Counterfeit drugs are a “money machine”.

Counterfeit drugs made in Asia and other emerging markets are a growing problem that’s endangering consumers’ health and chipping away at drug companies’ profits. Last year, nearly 1,700 incidents of counterfeit drugs were reported worldwide, triple the number in 2004, says the Pharmaceutical Security Institute (PSI), a group funded by drugmakers. Estimates for the size of the counterfeit drug market range from $75 billion to $200 billion a year. The market is likely much bigger because many cases are hard to detect.


And the problem is only expected to get worse. Fake drugs are a “money machine” whose sales are growing at twice the rate of legitimate pharmaceuticals, says Peter Pitts, president of the Center for Medicine in the Public Interest.

A weak economy along with rising drug prices are likely leading consumers to seek out cheaper products online or from unauthorized providers, stoking demand for counterfeit drugs, says Bryan Liang, a board member at the Partnership for Safe Medicines. More than 50% of the medicine bought from certain illegal websites have been found to be fake, according to the World Health Organization.

Scott Davis, a senior regional director in U.S. drug giant Pfizer’s global security division, believes it’s not cheaper prices that drive consumers to counterfeit medicine, but their “lack of education and awareness of the dangers.” Counterfeit medicine may include too much, too little, or none of the ingredients found in the real product, causing injury and in extreme cases, death.

While fake drugs have been around for decades, the Internet’s growth and the popularity of Pfizer’s erectile dysfunction drug Viagra in the 1990s created the “perfect storm” to fuel this underground industry, says Liang, a professor at Case Western School of Law in San Diego.

Today, drug rings in Asia, particularly in China and India, are increasingly churning out fake versions of popular name brand and generics and then selling them to consumers online or in the black market. PSI estimates that fake versions of about 800 pharmaceutical products were made last year.

Counterfeiters are now able to fake drugs so well that even experts find it hard to distinguish the copies from the real deal. And they’re able to replicate security devices such as holograms only a few months after pharmaceutical companies put these features on their packages.

“You can make more money in counterfeit drugs than heroin,” says Tom Kubic, CEO of PSI. “There’s a major financial incentive for criminals because of the low risk of detection and prosecution.”

In many countries, penalties on fake drugmakers aren’t strong enough to deter their illicit activities, says Lembit Rägo, coordinator for medicines quality and safety at the WHO. Countries including China, however, have stepped up their efforts related to detection and seizure of counterfeit drugs.

Drug makers are also becoming more vigilant. At Pfizer (PFE) , the global security team routinely gathers information about fake drugs and passes them along to authorities. The company also shares such information with its competitors, sometimes leading to raids of suspected manufacturing facilities.

Meanwhile, Abbott also devotes “considerable resources” to protecting its products, says spokesman Dirk van Eeden. “The criminals who fake medicines put our reputation and, even more importantly, patients’ lives at risk,” van Eeden notes.

Fake drugs also put pharmaceutical makers’ profits at risk by diverting consumers away from the legitimate products, Liang says. While counterfeit drugs are more common in emerging economies, they also pose a threat to consumers in developed countries, such as the U.S., who are buying medicine online. “When the patient gets away from trusted sources, that’s where I see the problem in the developed world,”

Avoid counterfeit drugs online

• Make sure the website requires a prescription.
• Confirm the site is located in the U.S.
• Check that the site is licensed by the state board of pharmacy where it’s operating.

Via USA Today