Counterfeit drug market worth $200bn a year, says report

The market for counterfeit pharmaceuticals is worth $200 billion a year, beating almost everything else in the underground economy, including prostitution, human trafficking and illegal arms sales.

This is according to a report, “The risks of the online counterfeiting community”, published by online brand protection firm NetNames.

According to the report, up to 70% of all pharmaceutical drugs in developing countries are counterfeit, while up to 30% of all pharmaceutical drugs in circulation worldwide are counterfeit.

It explained that counterfeit medicines pose an extreme risk as more than 20% either have incorrect quantities of active ingredients, or contain the wrong ingredients, while around 30% contain no active ingredient at all.

“The World Health Organization estimates that a third of countries don’t have an effective agency in place to regulate pharmaceuticals. This makes drug counterfeiting difficult to detect, investigate and quantify in the developing world, although recent seizures suggest the market is expanding rapidly.”

NetNames added that counterfeit drugs primarily originate in South East Asia, where regulatory systems are “lax” and low-cost labour is “readily available”.

It added that in China and India, “the very same factories can make legitimate pills during the day and counterfeits by night”.

According to NetNames, there are up to 50,000 internet pharmacies in operation, and around 95% of the pharmacies do not comply with the laws and industry standards created to protect patients.

In addition, 90% of drugs purchased online come from a different country than the website claims.

In 2013 alone, almost 14,000 websites hosted by illegal online pharmacies were identified and shut down.

And, in 2015, Interpol’s Operation Pangea VIII seized 20.7 million illicit and counterfeit medicines. This was more than twice the amount confiscated during a similar operation in 2013.

“Any intervention by law enforcement and pharmaceutical brands has been likened to a game of ‘whack-a-mole’; websites can simply be launched more quickly than the authorities can shut them down.”

The data used in the report was obtained from a range of sources including Interpol, PwC and AmerisourceBergen.