Dirty Business

It is tainted by money laundering, can be done by simply setting up a website and  billions of dollars are at stake. That’s what  the fake drugs or  pharmaceutical counterfeiting business is all about. For those who crusade against it, it is being called the Wild West of the drugs industry and governments are being accused of turning a blind eye. With TT’s markets opening  up with free trade, the illicit business could prove a minefield for government. Francis Burnett, Managing Director, OECS Pharmaceutical Procurement, told participants at a two-day conference on “Pharmaceutical Counterfeiting” at the Hilton Trinidad that fake drugs have existed since 1983 and have grown into a multi-billion dollar industry. The conference was hosted by  CARIRI.

“At the moment it is like the Wild West, anybody can start up a website on the Internet and they can get away with it,” said Burnett. Out of the US$100 billion pharmaceutical industry, he said annual sales of fake drugs accounted for US$16 billion — seven per cent of drugs sold world wide. He said the trade was usually an underground one and nearby Mexico was a major transhipment point. In Cambodia, 60 per cent of the 133 vendors sold fake drugs while in Russia 3.6 percent of the drugs were fake. This spells trouble for developing countries like Trinidad and Tobago and other Caribbean territories, as the fake drugs can be dumped on an unsuspecting market. Some of the ingredients include wheat flour, yellow paint, floor wax, glass, cement, talcum powder and fungus.

Although fake drugs are already on our local market, he warned consumers to exercise caution when purchasing medicine. While anti-retroviral drugs were also being faked, antibiotics was the most faked drug. Although cheap they can be deadly. Burnett said the thriving trade was driven by several factors including new trade agreements, global arrangements, inequitable wealth and income and variable social and economic developments. John Allan, Director of Investigations at Carratu International, UK warned about the impact of the Internet on the trade in counterfeit pharmaceuticals: in the absence of legislation. Allan said unscrupulous website owners use the Internet for money laundering. “Once we investigate some spurious websites, what we find are addresses and bank accounts going all around the world, just to mask the true identity.”

He predicted that it will take a catastrophe involving counterfeit drugs to force governments to take action. “This is sadly the way things are, it is always after the events that they talk about bringing controls and legislation.” Allan said three areas are affected by counterfeited pharmaceuticals: the finances of a company,  because counterfeit drugs impacts on sales; the reputation of the company suffers and the health of consumers suffers. “Many, many people suffer and die of using substandard or counterfeit pharmaceuticals.” Allan said the Internet is the ideal marketplace. “If I was a counterfeiter I would not try and infiltrate any regular distribution network. I would set up some websites, that’s the easiest way to get rid of my counterfeit stuff, very easy and highly anonymous.”

His attempts to get legislation to deal with this aspect of the counterfeit trade have not been successful. Allan said “nobody is particularly bothered, and the response from my Government is ‘someone is looking at it’.” The counterfeit business is lucrative, he said,  with sellers “easily” setting up a process for collecting revenue. Burnett felt a level playing field might work toward decreasing the trade. He further said that the trade was done via “rings” and usually involved the selling of other products like  illegal drugs and perfumes. Burnett said high price differentials, weak penal sanctions, demand exceeding supply and lack of enforcement of legislation sustained the trade.

Burnett warned consumers to buy drugs from legitimate sources and to be extremely observant, since some of the packaging on fake drugs was even better than those on authentic drugs. He pointed out too that in 1998 US Customs seized 2,145 parcels of fake drugs and a year later in 1999, 9,725 parcels were seized. Allan recommended the implementing of a monitoring mechanism for activities on the Internet such as a registration process where pharmacies join to get validation so the public will know if it is reputable. Allan said the counterfeit pharmaceutical market must be monitored.