sold in developing countries experiencing an epidemic: 36% of
anti-malaria drugs in Southeast Asia are falsified (Sanofi Group, 2013). Since the average
annual income is low and the medication is too expensive for the majority of the population,
many desperately turn to a cheaper source of treatment. The black market is often the only
alternate source available.
The development and distribution of counterfeit medicines and drugs is not contained
only to developing countries. Some pharmaceutical markets, such as those in Brazil, China, India
and Russia, are expected to expand at a rapid rate (Redpath, 2012). Since these countries do not
have regulations in place that are as strict as those in the west, they are also expected to become
the largest producers of fake medicine (Redpath, 2012):
China is the largest manufacturer of fake drugs in the world, said Roger Bate, a
counterfeit drug expert and visiting fellow at the American Enterprise Institute,
according to the report, which notes 79 percent of counterfeit pharmaceuticals
seized in the United States by 2008 were shipped from China. (Philipp, 2014)
Finally, after years of studying Chinas role in the counterfeit pharmaceutical trade, Ronald
Noble, the secretary general of Interpol, met with Chinas assistant minister of public security,
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Zheng Shaodong in March 2006. Once he explained the threat to both public health and Chinese
legitimate pharmaceutical companies, Noble convinced Shaodong to take action (Marshall,
2009). After launching its own investigation, the Chinese Ministry of Public Security arrested
three people; two buyers and a seller. All three were convicted,
but the manufacturers of the counterfeit artesunate [anti-malaria drug] were
never found. And only one-tenth of the 240,000 blister packs were seized. The
rest disappeared inside Myanmar, where nearly half of all malaria-related deaths
in Asia occur. (Marshall, 2009)
However, the investigation was deemed worthy as the number of counterfeit artesunate in
Myanmar dropped the year after the arrests (Marshall, 2009). Although numerous counterfeits
are produced entirely in China, millions are also produced in a giant, worldwide assembly line:
The global pharma industry has complex networks that crisscross the globe. A single pill might
pass through a dozen countries during its manufacturing process, which offers many
opportunities for criminals to put fake drugs in the supply chain (Ossola, 2015). Taking into
account the smuggling aspect of production proves that the organizations producing and selling
these fake drugs are indeed sophisticated, international operations.
Even though there are a number of strict rules and regulations in place in North America,
millions of North Americans are affected by counterfeit and substandard medicines and drugs.
The market for counterfeit pharmaceuticals is booming, with sales estimated between $23
billion and $24 billion a yearclose to 8 percent of the drugs are illegally smuggled or
purchased by Americans (Philipp, 2014). In spite of the fairly recent push to eliminate fake
pharmaceuticals in North American establishments, they still continue to be introduced into
legitimate distribution chains. The main threat to the safety of the American distribution chain is
the creation of fraudulent pharmaceutical websites. As it becomes easier to design and launch a
website, illegal pharmaceutical websites are rapidly being created. Many pages sport the name of
a genuine pharmacy, and multiple feature the Canadian flag. Canada is often the chosen country
since, in reality, many drugs are lawfully available in Canada for less. A combination of
government price restrictions, lower product liability costs and a relatively lower standard of
living in Canada means the prices on branded prescription medicines can be as much as 30 to 60
percent lower than in the US (Redpath, 2012). Another threat facing the western population is
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the black market. While there are very few street markets featuring counterfeit pharmaceuticals
in the United States and Canada, many financially troubled people and drug addicts who are
receiving care for a long- term illness, such as HIV or cancer, are selling their prescription
medications on the black market for money to pay for rent, food, or alcohol and drugs to sustain
their habits. Although such people play a minor role in the counterfeit trade within America, the
authentic drugs they sell are most often shipped to countries where people often have limited
access to expensive treatment (Redpath, 2012). Since the drugs are bought from Americans at a
low price, and sold to people overseas for a high price, criminals make millions of dollars. Such
a large profit margin acts as a major incentive for many criminal organizations and gangs.
Although counterfeit pharmaceuticals are undeniably a global issue, there is no doubt that
the nations experiencing the worst effects are less developed. There are multiple underlying
reasons and factors that explain why illegal trade has flourished in developing areas. One
contributing factor is the difficulty associated with enforcing trademarks. Pharmaceutical
companies register for trademarks, then enforce them so vendors can signal the quality of the
product to potential consumers (Morris & Stevens, 2006). Companies with a trademark often
work hard to ensure that the quality of their product remains adequate, as it determines the health
of clients as well as the reputation of the name. Even if a local company has a trademark, it is
often difficult to enforce them in many developing countries because of a costly or inefficient
legal system. If it could become easier to enforce trademarks, the number of substandard and
counterfeit drugs flooding the market would drop to a more manageable number (Morris et al,
2006).
Another factor contributing to the issue is the price control of pharmaceuticals imposed
by governments. Companies are therefore not allowed to sell their products to different people at
different costs. In addition, where prices are controlled at different levels in different markets,
traders exploit these price differentials through arbitrage. Such trade (called parallel trade) may
create gaps in the supply chain which can be exploited by counterfeiters (Morris et al, 2006). As
a result, companies feel discouraged from selling goods in an area subject to price control.
Shortages of legitimate medicine often stem from such discouragement. This unsatisfied demand
in the market draws the attention of criminals and counterfeiters, who seize the opportunity to fill
the void (Morris et al, 2006).
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While shutting down the black market in developing nations proves an attractive idea, the
results of such actions could prove disastrous for thousands of people living in the areas. For
many, the black market is the only option for affordable medicine:
If you are among the millions of poor families living in Africa, Asia, South
America you may manage to get your child in to see a doctor by spending the
meagre savings you have scraped together over the last year, but there will be no
way you can afford to buy the medicines the doctor prescribes. (Redpath, 2012)
When forced to choose between risking buying counterfeit medications, and doing nothing at all,
the majority of people choose to take the risk. Therefore, if all of the street markets and other
physical sources of illegal drugs are removed, millions of people are left with no possible source
of medication to turn to:
The day the authorities eradicate the [black market for pharmaceuticals] they
will be signing our death warrant, one street trader in Lom, Togo said recently.
In Guinea, the health and public hygiene ministrys chief of staff agrees: The
authorities are having a tough time fighting [black market medicines] because
there is no alternative, said Mohamed Lamine Yansan. (Redpath, 2012)
It is apparent that there is no simple solution for the issue that affects millions of people
worldwide. Nevertheless there are certain measures that, while they will not eradicate the
problem, have the potential to help. Counterfeit pharmaceuticals will not be eliminated in a brief
period of time, but they can be reduced with the implementation of international measures and
regulations.
Expert: Professor Paul N. Newton

Issues involving counterfeit and substandard pharmaceuticals are very complex. There is
no one party solely responsible for the manufacturing and distribution of fake medicines and
drugs. In order to even begin to comprehend the issue, research and investigation must occur.
Thousands of doctors and scientists are currently conducting this research in order to better
understand the issue, and in turn, create solutions. Professor Paul N. Newton is currently the
Head of Medicine Quality Group with the Worldwide Antimalarial Resistance Network. He is
based at the Lao-Oxford-Mahosot-Wellcome Trust Research Unit in the Microbiology
Laboratory of Mahosot Hospita in Vientiane, the capital city of Laos. Laos is a Southeast Asian
country located between Vietnam and Thailand. In Vientiane, Prof. Newton and his team are
studying medicine quality epidemiology, diagnostics, and antimalarials in Asia and Africa.
Paul Newton attended Wolfson College at Oxford University in England. He trained as a
junior doctor in infectious disease and internal medicine. He then worked on and studied malaria
at the Mahidol Oxford Research Unit in Bangkok, Thailand before being transferred to Laos.
Professor Newton is currently working to create the Lao Medical Journal but still regularly
contributes to other many medical journals. He continues to collaborate with other scientists in
the field and publishes numerous medical and research papers. Professor Newton is of the
opinion that the global community is not yet substantially educated about the issue, and he is
striving to raise awareness of the problem and the risks it poses:
There are no reliable accessible databases whereby health workers or the public
can access current details of which products are being faked in a locality. It is
obviously correct that information on anti-counterfeiting strategies and the
sources of undercover intelligence should not be released, but we believe that the
information on what drug is being counterfeited, and where, should be public
knowledge. (Newton et al, 2005)
In order to spread news and findings involving counterfeit pharmaceuticals, Prof. Newton has
written many articles for magazines informing the public of the situation.
Professor Newton has conducted studies and contacted industries and governments
regarding the layer of secrecy surrounding the worldwide trade of fake drugs. Along with a
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number of other doctors and scientists, Prof. Newton highlights the critical need for openness
and honesty regarding the number of incidents that have been reported, or lack thereof. He
attributes the small number of reports to a scarcity of information:
That many pharmaceutical companies, professional organizations, and
governments, both in developed and developing countries are not releasing
warnings is manifested by the paucity of warnings relative to the scale of the
problem. The industrys history of secrecy over data about fake drugs, and claims
of a commercial motivation, goes back over 20 years. In 1982, a spokesperson for
the Association of the British Pharmaceutical Industry said, It is difficult to
declare a [fake drug] problem without damaging legitimate business. This
impression of secrecy is supported by historical statements (Newton et al, 2005).
Newtons article, The Global Threat of Counterfeit Drugs: Why Industries and the Government
Must Communicate the Dangers, continues to express the crucial role the sharing of information
plays in the fight against counterfeit drugs and medicines. He identifies apparent reasons for
secrecy and proves that they should be outweighed by the reasons to eliminate such secrecy:
many pharmaceutical companies and governments are reluctant to publicize the
problem to health staff and the public, apparently motivated by the belief that the
publicity will harm the sales of brand-name products in a fiercely competitive
business. Publicly, at least, several industry sources say the justification for
secrecy is to avoid any alarm that could prevent patients taking their genuine
medicines. We argue that this secrecy, and the subsequent lack of public health
warnings, is harming patients and that it is also not in the long-term interests of
the legitimate pharmaceutical industry. We urge a change to mandatory reporting
to governmental authorities, which should also have a legal duty to investigate,
issue appropriate public warnings, and share information across borders. (Newton
et al, 2005)
The same article ends by insisting that the governments and pharmaceutical industries both have
a responsibility to protect its citizens and consumers. The article states that the abolishment of
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counterfeit pharmaceuticals will benefit everyone, and that everyone has a crucial role in ending
the manufacturing and distribution of fake medicines and drugs.
Professor Paul N Newton is deeply involved in the fight against fake drugs, more
specifically, counterfeit antimalarials. He has published multiple articles, papers and journals
addressing the extreme impact counterfeit drugs and medicines are having on the fight against
malaria in Southeast Asian and African countries. Prof. Newton discusses the numerous
consequences of the various ingredients that make up falsified antimalarials. If a specific
counterfeit contains traces of the wrong active ingredient or impurities, they have the potential of
worsening a patients condition through a variety of side effects. A substandard medicine that
contains an amount of the active ingredient that is smaller than the effective dose has the ability
to increase the antimalarial resistance of the malaria parasite:
if the antimalarial contains low amounts of active ingredient, susceptible
parasites in the blood are killed but resistant ones multiply and then are sucked
up by mosquitoes to spread. The Greater Mekong area is now the epicentre for
resistance to the most potent drug, artemisinin, and there are concerns this could
spread to Africa, costing millions of lives. (Newton, 2014)
If a drug is comprised of relatively harmless materials and does not contain any active ingredient
whatsoever, that drug itself will not directly affect the patients condition. However, it will not
fight off the malaria parasite, and will indirectly lead to the progression of the malaria disease.
Professor Newton is of the opinion that in order to stop the worldwide flow of counterfeit
drugs and medicines, the global community must create a global policy that will recognize
producing and selling counterfeit pharmaceuticals as an international crime:
We need an international public health convention that enshrines the crime in
international law, allowing extradition, and helping countries to combat criminal
networks. It could also provide a financing mechanism for supporting the many
countries with insufficient capacity for the regulation of medicines. (Newton,
2014)
Once there is a law in place, countries will be able to combat the issue using a combination of
powers. A nation could use their own forces to reduce local and regional crime, while enlisting
12
international help to cut off the out-of-country sources. Professor Newton places great emphasis
on the fact that coordinating and acting as one global force will be our only way of putting an
end to this issue for good.
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Expert: Bibliography
Newton, Paul N.,Ryan Cockburn E. Agyarko, Dora Akunyili, and Nicholas J. White. The
Global Threat of Counterfeit Drugs: Why Industry and Governments Must Communicate the
Dangers. PLOS Medicine:. 14 Mar. 2005. Web. 25 Feb. 2016.
<http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.0020100>.
Newton, Paul N., Facundo Fernndez, Micheal Green, Krystyn Alterhall, Marleen De Veij, Peter
Vandenabeele, David Pizzanelli, Mayfong Mayxay, and Arjen Dondorp.
CHARACTERIZATION OF COUNTERFEIT ARTESUNATE ANTIMALARIAL TABLETS
FROM SOUTHEAST ASIA. Paperity.org. Nov. 2006. Web. 28 Feb. 2016.
<http://paperity.org/p/43921438/characterization-of-counterfeit-artesunate-antimalarial-tabletsfrom-southeast-asia>.
Newton, Paul N., Michael D. Green, and Facundo M. Fernndez. Impact of Poor-quality
Medicines in the developing World. Trends in Pharmacological Sciences. Elsevier In
Association With The International Union Of Pharmacology, 31 Mar. 2010. Web. 25 Feb. 2016.
<http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2845817/>.
Newton, Paul N., Patricia Tabernero, Facundo Fernndez, Micheal Green, and Philippe Guerin.
Mind the Gaps the Epidemiology of Poor-quality Anti-malarials in the Malarious World
Analysis of the WorldWide Antimalarial Resistance Network Database. Paperity.org. 2014.
Web. 28 Feb. 2016. <http://paperity.org/p/56724450/mind-the-gaps-the-epidemiology-of-poorquality-anti-malarials-in-the-malarious-world>.
Newton, Paul N. Unregulated Fake Medicines Are Threatening the Fight against Diseases like
Malaria. New Statesman. 29 Aug. 2014. Web. 28 Feb. 2016.
<http://www.newstatesman.com/world-affairs/2014/08/unregulated-fake-medicines-arethreatening-fight-against-diseases-malaria>.
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Newton, Paul N. et al.Falsified Medicines in Africa: All Talk, No Action. The Lancet Global
Health. Sept. 2014. Web. 29 Feb. 2016.
<http://www.thelancet.com/journals/langlo/article/PIIS2214-109X(14)70279-7/fulltext>.
Newton, Paul N. We Must Try a Lot Harder to Beat Fake Antimalarials. New Scientist. 8 Oct.
2014. Web. 27 Feb. 2016. <https://www.newscientist.com/article/mg22429900.300-we-must-trya-lot-harder-to-beat-fake-antimalarials/#.VEEJjPnF8YF>.
Newton, Paul N., John Renschler, Kelsey Walters, and Ramanan Laxminarayan. Estimated
Under-Five Deaths Associated with Poor-Quality Antimalarials in Sub-Saharan Africa.
Paperity.org. June 2015. Web. 28 Feb. 2016. <http://paperity.org/p/72978321/estimated-underfive-deaths-associated-with-poor-quality-antimalarials-in-sub-saharan>.
Newton, Paul N., Micheal Green, Dana Hostetler, Henry Nettey, Isabel Swamidoss, and Nicola
Ranieri. Integration of Novel Low-Cost Colorimetric, Laser Photometric, and Visual
Fluorescent Techniques for Rapid Identification of Falsified Medicines in Resource-Poor Areas:
Application to ArtemetherLumefantrine. Paperity.org. June 2015. Web. 28 Feb. 2016.
<http://paperity.org/p/73128820/integration-of-novel-low-cost-colorimetric-laser-photometricand-visual-fluorescent>.
Professor Paul Newton. Nuffield Department of Medicine. University of Oxford. Web. 27 Feb.
2016. <http://www.ndm.ox.ac.uk/principal-investigators/researcher/paul-newton>.
Professor Paul Newton. Worldwide Antimalarial Resistance Network. Manta Ray Media. Web.
28 Feb. 2016. <http://www.wwarn.org/about-us/governance-people/professor-paul-newton>.
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Role of Control
In the realm of counterfeit pharmaceuticals, the control of the trade is ultimately placed in
the hands of the criminal gangs and organizations that are funded by the trade of fake drugs.
They have access to all the profits made from any illegal sales. These organizations are often
very sophisticated and have many contacts around the world. Such a large number of contacts
and people working for them allow the leaders of the organizations to gain access to huge
quantities of information about the running of their operations, possible risks of detection, and
market opportunities. This information also allows counterfeiters to find out about new
technologies used by legitimate companies that are trying to reduce illegal reproduction. With the
knowledge, it is not difficult for counterfeiters to recreate fake medicines and drugs that are
nearly impossible to distinguish from the genuine versions. These criminal incorporations
basically hold the lives of thousands of patients in their hands.
In an ideal world, the flow of all pharmaceuticals would be managed by the legitimate
drug companies and manufacturers. Genuine companies rely on the quality of their drugs to
maintain their reputation. The effectiveness of the medicines manufactured by pharmaceutical
companies is essential to maintaining a good relationship with consumers. As a result of growing
awareness of the counterfeit pharmaceutical issue, buyers everywhere are losing faith in drug
companies and their products. This has a very negative impact on the pharmaceutical industry.
Some companies have started their own awareness campaigns in an effort to regain the trust of
consumers. Since legitimate pharmaceutical companies have such a large stake in the loyalty of
their customers, they will do everything they can to stop the counterfeiting of their products.
Already, all [pharmaceutical companies] have growing security divisions that track illegal
medicine-trafficking and gather evidence to give to law-enforcement agencies to help them take
action (Gumbel, 2009). Finally, established drug companies should be in control of their own
products; they should continue to track medicines to ensure that they reach the hands of those
who require them. Companies should have the capability of monitoring every step of
manufacturing and delivery of their goods. If such measures are implemented, it would be much
harder for illegitimate and fake pharmaceuticals to be introduced to any established supply
chains.
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It is extremely important that control of the pharmaceutical industry is placed in the

hands of those who care about the quality of the products and the well-being of consumers. If
criminals continue to have access to the drug supply chain, the health and safety of millions of
patients is at serious risk. Counterfeit medicines have the ability to affect people all over the
globe, it is apparent that the issue will not be resolved in a short period of time. It is crucial that
the entire pharmaceutical industry can work as one force to fight counterfeits.
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Logic of Evil
The majority of counterfeit operations are planned and carried out by large, sophisticated,
illegal organizations. They run like an industry; manufacturing goods and distributing them in
exchange for money. Like most industries, money is the primary goal and motivation, and the
most effective way to make money is by maximizing profit. In the case of a counterfeiting
organization, the profit margin is maximized by cheaply manufacturing poor quality products
and selling them at a price only slightly lower than their genuine counterparts. Thousands of
families living in developing and poorer countries do not have affordable access to genuine, high
quality pharmaceuticals. They are constantly searching for a cheaper medicine alternative.
Unfortunately, this alternative is usually counterfeits. Since so many people buy counterfeit
drugs, and these drugs are made using cheap methods and ingredients, criminals are able to make
millions of dollars each year. This illegal money is tax-free and criminal organizations have the
freedom to use it however they please without the fear of it being traced.
While it is relatively common knowledge that counterfeit pharmaceuticals are unreliable
and pose a serious threat to the health of patients, some people still choose to buy counterfeits
instead of their genuine counterparts. The factor that most heavily influences this decision is the
cost: genuine medicines are not affordable for most families living in developing countries, and a
number of people living in developed nations also struggle to pay the price of quality medical
treatment. As a result, many feel they have no choice but to turn to unreliable, cheaper
pharmaceuticals. Most counterfeits sold in North America are not much cheaper than the genuine
versions, but the price difference is significant enough for some financially troubled people to
take the risk. Some medicines required for the preservation of ones health may be covered by
some type of insurance provider or government-subsidized health care program, but the majority
of people relying on counterfeits have no access to any such service. Even if one does qualify for
insurance, coverage is sometimes only provided if the pharmaceutical treatment is considered
vital to the maintenance of ones wellbeing. For example, government provided health insurance
provided in Ontario, Canada pays for a wide range of services, however, it does not pay for
services that are not medically necessary (Ontario Ministry of Health and Long Term Care,
2016). Meanwhile in the majority of developing nations, healthcare is not provided by any
government or institution. Whatever healthcare is available is often extremely expensive and
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inaccessible for a large portion of the population. Educated doctors exist in small numbers, and
they are often located in large cities. In addition, the vast majority require payment that is not
feasible for most local citizens. As a result, a third of the worlds population lacks access to
essential medicines. In many low and medium-income countries, drug therapies are unaffordable
to those who need them (Pharmaceutical Journal, 2014). Therefore, people searching for
affordable treatment have no choice but to seek an alternate source of medicine. This alternative
is almost always counterfeits.
Although most people turn to counterfeits because they do not have access to quality
treatment, there are still some who deliberately choose fakes even when the legitimate treatments
are available. Individuals who have little concern about doing something illegal, or are
comfortable with risk-taking, are more likely to buy counterfeits. While others see buying
counterfeits as cheating the system. This method often appeals to people who have negative
attitudes towards big business This may be because they feel that genuine brands charge unfair
prices (Ali, 2008). These people may believe they are getting a deal, even though they are
aware that the product they are receiving is not genuine, and may not be reliable.
The trade of counterfeit pharmaceuticals is run entirely by illegal company-like
organizations. Because counterfeit pharmaceuticals damage the reputation of any establishment
involved in the pharmaceutical industry, there has been no known legitimate corporation
involvement in any illegal counterfeiting operations. The government is also harmed by the trade
of illegal drugs and medicines. It takes money, time and resources for government organizations
to battle counterfeits. They also lose out on potential tax revenues. In addition to governments
and genuine pharmaceutical companies, many international organizations such as the UN and
Interpol have conducted studies and launched operations with the sole purpose of fighting the
rising number of counterfeit drug organizations. Other than efforts made to stop the illegal trade,
there is no known interaction between the criminal organizations and any legal establishment.
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Case Study: China

China, officially known as the Peoples Republic of China (or PRC), is located in East
Asia. It is the worlds second largest country by land area, and is the most populous country in
the world, with a total population of over 1.38 billion. The capital city of China is Beijing. It is
the third most populous city in the world, home to more than 21 150 000 people. China is
currently a sovereign state governed by the Xi Jinping, the head of the Communist Party of
China and Chairman of the Central Military Commission.
Government provided healthcare in China is fairly extensive; 90% of emergency and
inpatient services are provided by the public health services, there are also a number of provided
treatments recently implemented by the government, as the quality of government provided
healthcare is on the rise: 17 national pilot cities and 37 provincial pilot cities have been
organized. Experience has been accumulated in innovation of the system, with mechanisms
tested (WHO Western Pacific Region, 2016). Thanks to the healthcare reform and
advancements in Chinese healthcare technologies, the Communist Party has announced its plans
to create a healthy China by 2020. One of the main goals of this program is to provide
treatment and healthcare access to all Chinese people. The government plans to do this by
revising its policies regarding agriculture, nutrition and social marketing (Wikipedia, 2016).
Presently, the most common cause of mortality in China is non-communicable diseases such as
cancer, cardiovascular disease, diabetes mellitus and chronic lung disease, with over 85% of
mortalities caused by such illnesses (WHO Western Pacific Region). The average life expectancy
in China is currently 74 years for males and 77 years for females.
Unfortunately, when it comes to public pharmaceutical access in China, the government
is in the midst of a controversy that has placed the health of many patients in jeopardy:
The government wants to develop the domestic pharmaceutical industry and has
used drug pricing to cross-subsidize public hospitals. Yet the government also
aims to control drug spending through price caps and profit-margin regulations to
guarantee access even for poor patients. The resulting system has distorted market
incentives, increased consumers costs, and financially rewarded inappropriate
prescribing, thus undermining public health. (Sun et al, 2008)
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Not only is the government responsible for putting patients at risk, the majority of Chinese
pharmaceutical companies focus on a competitive sales price rather than the quality of the
product, on average, research and development (R&D) spending accounts for only two percent
of sales revenue [of Chinese pharmaceutical companies], which is far lower than the 1418
percent of leading global pharmaceutical companies (Sun et al, 2008). The government has tried
to remedy the situation by promoting manufacturing practices that increase quality (Sun et al,
2008). However, the focus on developing new regulations has taken over most of the
governments resources needed to physically tackle the problem:
the countrys complicated and still developing regulatory environment has
stymied efforts at tackling the problem, which infuriates Chinese consumers, who
also express anger at what they see as the high price of legitimate medicine.
(Kang Lim, 2013)
The governments efforts have been effective, however inconvenient for the Chinese people. The
number of prosecutions for producing and selling fake medicines have been steadily rising since
2011. However, it is becoming increasingly difficult for officials to detain members of the illegal
trade because of the increasingly complex nature of the supply chains used by manufacturers
(Henshaw, 2013). Unfortunately since a very large portion of counterfeits produced in China are
illegally smuggled into other countries, the majority of problems involving Chinese counterfeit
drugs occur outside of Chinese territory.
Chinas dangerous manufacturing practices have put not only patients at risk, but Chinas
worldwide economic presence as well. In 1967 Mao Zedong, head of the Chinese Communist
Party at the time, created a team made up of the top medical researchers and developers in the
country. Their goal was to find a cure for malaria. Against all odds, the team successfully
developed an indigenous drug within ten years. It was called artemisinin and it proved to be
extremely effective. After keeping the discovery a secret for over four decades and eradicating
malaria within its borders, China decided to turn its focus to Africa. However, before the drug
could even begin to make a difference in Africa, it became a victim of Chinas own overzealous
profiteering and global drug counterfeiting (McLaughlin K, 2013). When China first started to
bring treatment to Africa, it was very independent, and in some ways suspicious:
21
China moved into Africa in its own way, with the government, state-owned
companies, and private businesses all doing deals on their own terms, avoiding
involvement with international organizations that work on health, education, and
poverty reduction. The strategy has been both vilified and lauded as an alternative
to Western-style aid, which critics say comes with too many strings attached
this also has led to cutting corners and backdoor deals that might not be in the best
interests of the most vulnerable. (McLaughlin K, 2013)
In the 1990s, China sold the patent for artemisinin to the Swiss pharmaceutical manufacturer,
Novartis. As the genuine treatment from Europe began to cross international borders into
malaria-ridden countries, it opened the African antimalarial market to Chinese counterfeits.
China has since gained a reputation for low quality and ineffective products. Consumers all over
Africa are wary of buying medical treatment that have passed through, or were made in China.
This has crippled the Chinese medical societys reputation. Experts all over the country are
worried that the damage caused by the counterfeits will undercut the countrys great medical
innovation (McLaughlin K, 2013). This is especially unfortunate since it is discouraging
African people and governments from accepting any aid at all from China: The deadliest
problem remains counterfeiting and fakes, risking lives and threatening to kill Chinas potential
for real medical aid in Africa (McLaughlin K, 2013).
In addition to damaging and hindering attempts made to better the malaria epidemic in
southeast Asia and Africa, Chinese counterfeit pharmaceuticals are supporting existing crime
rings and organizations within China and the surrounding areas:
annual profits the U.N. estimates the [East Asia and Pacific]region makes from
trafficking fake pharmaceutical products to Southeast Asia and Africa, is close to
what the international body estimates criminals made from illegal narcotics.
(Henshaw, 2013)
Therefore, many large crime organizations are drawn to the trade of counterfeits, and since the
majority are produced in China, it is fairly easy for Chinese organizations to distribute these
counterfeits and make a large profit while doing it. Such organizations have become very large
and far-reaching, with contacts and members worldwide.
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Because they [the criminal gangs] know each other, theyre very difficult to
infiltrate. They have established networks in the various countries. Theyre able to
exchange and distribute the product. And that makes it very difficult for us to
counter, he [John Newton] said (McGivering, 2007).
International crime rings fueled by Chinese-made counterfeits pose a serious physical and
financial threat to multiple consumers across the globe.
Even though the majority of counterfeit pharmaceuticals made in China are not directly
affecting Chinese patients, they are posing a major threat to the health and safety of consumers
worldwide. Counterfeit drugs are financially supporting criminal organizations operating around
the world, as well as damaging Chinas product and healthcare reputation. Both of these factors
lead to nations in dire need of help refusing genuine products and treatments from China, while
consumers that, knowingly or otherwise, purchase fake Chinese drugs are constantly being put at
risk. While destroying Chinas counterfeit pharmaceutical manufacturers would be an incredible
accomplishment in the fight against counterfeit drugs, it cannot be done without the cooperation
of Chinese and international governments and their people.
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Case Study: India

India, officially called the Republic of India, is located in South Asia. Bordered by
Pakistan, China, Burma-Myanmar, Nepal, Bhutan, Bangladesh, and the Indian Ocean, India is
the seventh largest country by area in the world. Home to over 1.2 billion people, India is the
second most populous country in the world. The capital city New Delhi alone is home to 25
million people. Today, India is governed by President Pranab Mukherjee, head of the Indian
National Congress.
Currently, the majority of Indian people seek private healthcare when it is needed. India
is among the lowest countries in terms of government spending on public healthcare, but
conversely ranks among the top twenty in the world when it comes to private spending.
However, there is unwariness when it comes to the private sector as many believe private doctors
will run unneeded tests and diagnostics for the sole reason of getting more money out of every
patient (Sengupta & Nundy, 2005). Despite this, an overwhelming number of Indian people are
turning to private medical facilities rather than government-run hospitals and clinics. This is
understandable given the current state of most government facilities: owing to many years of
neglect, lower-level public healthcare facilities often suffer from a variety of problems, including
worker absenteeism and dual public-private practice, low demand for their use, and shortages of
supplies and staff (Luthra, 2012). Most doctors working in such facilities see as many as 100
patients a day. In order to see a doctor in a reasonable amount of time, patients often resign to
paying bribes. Bribes are also expected if any patient wishes to bypass the queue to receive
treatment, clean bedding, and quality food. In addition to these unsanitary and unsafe
surroundings, many public facilities do not have the means to perform a number of standard tests
or provide medicines, so patients are forced to seek treatment from a private provider (Sengupta
et al, 2005).
In 2012, President Mukherjee pledged to provide universal health care for all Indian
people. He planned to increase GDP spending from 1.0% to 2.5% by 2017. The ultimate goal of
the plan is for all people to have access to medical treatment without the fear of a financial
struggle. The coverage provided by the government will only apply to required treatment. In
order for this goal to be achieved by 2017, the country requires a strong, efficient, well-run
health system; a system for financing health services; access to essential medicines and
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technologies; and a sufficient capacity of well-trained, motivated health workers (United

Nations in India, 2016). Money must not only be put aside for public healthcare, but invested
wisely in the right areas.
India is currently facing a number of issues when it comes to the pharmaceutical industry.
One issue in particular is the limited access to new medications. It often takes a very long time
for new medicines developed elsewhere to make it into Indian markets: Ten years after being
launched in the U.S. or elsewhere, almost one quarter of new medicines were still not available
in India (Graham, 2014).When new medicines eventually become available, they are
accompanied almost immediately by a flood of counterfeits. As a result, India has a reputation
for being unable to provide patents for pharmaceuticals. A patent is designed to protect a new
pharmaceutical by preventing anyone but the company with the patent from making or selling
any versions of that particular pharmaceutical. This gives the company with the patent a
monopoly. In India, patents for drugs are not weaker, but much harder to get:
Indias law sets a higher bar for protection than in some other countries, limiting
the ability of companies to get patents for new versions of drugs whose active
ingredients were previously known unless they can show significant therapeutic
benefit. (Anand, 2015)
These two reasons combined make India an unappealing place to introduce new medicines;
innovative drug-makers are reluctant to sell their medicines there [India]. Investors are also
unlikely to put their capital at risk in Indian drug companies that seek to discover new
medicines (Graham, 2014). Many of the worlds leading pharmaceutical companies have
stopped selling their drugs in the Indian market because they have not been able to get a patent.
As a result, numerous generic drug manufacturers have been built to supply a large part of the
Indian pharmaceutical market. These unaffiliated drug manufacturers have made it extremely
difficult to monitor the number and quality of drugs made throughout the country, and has
therefore lead to a country riddled with counterfeits.
India is the second largest manufacturer of counterfeit pharmaceuticals, behind China.
The Indian government is aware of this problem, but they refuse to acknowledge the
overwhelming scale of the issue. In a recent estimate, the government claimed that counterfeit
pharmaceuticals only make up 0.4% of the market. Meanwhile, independent studies estimate that
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the real percentage actually ranges from 12 to 25%. In order to combat the problem, the health
ministry has offered a cash reward of $55,000 to anyone with information about the illegal
counterfeit trade. There were also a number of raids conducted in 2013 that led to multiple
convictions and a large quantity of counterfeits being seized by the authorities (Partnership for
Fake Medicines India, 2016). However, these raids will not be enough to deter counterfeiters. In
India, there are huge profits to be made, and there is little risk as convictions are infrequent and
penalties are not severe. The fight in India is also very unfair. There are hundreds of thousands of
people involved in the counterfeit drug trade while the people trying to combat the problem find
themselves overwhelmingly outnumbered. Unless this changes, the future of consumer health
looks bleak:
Even with the apparent need, Indias Central Drugs Standard Control
Organization, the countrys drug regulator, has a staff of 323, about 2% of the size
of the FDA, and expansion is not in the plans. Unless serious steps are taken to
improve the quality of the Indian drug supply, the global spread of unsafe
pharmaceuticals will persist and the countrys substandard drug trade will
continue to represent a huge public health threat that extends far beyond the
subcontinent. (CSIP, 2014)
While the government is making an effort to combat the problem, the situation has only gotten
worse since the reward was announced and the raids were conducted: the technology available to
counterfeiters has improved, and the number of illegal operations is increasing exponentially.
Counterfeit drugs are not only affecting those who purchase them, but they are finding their way
into hospitals and pharmacies around the country.
The state of Jammu and Kashmir is located in northern India, mostly situated in the
Himalayan Mountains. It is also home to the beautiful Kashmir valley, which has come under
extreme scrutiny by its population since its hospitals began to administer counterfeit and
dangerous drugs to its patients. In early 2013, the Drug Control Department of Jammu and
Kashmir ran tests on an antibiotic that was supplied to multiple hospitals throughout the region.
The drug tested was Maximizen, an antibiotic originally made by the company Affy Parenterals
and distributed by the Jammu-based company Lifeline Pharmaceutical Traders and Surgicals.
26
The results of the tests revealed that there were absolutely no active ingredients found in the
drugs. However, Affy Parenterals claimed that it had been wrongly involved in the case:
We have never signed any contract or supplied any pharmaceutical products to
any government hospital in Jammu and Kashmir, an official of the firm said. The
company further said it manufactured the brand for retail sale and not for hospital
supply as mentioned in the report. (Ganai, 2013)
It was therefore determined that the drugs given to patients at the hospital were counterfeits that
had infiltrated the supply chain.
Just after the results of the Maximizen tests were revealed, it was discovered that
hospitals in the region continued to administer another drug called Curesef after it failed drug
tests in 2011 and 2012. Once the people of the Kashmir valley were made aware of this
information, they were both horrified and outraged, taking to the streets to protest:
Hundreds of protesters, comprising civil society members, doctors, traders and the
Valley-based chemistsbrought Srinagars commercial hub Lal Chowk to a
standstill by carrying out a large processionWe demand a judicial probe into
the recent state laboratory reports confirming that spurious and fake drugs were
administered in government hospitals. Those involved in purchase and selling of
these drugs should be sacked immediately and should face the law, said Shakeel
Qalander, a senior member of the Valleys known civil society group. (Ashiq,
2013)
People throughout the region were suspicious of everything that had to do with medical
treatment in both hospitals and medical retail locations:
One trusts nothing in Kashmir these days. If a committee of senior doctors
appointed by the government can purchase fake drugs what stops retail drug shops
from also selling spurious medicines, Gowhar Ahmad, 28, a government
employee, said. (Ians, 2013)
27
The ever-growing environment of suspicion and fear not only made life very hard for
consumers all over Kashmir, but for those trying to provide medical treatment to patients as well.
Patients were putting themselves at risk since they were reluctant to receive any treatment,
pharmaceutical or otherwise.
While counterfeits can harm people directly, they can also create an element of fear when
it comes to all pharmaceutical treatments. This puts patients at risk because they are more likely
to be wary of, and refuse legitimate medicines that are necessary to maintain ones health.
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Case Study: United States of America

The United States of America, commonly called the United States, is located in
North America, bordered by Canada, Mexico, the Atlantic Ocean, and the Pacific Ocean. Home
to over 320 million people, the United States is the third-largest country by total area, and the
third-most populous country in the world. It is a federal republic headed by the current president
Barack Obama. The federal government is located in the nations capital city, Washington DC.
The large majority of health care facilities are privately owned in the United States, with
only 21% of all hospitals owned by the government. Since the people of the United States have
to pay out of pocket every time they seek medical treatment from a private facility, most
Americans buy health insurance from an insurance provider. Health insurance allows people to
seek medical care without having to pay out of pocket. Instead, people with insurance pay an
annual fee that covers various forms of treatment. The covered treatments vary with the
insurance provider and the type of coverage purchased. Health insurance can be bought with a
private provider, or it can be provided by an employer for a fee. Qualifying Americans may also
be eligible for a social welfare program funded by the government. According to the World
Health Organization, the United States spends more on its health care system than any other
country in the world; 17.2% of its GDP. However despite the amount of money being spent, the
quality of American health care is relatively poor when compared with other first-world
countries.
Despite having the most expensive health care system, the United States ranks last
overall among 11 industrialized countries on measures of health system quality,
efficiency, access to care, equity, and healthy lives. (The Commonwealth Fund,
2014)
This ranking is mostly due to the lack of any universal health care system that is present in
almost all of the other countries involved in the study. As a result of this, millions of Americans
are without any sort of health insurance or coverage, as it is simply unaffordable to a portion of
the population.
29
However, efforts have been made to eliminate this issue. In March 2010, President
Barack Obama implemented the Affordable Care Act. This act was designed to improve the
quality of healthcare in the United States and make it more accessible for every American
citizen:
The Affordable Care Acts main focus is on providing more Americans with
access to affordable health insurance, improving the quality of health care and
health insurance, regulating the health insurance industry, and reducing health
care spending in the US. The law contains hundreds of different provisions that
address different aspects of the healthcare crisis in the US. (Obamacare, 2016)
There is an open enrollment annually that allows Americans to obtain health coverage through
the health insurance market. In addition, American people making 400% under the federal
poverty level (FPL) (Obamacare, 2016) are qualified to apply for government subsidies to put
towards health insurance and health care in general. Qualified people are also granted premium
tax credits and reduced out-of-pocket costs. With the help of the Affordable Care Act, millions of
Americans have received healthcare and treatment that would have been previously inaccessible.
The United States is home to one of the worlds most competitive pharmaceutical
markets. Unlike many other countries, the United States has no price limitations on drugs in the
market. Manufacturers are free to sell their pharmaceuticals at whatever price they think people
will pay. They can also alter their selling prices based on market demand (GLOBALHealthPR,
2015). Because of this, the market is extremely competitive and pharmaceuticals are often
expensive. The high price makes genuine pharmaceutical treatment virtually inaccessible for a
number of American people, which in turn creates a market for counterfeits.
Even though some of the worst counterfeit pharmaceutical situations occur in developing
or poorer countries, the United States is definitely not immune to the threat of fake drugs and
medicines. It is estimated that less than one percent of drugs sold in the United States are
counterfeit, but that tiny percentage still has the ability to place thousands of people at risk. Since
the majority of American people know that buying a bag of unlabeled pills from a road stand in
30
the middle of the city is unwise, criminals have found a new way to make their counterfeit drugs
sound legitimate and trustworthy:
A popular way many customers get cheaper prescription drugs is to try to order
them online from Canada. There are numerous small storefronts across the
country with names like Canada Drugs or Canada Direct, advertising inexpensive
drugs, but there are questions over whether the medicines being sold are pure, or
even from Canada. (Mcniff, 2015)
Since most prescription drugs are actually cheaper to buy in Canada, the illegal organizations
running these stores use this fact to justify their low prices for supposedly genuine medicines.
However when a number of these stores were investigated, and their products tested, it became
clear that the pharmaceuticals were not of an approved quality, and they were not from Canada.
To combat this problem, there is now a Verified Internet Pharmacy Practice Sights (VIPPS) seal
that is present only on legitimate pharmaceutical distributions websites and online pharmacies.
Consumers are also told to look for a physical address on the website to insure it exists.
Since the Prescription Drug Marketing Act of 1987, drugs that are manufactured or
exported out of the United States cannot be reimported unless it is by the manufacturer of that
drug. This allows all pharmaceutical distribution channels, including wholesalers, hospitals and
pharmacies, to be monitored and regulated by the Food and Drug Administration (McLaughlin J,
2015). In addition to this act, the FDA Safety and Innovation Act, introduced in 2012, enables the
FDA to take new measures to regulate prescription drugs and combat the spread of counterfeits
throughout the country (McLaughlin J, 2015). They were granted new powers such as the ability
to administratively detain drugs believed to be adulterated or misbranded, and the authority to
destroy certain adulterated, misbranded, or counterfeit drugs offered for import (Sklamberg,
2014). Even with these new powers granted to the FDA, counterfeits still find their way into the
hands and bodies of thousands of Americans.
Millions of people in the United States rely on pharmaceuticals as a way of treating
cancer. In early 2012, thousands of cancer patients found themselves at risk not because of the
disease itself, but because of counterfeit medicines. Fake versions of the cancer drug Avastin,
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manufactured by the company Genentech, a division of Roche Holding AG, were found in the
United States. Avastin is a type of cancer treatment that impedes the growth of blood vessels
needed by cancerous tumors. It is an expensive drug that is administered directly into a vein and
is used to treat colon and lung cancers. The counterfeit versions found in the United States were
tested and were found to contain no active ingredient whatsoever. It is still unclear how many
doses of the counterfeit drug made it into the country, and whether or not a significant number of
patients were directly affected by it. However, the genuine manufacturer made it clear that the
counterfeits were dangerous and not to be used.
The situation could have been prevented if doctors, nurses and other medical staff were
made more aware of how counterfeits and genuine pharmaceutical treatments appear physically.
The counterfeit doses of Avastin were clearly marked differently than their genuine counterparts
normally sold in the United States:
In the U.S., boxes of authentic Avastin are labeled in English, say they were made
by Genentech and have a six-digit lot number with no letters. The counterfeit
boxes had writing in French, identified Roche as the manufacturer, and had lot
numbers on the boxes or vials starting with B86017, B6011 or B6010. (Rockoff &
Weaver, 2012)
Experts hope that this issue has inspired people to educate themselves about the medicine they
think they will be receiving in order to have the ability to spot any inconsistencies and report any
suspicions. There is also hope that this highly publicized situation will make Americans more
aware of the fact that the availability of counterfeit pharmaceuticals is not only limited to
developing countries, and that caution is always necessary when it comes to dealing with
unfamiliar drugs and medicines.
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International Organizations
The threats counterfeit pharmaceuticals pose to the overall health of society is undeniably
a global issue. Since there is no way to eliminate them without global cooperation, numerous
international programs and organizations have been created for the sole reason of stopping the
spread of counterfeit drugs and medicines.
One of these international efforts is the International Medical Products AntiCounterfeiting Taskforce, also known as IMPACT. This partnership, created by the World Health
Organization in 2006, is comprised of all of the major anti-counterfeiting powers. This includes
enforcement agencies, international organizations, non-governmental organizations, drug and
regulatory authorities, and pharmaceutical manufacturers around the globe. The main goal of
IMPACT is to forge and strengthen international ties as well as to build coordinated networks
across and between countries in order to halt the production, trading and selling of fake
medicines around the globe (IMPACT, 2016). In order to do this, the taskforce has focused on
five main areas of interest: legislative and regulatory infrastructure, regulatory implementation,
enforcement, technology, and risk communication.
Each area of interest has been assigned its own working group. Working groups
investigate situations regarding their specific area around the globe. The group then creates a
proposal that outlines the best courses of action in tackling the problem. These proposals are
submitted to the Planning Group of the taskforce, then distributed to participating organizations
and authorities. Proposals are meant to act as a guideline, recommendation of action and a
summary of the problems at hand regarding each area of interest.
The Legislative and Regulatory Infrastructure Working Group is currently headed by Dr.
Konstantin Keller, who works in the Federal Ministry of Health in Germany. This working group
is aiming to have countries worldwide recognize the manufacturing and distributing of
counterfeit pharmaceuticals as a major crime. It is believed that if this crime is more recognized
and punishable by the law, it will act to empower local authorities and inspire them to better fight
this illegal activity. To do this, the working group aims to observe and survey existing national
and international legislative requirements, find and assess any gaps in legislation and regulations
33
having to do with the making, distribution, importation, and exportation of any pharmaceutical
product. They also work to develop model legislations and practices and inspire law-makers to
adopt these models and the new legislation in general (IMPACT, 2016).
The Regulatory Implementation Working Group is working to ensure that medical
professionals, people working in the pharmaceutical industry, and the general public are provided
with the resources and skills needed to identify counterfeit products. The Chair of the working
group is currently Dr. Ilisa Bernstein, the Director of Pharmacy Affairs at the Food and Drug
Administration in the United States. The goals of the Regulatory Implementation Working Group
include promoting secure ways of exchanging information and alerts, providing guidance in the
way of improving and running quality control laboratories, and building collaboration and
networking between the pharmaceutical industries and local and international authorities
(IMPACT, 2016).
The Enforcement Working Group is focused on building communication and
collaboration between global law enforcement authorities in order to create a more effective
international power:
By working with INTERPOL, World Customs Organization and an international
network of enforcement officers such as the Permanent Forum on International
Pharmaceutical Crime, IMPACT aims at improving contact and mutual
understanding among enforcement officials of different countries in order to
improve coordination of operations and rapid exchange of information. (IMPACT,
2016)
The two Co-Chairs of the working group are Ms. Aline Planon from INTERPOL, and Mr. Eric
McIntosh of the Australian Therapeutic Goods Administration. This group is currently working
to increase the amount of resources available to enforcement authorities, promote international
exchanges of information and collaboration, and developing projects aimed at strengthening the
ties between regulatory and enforcement officers.
The Technology Working Group is led by Mr. Eduardo Pisani, Director General of the
International Federation of Pharmaceutical Manufacturers and Associations. It is working to
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improve technologies that will make counterfeit products easier to distinguish from their genuine
versions. The working group plans to accomplish this by assessing new technologies that have
the ability to aid in the fight against counterfeits and spreading information about the positives
and negatives of technologies being used or being considered for use (IMPACT, 2016).
The final group, the Communications Working Group, is constantly working to ensure
that the public is aware of any possible threats to their safety and health, and that they are
provided with only the truth. In other words, the Communications Working Group believes that
In communicating the key messages, policy makers need to promote responsible media
reporting by encouraging and assisting in information provision to ensure accurate and nonsensational coverage (IMPACT, 2016). The chair of this group is Mr. Ton Hoek, Secretary
General of the International Pharmaceutical Federation. The working group aims to develop
consistent, agreed messages, ensure IMPACTs presence at all appropriate national and
international events, and communicate all risks and information about counterfeit
pharmaceuticals to healthcare professionals and the general public (IMPACT, 2016).
Together, these five working groups act to ensure that the international community is
aware of the threats posed by counterfeit pharmaceuticals, and that it is also equipped with the
knowledge and resources necessary to fight them. It is impertinent that the world recognizes this
issue as a global one, and that there will be no way to stop it without international collaboration.
Another international force fighting to stop the trade of counterfeit pharmaceuticals is
INTERPOL. The international police has so far launched six operations, five of which each
targeted a specific geographical region while the sixth targeted the internet and online
pharmacies. The three most successful operations were Operation Storm (Southeastern Asia),
Operation Mamba (Eastern Africa), and Operation Pangea (the internet). Although Operation
Mamba has not been active since 2012, Storm and Pangea continue to target and shut down
illegal organizations.
Operation Storm was first launched by INTERPOL in 2008. The participating countries
were Cambodia, China, Laos, Indonesia, Myanmar, Singapore, Thailand, and Vietnam. The
operation lasted five months and resulted in 186 raids, twenty seven arrests, and more than
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sixteen million tablets seized by authorities. After the end of the operation, Cambodia decided to
create and train a taskforce dedicated to identifying and confiscating counterfeit pharmaceuticals
from pharmacies across the country (INTERPOL, 2016). Since 2008, Operation Storm has
launched four more programs, each for a different length of time. The number of participating
countries has grown from eight in 2008 to thirteen in 2015. The number of raids, arrests, and
seizures has also increased since the operations launch. In addition to yielding physical results,
Operation Storm also succeeds at raising awareness and shedding light on new information
regarding pharmaceutical crime:
Operation Storm VI demonstrated the sophistication and determination of
criminal groups engaged in pharmaceutical crime, creating dangers to public
health and the safety of the population, said Aline Planon, Head of
INTERPOLs Global Health and Safety unit. There is therefore a need for
increased cooperation and information sharing on crimes related to falsified and
illicit medical products being manufactured, transported and sold in the Asian
region, added Ms Planon. (INTERPOL News, 2015)
INTERPOL is expected to continue to conduct training seminars and operations in the Southeast
Asian region through Operation Storm. Southeast Asia is the area most severely affected by
counterfeit pharmaceuticals and any relief and training efforts such as Operation Storm have a
significant effect on every person who relies on pharmaceutical treatment to maintain a state of
health.
Operation Pangea is the most well-known pharmaceutical crime operation run by
INTERPOL. It was also launched in 2008 with ten participating countries and has run every year
since then. The operation has grown significantly since its first year, as there are now 115
participating countries and 236 participating agencies. It works to eliminate illegal websites
selling counterfeit drugs and medicines through a variety of different methods:
Operation Pangea is an international week of action tackling the online sale of
counterfeit and illicit medicines and highlighting the dangers of buying medicines
online. Coordinated by INTERPOL, the annual operation brings together customs,
health regulators, national police and the private sector from countries around the
world. Activities target the three principal components used by illegal websites to
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conduct their trade the Internet Service Provider (ISP), payment systems and the
delivery service. (INTERPOL, 2016)
Operation Pangea has proven to be very effective as the latest phase resulted in a record 20.7
million fake and illicit medicines seized, 550 requests for illicit pharmaceuticals removed from
the internet, 429 arrests, and over 2,410 websites shut down. The estimated value of all products
seized was 81 million US dollars (INTERPOL, 2016). There is no doubt that the results of the
operation are worthy of all the efforts and resources dedicated to making it possible.
The illegal trade of counterfeit pharmaceuticals and the threats they pose to patients
around the world is an issue that will not be resolved by a single country, or even a select group
of nations. The only way to effectively combat the problem is through global cooperation and
international unity. It is for this reason that international organizations such as the ones run by the
World Health Organization and INTERPOL are so important to the efforts. They offer the
opportunity for worldwide collaboration and sharing of information. A truly global solution to
what is indisputably a global issue.
Canadian Connection
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Canada is the second-largest country in the world by land area. However, the land is
sparsely populated as Canada only has a population of 35 million, over four fifths of which live
near the southern border of the country. Canada is bordered by the United States to the south and
northwest, and the Pacific, Atlantic, and Arctic oceans. The country is currently governed by
Prime Minister Justin Trudeau, leader of the Liberal Party. The main facilities of the federal
government are located in the capital city, Ottawa. Canada is divided into ten provinces and three
territories, each with its own provincial/territorial government.
Canadians benefit from access to medical treatment that is primarily provided by the
government. Health coverage consists of a group of health insurance plans created and
administered by the provincial governments, but abides by federal guidelines. Such coverage
provides Canadians with preventative care and medical treatments from primary care physicians
as well as access to hospitals, dental surgery and additional medical services (Canadian
Healthcare.org, 2007). The system is regulated by the Canada Health Act. This act provides
conditions that must be met for provinces to receive healthcare funding. The Canada Health Act
is based on five principles that must exist within every healthcare system. The five principles are:
Public Administration, Comprehensiveness, Universality, Portability, and Accessibility. Canadas
healthcare system has been criticized by many, but it is also credited for providing Canada with
one of the highest life expectancy rates in the world: 80 years for men, and 84 years for women.
Over half of required pharmaceutical treatment is provided by the healthcare sector of the
government. However, the restrictions on covered medical treatment varies from province to
province, and many Canadians still end up paying out-of-pocket for prescription medicines and
drugs. In fact, almost 23 billion dollars was spent on pharmaceuticals by Canadians in 2012-13
(CMA, 2016). The Canadian Medical Association, along with other Canadian health
organizations believe that the government should develop a reliable system to cover prescription
drug requirements:
No Canadian should be deprived of medically necessary drugs because of
inability to pay. The CMA recommends that governments, in consultation with the
life and health insurance industry and the public, establish a program of
comprehensive prescription drug coverage. This would be administered through
reimbursement of provincial, territorial and private prescription drug plans to
38
ensure that all Canadians have access to medically necessary therapies. (CMA,
2016)
In addition to the lack of clarity surrounding pharmaceutical treatment coverage, Canada also
suffers from the effects of drug shortages. Every country in the world is affected by drug
shortages, but Canada more so because the vast majority of the prescription drugs Canadians
consume are made outside of the country. Most of the drugs involved in shortages in Canada are
generic drugs that are older, and have patents that may be expired (Canadian Drug Shortages,
2016). There are multiple factors that could contribute to the drug shortages, but very few people
know the true reason behind every shortage, and those who know rarely come forward to talk
about it. Some reasons for shortages are believed to be: a lack of materials required to make a
particular drug, a sudden growth in demand, breakdowns within production lines, and
pharmacists refusing to stock generic drugs because the profit margin is too small. Others also
believe that Canadas lack of a drug manufacturing industry makes it subject to shortages
(Canadian Drug Shortages, 2016). Unfortunately, drug shortages can make hospitals, pharmacies
and patients desperate for a specific medicine, and can therefore lead to people turning to a
secondary source for a supply of pharmaceuticals. This change in the drug supply chain is how
counterfeits end up in legitimate healthcare facilities.
The counterfeit drug situation in Canada is not as bad as it is in other parts of the world,
but there is no doubt that Canada is still affected by the issue. The majority of counterfeit drugs
purchased in Canada come from illegal online pharmacies, but fake drugs marketed as Viagra
and the heart medication Norvasc are being sold by peddlers on the streets and in flea markets. A
very small percentage of counterfeit and sub-standard drugs have also been found in legitimate
pharmacies across the country.
Public knowledge of the problem in Canada was not widespread until the late 2000s. The
Canadian government finally decided to meet with each other and speak on the issue in 2007,
where plans were made to create an awareness campaign and to increase the enforcement of anticounterfeiting laws:
The department [Health Canada] has promised to release a draft of its anticounterfeit strategy this fall. It should include expanding enforcement around
suspected counterfeit cases, strengthening "partnerships" with the RCMP and
39
other law-enforcement agencies, educating the public about the dangers of bogus
health products and overhauling the Food and Drugs Act to make it more able to
deal with counterfeiting, said Paul Duchesne, a department spokesman. (The
National Post, 2007)
Since most pharmaceutical treatments are either provided by the government, or else relatively
affordable for most Canadians, the market for counterfeits is fairly small when compared to
markets in developing countries. But counterfeits will always be available to Canadians through
the World Wide Web, and an extremely small number of physical suppliers.
Counterfeit pharmaceuticals are not only limited to consumers in Canada. There are
Canadian companies who take advantage of Canadas reputation for selling prescription drugs at
lower prices. In 2015, a Winnipeg-based company named Canada Drugs was charged with
smuggling, conspiracy, and money laundering. Canada Drugs was an online pharmacy with a
physical facility located in Winnipeg. The company also had affiliates in both the United
Kingdom and Barbados. After millions of dollars worth of counterfeit pharmaceuticals were
delivered to doctors in the United States, a prosecutor with the U.S District Court in Montana
filed charges against the company:
An online Canadian pharmacy sold $78 million worth of unapproved, mislabeled
and, in two cases, counterfeit cancer drugs to doctors across the United States
over three yearsThe medicines named in the criminal indictment are mainly
clinical drugs that treat cancer or the effects of chemotherapy. Nearly all of the
drugs are legal in the U.S. when sold by FDA-approved manufacturers and
marketers. (Volz, 2015)
Although the company has only been charged within the past year, it had been under
investigation by the federal prosecutors since 2012:
Canada Drugs first came to the attention of federal prosecutors in Montana after
the company bought the customer list and inventory of Belgrade-based
pharmaceutical company called Montana Healthcare Solutions in 2010. The
acquisition of that and other companies already selling drugs to U.S. physicians
40
allowed Canada Drugs to begin its direct sales of cancer drugs to doctors,
prosecutors said. (Volz, 2015)
However, it is said that the company continued to sell product until 2012, when the FDA began
an investigation into the selling of counterfeit versions of the cancer drug Avastin. The profits of
the operation were sent back to Canada Drugs through its affiliate in Barbados, while the
inventory was purchased by the companys affiliate in the United Kingdom, then shipped to
customers in the United States. Some of the doses of foreign Avastin were proven to be
counterfeit. Canada Drugs also sold a Turkish version of Avastin called Altuzan, which is not
approved in the US. In addition to selling non-approved drugs to doctors in the United States,
the company falsified customs documents by putting artificially low values on packages in
hopes of avoiding scrutiny of shipments by U.S. customs officials (Palmer, 2015).
This operation could not have been successful without someone inside the United States
vouching for the reliability of Canada Drugs. This someone was a seemingly-legitimate company
called PharmacyChecker. PharmacyChecker is a self-proclaimed independent verifier of internet
pharmacies across the United States. However, it was soon found out that this company was not
genuine, and that it catered exclusively to Canada Drugs:
Indicted along with Canada Drugs and several of its principals is Dr. Ram
Kamath, the Director of Pharmacy Policy and International Verifications for
PharmacyChecker. Allegedly, Dr. Kamath certified Canada Drugs as safe and
legitimate after accepting money and a paid trip from Canada Drugs to Barbados
despite being aware that the company was using an illegal and unsafe drug supply
chain (and having just hid some of Canada Drugs counterfeit drugs in his
garage). (Horton, 2015)
This entire operation is an example of how people are able to use Canadas trustworthy
reputation to their advantage. Companies such as Canada Drugs have the ability to harm not only
patients, but legitimate pharmaceutical companies and international relationships. It is critical
that not only all internet pharmacies be verified, but that they are being verified by legitimate,
government-approved associations. It is vital that the populations of developed countries
understand that they are not immune to the effects of counterfeit pharmaceuticals. Not only must
41
the general public be made aware of the dangers of using online pharmacies, but all healthcare
professionals must be educated in order to keep everyone safe.
42
Solutions
The worldwide threat of counterfeit pharmaceuticals is extremely difficult to eliminate.
They have proven to be very dangerous and pose risks to not only patients, but to the legitimate
industry and national economies. Since the situation varies so much in different regions of the
world, it is impossible to create an all-encompassing, global enforcement program that will
eliminate all counterfeit medicines and drugs. The international community must instead focus
on much more specific and individual approaches for the circumstances of every affected
country. Global organizations such as IMPACT and INTERPOLs anti-pharmaceutical crime
operations have mastered an effective way of combatting the issue. They are operating
internationally by developing programs to effectively eradicate counterfeit drugs in legitimate
supply chains as well as on the black market in specific countries and regions. Since the
programs are custom to the situation in each affected area, they are much more successful.
In addition to improving enforcement of the law, most of the solutions currently being
developed involve the creation of new technology. More specifically, technology that can be used
to identify genuine pharmaceuticals and would be impossible for counterfeiters to reproduce.
One new technology that has been incorporated into a part of the pharmaceutical industry is
Radio-Frequency Identification, or RFID. Products tagged with RFID can be tracked and
identified using electromagnetic fields. RFID tag readers pick up these fields using radio waves,
and therefore the tags do not have to be visible. This makes it possible for tags to be completely
embedded in a product or animal. The pharmaceutical industry has used RFID to track drugs and
medicines as they make their way through the supply chain, to consumers. Since each RFID tag
also identifies the product it is embedded in, one specific dose of any tagged medicine can be
authenticated using any RFID reader:
RFID makes it easier to ensure that drugs are authentic, and it also creates an
electronic pedigree--a record of the chain of custody from the point of
manufacture to the point of dispensing. Electronic pedigrees will improve patient
safety and protect the public health by allowing wholesalers and retailers to
rapidly identify, quarantine, and report suspected counterfeit drugs and conduct
efficient, targeted recalls. (FDA, 2009)
43
During 2009 and into the early 2010s, RFID was looking like it was going to be the revolution
of drug packaging that would ensure the destruction of all counterfeits in the supply chains and
the safety of patients worldwide.
Unfortunately, a lot has changed since 2009, and RFID has begun to undergo both
speculation and criticism. It has not taken off in the pharmaceutical industry to the extent that
was predicted. As RFID was beginning to become a part of pharmaceutical packaging, it was
realized that not only would the manufacturers have to purchase and integrate the new
technology, but the wholesalers, and dispensers would all have to be equipped with technology to
accompany RFID:
To make RFID useful to this supply chain, all of the companies listed above
would need to deploy, not only RFID readers but also new software that works in
a sequence of events that differs from those followed today with barcodes. That
might not be a big deal if you were starting from scratch, or if you introduced a
new reason to read identifiers with RFID that doesnt exist with barcodes, but in
use cases that make use of barcodes today, adding in RFID causes more trouble
than it addresses. (Rodgers, 2014)
Today, it has for the most part been decided that the cost of replacing the already-used barcode
system with a more expensive version that provides real-time results for the entire industry is not
worth it. While RFID is still being used to create E-Pedigrees for more expensive and restricted
drugs, it is not being used to identify or track any generic or more common pharmaceutical
products.
While the success of RFID in the pharmaceutical industry might have proved
disappointing for some, there are still many new and innovative technologies being developed,
all with a potential future in the fight against counterfeiting. One of these is the use of Raman
Spectroscopy in pharmaceuticals. Raman Spectroscopy is a technique used to identify the
molecular makeup of solid, liquid and gaseous samples. It uses the study of interaction between
matter and electromagnetic waves. Raman Spectroscopy involves monochromatic light
interacting with a substance, the light reemitted by the substance is always slightly different than
the light originally emitted. The frequency of the reemitted light is unique to each molecular
44
compound, therefore creating a type of fingerprint that can be used to identify specific
compounds.
Raman Spectroscopy is also extremely effective at picking up and recording very slight
differentiations within a compound. This makes it ideal for ensuring the quality of
pharmaceutical products. Raman Spectroscopy is able to identify all of the different ingredients
in a drug, along with the concentration of each:
The high spatial resolution of a Raman microscope makes it particularly useful for
identifying small particulates such as contamination within formulated products
Raman spectra are rich in information about the molecular nature of a sample. In
particular the Raman spectra of crystalline pharmaceutical compounds typically
contain many well-resolved features and are highly characteristic of a given
material. (Baldwin & Webster, 2005)
In addition to the high levels of accuracy and detail provided by the Raman spectra, samples of
pharmaceuticals require very little preparation before being exposed to Raman Spectroscopy and
very little of the sample is needed to provide accurate results. Since Raman Spectroscopy
techniques have a very high analytical versatility, many types and states of samples can be
observed such as semi-solids, suspensions, and solutions, along with varying levels of colour,
and transparency. This means that Raman Spectroscopy is non-invasive and can be used to
analyze a number of finished forms such as creams, syrups, powders, tablets, and heterogeneous
suspensions (Amrit et al, 2015). Although Raman Spectroscopy is not a simple concept,
technological advancements have made it possible for people without a background in chemistry
to use it to identify drug composition. Handheld devices using Raman Spectroscopy are available
for people to use in the field without extensive training or orientation. This has enabled
organizations to discover the exact contents of any pharmaceutical product physically available
to them. They do not have to confiscate any material, or take anything back to labs. Once the
handheld device has been exposed to the genuine version of the pharmaceutical product, it has
developed a very specific fingerprint that shows what that product is supposed to contain. The
result of this is that the authenticity of any drug or medicine can be almost immediately
determined by comparing the fingerprints of the genuine product to those of the sample taken.
45
While the technology required to use Raman Spectroscopy as a method of drug authentication is
not widely available, and often expensive, it is becoming more accessible through the
development of smaller handheld devices that are capable of running tests in a matter of seconds.
Even though Raman Spectroscopy is not the widespread method of the present, there is no doubt
that it is an effective method that should be made more available to all authorities combatting the
illegal trading of counterfeits.
Although technology is undeniably a critical part of the prevention of counterfeiting, the
most effective way of protecting consumers in developed countries will ultimately be the raising
of public awareness and the encouragement of buying pharmaceuticals from trustworthy,
legitimate sources. Pharmacists, doctors, and other healthcare professionals/staff must also be
trained to recognize counterfeit products in order to stop the infiltration of supply chains.
In developing countries, the road to a solution will be longer and undeniably more
complicated. It will involve the government implementing a legal system that recognizes
counterfeiting as a crime, and punishes those involved accordingly. Authorities responsible for
enforcing the law will also have to be provided with the information and resources required to
carry out investigations. Areas where the circumstances are most desperate must be identified so
that available information and resources can be concentrated to act in an area where they can be
most effective. While public awareness is equally as important in countries where the situation is
more dire, collaboration between different sectors of the healthcare world are almost equally as
important. Governments should not only create awareness among the community about the
menace but also foster development of strategies to promote intersectoral coordination between
different public and private stakeholders (Shrivastava et al, 2014). Through such collaboration,
the security of all parts of the drug supply chain can be ensured. Public awareness can also prove
to be a complicated task. Many families in rural areas have no access to sources of information
regarding the safety of unauthorized drugs. It is these same families who are unable to afford
legitimate medicines and turn to cheaper versions without being fully aware of the risks. If the
government were to completely eradicate black market pharmaceuticals, they would be leaving
thousands of people without any source of pharmaceutical treatments at all. Situations such as
these must be solved one step at a time; before the sole source of medicine for some people is
destroyed, those people must be guaranteed some reliable and affordable pharmaceutical
46
treatment. This can often only be achieved by altering a governments healthcare program to
include universal health coverage.
Through a multitude of studies, observations, and operations, numerous organizations
across the globe have all agreed that the only way to eliminate the threats that counterfeit
pharmaceuticals pose to consumers worldwide is by international collaboration. Resources and
information must be shared throughout a network of forces if any real progress is to be made.
Prior disagreements and controversies must be discarded for the sake of the health and safety of
the global population, and only when the true scale of the threat is realized will this occur.
47
Appendix
Article 1: an illustration of the impacts of counterfeit pharmaceuticals worldwide
Article 2: an illustration of the drug supply chain and possible points of infiltration
48
Article 3: a comparison of genuine and counterfeit pharmaceutical packaging
Article 4: a comparison of genuine and counterfeit pharmaceuticals
Article 5: a public awareness campaign poster by IMPACT
49
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Counterfeit Pharmaceuticals and Their Effect on Consumers Worldwide