Terry J. Allen |802.229.0303
Vermont & NYC| tallen@igc.org

COUNTERFEIT PHARMACEUTICALS ARE flooding hospitals, Web sites, pharmacies and street markets around the world. Visibly indistinguishable from life-saving medicine, the pharmafakes plague the developing world, affecting millions of people and undermining confidence in public health.

Counterfeit drug sales will reach $ 75 billion globally in 2010, a more than 90 percent increase from 2005, according to the Center for Medicines in the Public Interest. Some pharmafakes enter the United States hidden in plain sight inside the 70,000 packages of legitimate medicines that pass through JFK and Miami airports alone, each day.

But the developing world is where most fakes are manufactured, most victims live and where up to half the drugs in some countries are bogus.

Feeding on desperate need and feasting off fabulous profits, narcotics and arms traffickers are embracing this global industry. Lack of international agreement, uncoordinated enforcement and low penalties ensure that drug counterfeiters enjoy that most traditional of capitalist draws: high profit with low risk.

Part of the blame goes to a "war on terror" that has sucked up international policing efforts and "is making it harder to look at the fake drug trade," Dora Akunyili told In These Times. In 2001 Akunyili, a pharamcologist in her 50s, accepted what has been called "the most dangerous job in Nigeria," heading the country's National Agency for Food and Drug Administration and Control (NAFDAC).

Until Akunyili's reforms took hold, Nigeria was the epicenter of the pharmafake pandemic. In 2003, when surgeons there administered adrenaline to restart the hearts of anesthetized children, a useless counterfeit left four dead on the operating table. A painkiller made from toxic ethylene glycol killed more than 100 Nigerian children. A Nigerian newspaper reported that "80 percent of cases of kidney failure in the country are linked to the intake of fake drugs."

The counterfeit medicine trade "is mass murder but not with guns," says Akunyili. "It is solely profit motivated, but the money the counterfeit drug makers make can be plowed into evil. It is also a form of terrorism against public health as well as an act of economic sabotage."

Akunyili came by her commitment the hard way: Fake insulin killed her diabetic sister. As agency head, she found that only 20 percent of the country 's drugs were legitimate and vowed to put the pharmafake manufacturers and dealers out of business. She raided warehouses, seized tons of pharmafakes, burned them in the street and ordered the arrest of notorious traffickers who had operated with impunity for decades.

The price that traffickers put on her head was evidence of the campaign's efficacy. One day as she rode to work, assassins opened fire on her car. One bullet pierced her headwrap and grazed her skull. Another shot killed a bystander. Akunyiyi sent her children abroad and accelerated her campaign. She faced down threats, blackmail and a corrupt legal system that let off major dealers despite ironclad cases, one of which included a boastful confession.

Factories in China and India are the main source of a counterfeit trade that is growing faster than cholera in a warm petri dish. China's new capitalists, skilled in knocking off Gucci and Nike, are turning to Lipitor and Norvasc. Some fakes are far cheaper that the real drug, some are not even a bargain, and some, especially a new wave of Russian knockoffs, are as effective as expensive originals. Consumers, however, have no way to know if their pill is crushed chalk or toxic waste; if they bought amusingly impotent Viagra or an antibiotic, an antiretroviral or malarial drug with doses too low to work, but high enough to encourage disease-resistant strains that circle the globe inside unknowing travelers.

"Bacteria don't need visas," says Akunyili, who argues that even if human compassion fails to inspire Western officials to tackle the problem, enlightened self-interest should. Health experts point out that 2 percent of TB cases are "extremely drug resistant," and view with alarm a new South African TB strain, resistant to all antibiotics, that killed 52 of the 53 people infected.

The counterfeits also create resistance to public health campaigns. After watching pharmafakes fail or kill, people may reject polio vaccinations, anti-malaria drugs, and HIV/AIDS treatments and preventions. Experts worry that fake Tamiflu available on the internet may undermine efforts to contain bird flu if it evolves into a serious human threat. The pharmafake trade also lends credence to the view that all Western medical initiatives are profit-driven fraud and bolsters quacks promoting such home-grown tragedies as treating AIDS with garlic and beetroot instead of antiretrovirals, as did Manto Tshabalala-Msimang, South Africa's criminally deluded minister of health.

As the trafficking grows, pharmaceutical corporations have failed to attack the problem with the zeal they unleash to maintain high prices, protect patents and create demand for new lifestyle drugs. Next month, I'll examine that seemingly strange reticence.


Corporate Secrecy Spreads Pharmafakes (Part 2)

millions could be eased by issuing public health warnings from available information that is currently kept confidential by the pharmaceutical industry" reporter Robert Cockburn told the Global Forum on Pharmaceutical Anti-Counterfeiting.

The secrecy concerns the flood of pharmafakes that may comprise 50 percent of drugs in some developing countries and 10 percent worldwide. Some experts put the annual toll at 1 million dead and rising.

But the real numbers are hidden.

"Why does the [pharmaceutical] industry continue to shy away from developing the infrastructure needed to assess the size of the global problem?" asks PharmaManufacturing.com editor Agnes Shanley in a 2005 editorial. "The answer is simple: fears of bad publicity and impacts on stock prices."

The building blocks of that infrastructure exist in the separate and secret data banks each of the big pharmaceutical companies maintains on fakes and counterfeiting operations. But opening those records, they contend, threatens security and could create panic. Underlying that caution is a stone-cold business decision. According to Nicholas White, a Thailand-based doctor who has seen the casualties firsthand, "Their marketing people must have made the calculations that they are likely to make more profits by not publicizing than by publicizing."

Indeed, although most people know about Gucci knock-offs, few -- even those whose lives depend on it -- know that purportedly life-saving drugs may be useless at best, poison at worst. While BigPharma conceals "trade secrets," impoverished people buy bogus diabetes, malaria and HIV treatments; hospitals drip contaminants into the veins of the desperately ill.

With counterfeits reaping an estimated $ 35 billion a year, drug manufacturers would seem to have a straightforward financial interest in exposing and stopping the illicit trade. But that interest clashes with another business consideration: reluctance to damage brand reputation and drive patients to rivals. "There is a serious conflict of interest within the pharmaceutical industry, concerned that making information on specific counterfeits public will reduce public confidence in the product and reduce sales," Paul Newton, et al., wrote in U.K. medical journal The Lancet.

The number of times that companies have issued public alerts "is tiny compared with the racket's size," says Cockburn.

The closest thing to a centralized database is the Pharmaceutical Security Institute, a members-only trade group supported by almost $ 640,000 in dues and assessments (2004). PSI analyst Peter York describes the nonprofit as "central intelligence for counterfeit, diversion, and theft." When PSI learns that a member companies' drug has been faked, it strategizes with the affected manufacturer. Only when the company is not a member does PSI contact authorities directly. So if Novartis or GlaxoSmithKline or any other of PSI's 23 paying members decides to delay reporting or to hush up a problem, PSI does not inform government agencies, law enforcement, or the public. York says he knows of no instance when a PSI member company withheld information from law enforcement "regarding a confirmed counterfeit medicine."

PSI investigators' "main concern is to progress the information," said an industry insider who requested anonymity because he was not authorized to talk to media. "And if by releasing information you would hurt the investigation, investigators may recommend [keeping quiet]. PSI urges companies to work with local law enforcement, and it's not its place to recommend action."

Loath to share proprietary or commercially sensitive information, large companies typically rely on in-house security departments staffed by private investigators bound by confidentiality agreements.

"By using covert means, the industry avoids any assessment of its efforts and is accountable to no one," writes Cockburn.

Pfizer spokesperson Bryant Haskins says his company always reports counterfeiting to authorities and promotes tagging all packaging with radiofrequency identification (RFID). "There is a huge illicit distribution network, especially in the third world, and companies can't know everyone who claims to be distributing their products," says Shanley, adding that "track and trace" technologies make it harder to mimic packaging and easier to identify fakes.

While such technical fixes raise the cost to counterfeiters -- who will inevitably counterfeit the anti-counterfeiting devices -- they are largely irrelevant in the developing world, which faces the least oversight and the greatest need. The FDA, which begins mandating limited RFID this December, admits "there is no single 'magic bullet' technology."

Rather than depending on technical fixes, pharmaceutical companies must reduce the price of life-saving drugs to impoverished populations and cooperate with researchers, international law enforcement and each other to create an independent, open database, and to support a centralized, rapid-response system of mandatory reporting and public alerts.