November 17th, 2006 01:29 EST
Counterfeit Drugs Seen as Growing Problem
New York -- Counterfeit goods threaten security, economic growth and public safety worldwide, U.S. and private industry officials warn. Of increasing concern, they say, is the flood of counterfeit medicines into the marketplace.
Trade in counterfeit and fake goods, officially referred to as intellectual property piracy, "negatively impacts our society through the loss of profits, jobs, revenue and poses risks to the community in both consumer safety through the sale of unsafe products and through the presence of criminal organizations responsible for the sale and distribution of those products," says Salvatore Delesandro, deputy special agent in charge of the New York office of the U.S. Immigration and Customs Enforcement agency.
"Fakes" most often bring to mind designer handbags and brand-name foot apparel, but modern-day pirates counterfeit everything from life-saving drugs to cell phone batteries, from auto parts to computers, many posing serious threats to the health and safety of buyers.
Counterfeiting costs $500 billion globally and an estimated $300 billion in the United States annually, Delesandro said November 14 at a seminar organized by the U.S. Chamber of Commerce to call attention to the problem. (See related article.)
But the cost of counterfeiting goes beyond money, says John Theriault, vice president of global security for Pfizer Pharmaceutical Company, the largest drug manufacturer in the world.
"The very first issue with counterfeit drugs is that they pose a serious threat to patient health and safety. It is a very serious health issue," Theriault said. In the beginning, the most counterfeited medicines were the erectile dysfunction drug Viagra and malaria medicines, but now other drugs such as heart and cancer medicines, cholesterol-lowering products, flu vaccines and contraceptives are being counterfeited.
"The explosion of counterfeit medicines into the global marketplace … is a problem that is a lot bigger and a lot more expensive than people realize," Theriault said. It is not a problem unique to Pfizer, but one that affects every ethical, legitimate, research-based pharmaceutical company.
The situation became so serious that in 1998, Pfizer set up its own security unit to begin tracing and documenting the scope of the problem.
Counterfeit medicine is a "shadow industry" that has grown up because there is so much money involved, Theriault said. "We have found counterfeit versions of Pfizer medicine in 65 countries."
The World Health Organization estimates global sales of counterfeit medicines at $35 billion to $40 billion a year. The U.S. Food and Drug Administration (FDA) estimates that counterfeits make up more than 10 percent of the global medicines market and are present in both industrialized and developing countries, with up to 25 percent of the medicines consumed in poor countries being fake.
In 2004, about 10.5 million units of counterfeit Pfizer products were seized globally and the company expects that about 10 million units will be seized this year.
SERIOUS THREAT TO PATIENTS' LIVES
The problem ranges from drugs that contain the same active pharmaceutical ingredients but are produced in unregulated conditions to those containing lethal ingredients. Many are produced by criminals with sophisticated equipment capable of duplicating near-perfect copies of the authentic packaging.
The problem has been "exacerbated in the extreme by the Internet," Theriault added. The anonymity and massive communication capability offered by the Internet is a prescription for disaster where medicines are concerned, he said.
"We've had reports of counterfeit products with high levels of heavy metal, with arsenic, with nickel," Theriault said. "We've seen counterfeit product coming out of Latin America that actually contained boric acid, highway paint and floor polish. The product looked very nice. … The contents were disastrous."
Citing another example, he said Canadian officials are investigating five deaths that may be related to fake Norvasc, a blood pressure medication.
Pfizer's strategy, Theriault said, "is to try to convince governments to deal harshly with people who are engaged in manufacturing and selling counterfeit goods. We work with regulatory agencies and local law enforcement."
"This is a trade issue among countries, it is an issue that developing countries have as much interest in as mature markets," he said. "Private industry has a huge stake in this, but private industry cannot solve the problem alone.
"Arrests show that we are making progress and governments are beginning to take this problem a little more seriously. In 2004, there were 369 arrests, about the same in 2005 and over 400 so far in 2006 worldwide," he said.
China and India are often referred to as the epicenters of the counterfeit medicine trade, but the biggest counterfeit case in the United States was in 2003, when more than 18 million tablets of the cholesterol-lowering drug Lipitor, the world's largest-selling medicine, were recalled from the U.S. market. Those tablets were produced in Costa Rica, Theriault said.
For more information, see Protecting Intellectual Property Rights.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)