A Sick Crime?

Sanna Kulevska, June 17, 2013

Abstract: A big test of the limits of international cooperation is reaching a climax as the global community tries to combat the emerging war against counterfeit pharmaceuticals. What are the greatest challenges and dangers the consumers and the businesses are facing in the fast growing and potentially lethal fake trade of poison pills?

It is an ordinary day and you walk into your local pharmacy. You have gotten a prescription from your trustworthy doctor, you take your medication as any other day, and you assume that everything is just as usual. Is this still a valid assumption?
Have you ever purchased any counterfeit medicine? No, of course not.
Not that you know of.

The inconvenient truth presented to us by the United States’ Federal Bureau of Investigation is that there is no longer any certainty of the authenticity of the medicines available for sale on the drug market thanks to an increase in the counterfeiting of pharmaceuticals – the “crime of the 21st century”.

According to U.S. Trademark Law, a “counterfeit” is a spurious mark, which is identical with, or substantially indistinguishable from, a registered mark. It can also be described as something that has been made in imitation so as to be passed of fraudulently or deceptively as genuine and authentic. Companies work for years building and investing in a brand’s reputation and a brand loyalty, which inferior counterfeit products can gradually ruin. Counterfeit pharmaceuticals are an intellectual property theft that results in unfair competition for American companies; a trademark crime that accounts for an estimated $ 600 billion in global trade every year. The United States is facing the greatest economic impact as the world’s largest consumer nation. A huge number of the fake pharmaceutical brands are sold under American trademarks, which according to the Unites States Federal Trade Commission, in the United States alone, is estimated to have caused the loss of more than 750,000 jobs. On the other side, the counterfeit industries, which are often operated by terrorist organizations such as Al Qaeda and the Russian mafia, lead to an exploitation of employees enforced to work in factories for an hourly wage of $ 0.75.

Globalization has revolutionized both licit and illicit commerce. Commercial and technological innovations have reduced national trade barriers, widened transportation infrastructure, and bolstered volumes of international business. The rapid development of the Internet has increased the possibilities for the counterfeit businesses to reach consumers on a global scale, and drug purchasers are now facing a growing industry of fake drugs with profits in the counterfeit industry estimated to have doubled since 2005 and surpassed the gains made from heroin and cocaine. 76 % of the world’s counterfeit goods come from China and India, but when focusing on counterfeit pharmaceutical, Russia has appeared to be the drug counterfeiters’ paradise, since the country has little resistance from the Government and the laws and penalties for counterfeit pharmaceuticals are weak or non-existent. With its recent expansion, the European Union’s border in the east is no longer the well-controlled German border, but instead the more porous Polish border. Once the Russian counterfeit drugs cross the Polish border, they have unobstructed access to the markets in the rest of the EU, from where they can easily access the pharmacy shelves in the United States. In fact, investigations show that counterfeit Russian pharmaceuticals already have been discovered in the USA, resulting in the death of a handful American citizens.

In the USA, 10 % of the drug market consists of counterfeit pharmaceutical, while it in some developing countries can be higher than 30 %. The increasing pace is alarming and the main reason to its escalation is the practice of drug diversion, which is the principal method by which counterfeits enter the legitimate drug market. The result of this is that it is nowadays not unusual to find genuine products in counterfeit packaging and counterfeit products in genuine packaging on the shelves at the pharmacies in the USA. The replicas are so well made that not even professionals in the medical field are able to differentiate them.

Besides the devastating effects on the businesses, the counterfeit medicine can actually be harmful and lethal for us, the consumers. Counterfeit drugs are produced and packaged to look like the genuine articles. The fake products may include the correct ingredients, but they do, however, often have an incorrect dosage strength, have no active ingredient, or have phony packaging and labeling. Among the ingredients the World Customs Organization has found dangerous bacteria, acid and highly toxic substance. These counterfeit drugs are therefore poison pills that in fact kill an estimated 100,000 people worldwide every year, mostly in the poor world.

With the Internet as the third largest market for distributing counterfeit goods, the lethal drugs have taken position in the rich world too. The World Health Organization presents numbers stating that 50 % of all drugs bought online are imitations. Viagra, the drug for erectile dysfunction, tops the list of knock-offs seen by Pfizer, and has for a long time been available for purchase online for $ 1 per pill, while the price at the pharmacy is $ 15. Would the attitude towards money saving and avoidance of embarrassment be different if we knew that every other blue pill contains lead paint, acid and is potentially lethal? Would it still be worth saving $14, knowing that you may actually pay with your life? Will we think differently about it when the fake trade has now expanded to include even Tamiflu, Plavix, and Casodex, used to treat influenza, blood clots, and prostate cancer, respectively?

As a way to wage war against the underworld of counterfeiters, a bill was introduced in the USA in 2011, entitled Stop Online Piracy Act (SOPA). It would, if passed, expand the ability of U.S. law enforcement and holders of intellectual property rights to fight the counterfeiting business. It would allow the U.S. Department of Justice, as well as copyright holders, to seek court orders against websites accused of enabling or facilitating copyright infringement. Opponents of the bill stated that it could cripple the Internet through selective censorship and limiting free speech. They also raised concerns that SOPA would bypass the “safe harbor” protection that Internet Service Providers have according to the Digital Millennium Copyright Act. The Obama Administration stressed that “the important task of protecting intellectual property online must nor threaten an open and innovative Internet”, and the legislation was, however, later on withdrawn by its author Lamar Seeligson Smith (Republican).

Counterfeiting of pharmaceuticals is a global crime and to stop its rapid progress, global collaboration is needed. In the EU, the Council of Europe has labeled it “Medicrime” and drafted a Medicrime Convention, a binding international legal document for the member states to ratify, aimed to strengthen Europe’s ability to combat counterfeiting of medical products.

On October 1, 2011, the USA together with eight nations signed the Anti-Counterfeiting Trade Agreement, which is designed to help intellectual property rights by strengthen the international legal framework and deepen international cooperation to promote strong intellectual property rights enforcement practices, which will help combatting the industry of counterfeit pharmaceutical along with increased support for American jobs in innovative industries. China has not yet signed it. In a country where counterfeiting is not yet considered an international crime, the main concern lies in the fact that duplication as a phenomenon is so deeply culturally rooted, and it will need more effort than an agreement to change a whole county’s attitude towards property and ownership. In countries where fines do exist, they are too low to be noticeable. As the former Director of the National Agency for Drug Control in Nigeria expressed it: “As grievous as this crime is, which is even worse than armed robbery, the penalty is like a slap on the palm, the most ridiculous of which is a fine of $ 300. Any offender would gladly pay this fine and return to business the next day”.

Internet is global. The counterfeiting is global. The actions against it must be global as well. To combat the crime of the 21st century, we need to stand united at the battlefront, or we will continue allowing and indirectly supporting this emerging international intellectual property crime, which causes an undermining in the public trust in safety and healthcare systems, harms American prestige and reputation as well and triggers a trade imbalance, supports the exploitation of employees, ruins hard working investment and causes losses of hundreds of thousands of American jobs at the same time as it finances terrorism and threatens the right to life – by causing many people’s death every year.

Have you ever purchased any counterfeit medicine? No, of course not.
Not that you know of.

Chilling Effects Clearinghouse - www.chillingeffects.org

Chilling Effects Clearinghouse page printed from: https://www.chillingeffects.org/international/weather.cgi?WeatherID=766