1 November 2017Americas

Counterfeit drugs: protecting lives and IP

Most readers will know the effect that counterfeits can have on both a product and the wider public. Countless lawsuits will mention the “irreparable harm” caused to the company and to consumers who purchase said products. In the pharmaceutical industry in particular, these injuries can be fatal.

The true scale of the problem is not exactly known, as counterfeit drugs by their very nature are designed to be difficult to detect.

The World Health Organisation (WHO) stated as part of a factsheet in January 2016 that substandard, spurious, falsely labelled, falsified and counterfeit (SSFFC) medical products affect every nation in the world. It added that many countries and the media frequently report successful operations against manufacturers of SSFFC medical products.

The factsheet said that some reports “refer to large scale manufacturing and others to small back street operations. With the availability of tableting machines, ovens, specialist equipment, ingredients and packaging materials, clandestine manufacturing facilities are quick and easy to assemble,” it read.

According to Interpol more than a million people die from counterfeit drugs each year. The most common counterfeits are said to be
anti-allergy drugs, which cause 200,000 deaths a year alone.

Interpol further estimates that that as many as 30% of drugs available in Latin America are fake.

The International Institute of Research Against Counterfeit Medicines (IRACM) states on its website that according to expert estimates, fake drug trafficking now represents about 10% of the world market and has become the most lucrative source of financing for organised crime.

IRACM, along with the authorities, have placed a lot of time and money into trying to inform and educate as many people as possible about the risks (health, economic, legal) related to the counterfeiting of medicines and health products.

A growing sector

Specifically in South America, statistics compiled by the Americas Market Intelligence show the pharmaceutical industry is set to grow by
12% this year, making it one of the fastest
growing sectors.

With this comes further room for the counterfeit drug market to grow alongside it. This can be particularly seen in Brazil where, according to the Brazilian Food and Drug Agency (ANVISA), 20% of all the drugs sold in the country are counterfeit, but recently Brazil has taken more serious steps to tackle the issue.

“Brazil enacted Law 13.410 in 2016, which amended Law 11.903/2009 in order to implement a database to aid the traceability of drugs in Brazil and establish a national system of drugs control,” explains Eduardo Hallak, partner at Licks Attorneys.

He explains that the country is currently in a “testing phase” of a new regulation to combat
the issue.

Pharmaceutical companies have until May 2018 to enter at least three of their products into a pilot scheme of the database, ahead of new legislation which is expected to come.

“Once that pilot period elapses, ANVISA will analyse the results within the next eight months. After that, new regulations are expected to be issued, reaching the overall industry.

“The new system establishes a centralised database that will receive input from all the companies on the circulation of the drugs around the country, hosted by the federal government,” says Hallak.

He adds it is expected that the database will be able to provide more effective controls and information so that authorities and private companies are able to deal with counterfeit drugs in the market.

Easy access

Where do people get fake drugs? As with many aspects of counterfeiting, the internet has meant that access to such products is easier for the consumer, some of the time without their knowledge.

The US Food and Drug Administration (FDA) has issued frequent warnings to consumers only to buy pharmaceuticals online from a licensed pharmacy, otherwise there is a high risk they
can be fake.

WHO statistics further stated that up to 50% of drugs available online are counterfeit. In July 2016, Colombian officials announced the arrest of ten alleged members of a counterfeit drug ring, believed to have generated over $10 million through the sale of fake drugs.

Medicines in the haul included medications for HIV, contraceptives and drugs used to treat brain tumours.

The network would sell the contraband medicines to local pharmacies via Facebook or online marketplaces, according to authorities.

In September this year, Venezuelan media reported that the local authorities had arrested five people for involvement in an illegal medicine and surgical equipment network near a large local hospital.

The five suspects were accused of selling a range of products from their illegal “travelling pharmacy”, including stitches, gauzes and syringes. The group had medicines such as painkillers, blood pressure medication, antibiotics and hydration solutions for patients.

Due to the high quality of the counterfeits, the drugs and equipment in question had been sold through the national healthcare system. In other words, the products have proved themselves able to infiltrate genuine hospitals.

Counterfeit techniques are wide-ranging and simple, yet largely effective. For example, genuine medicines have been placed in counterfeit packaging to extend the expiry date or to commit a fraud against various government programmes.

While they may be high-quality enough to bypass investigators, the products will fail to treat serious medical issues, possibly eventually leading to an avoidable death.

Combat strategies

The US-based not for profit organisation, Pharmaceutical Security Institute (PSI), released the 2016 figures on the combating of pharmaceutical goods.

South America ranks third on the list of regions reporting incidents involving fake pharmaceuticals; last year there were 416 incidents logged.

The report stated that it is “important to note that the regions that are more frequently linked to incidents are not necessarily those with weak enforcement and inspection programmes”.

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