Posted: 07 May. 2014 7 min. read

Counterfeit drugs: An increasing problem requiring a global solution

According to Forbes, annual global sales of counterfeit drugs were estimated to have reached approximately $200 billion in 2011.

The World Health Organization (WHO) defines counterfeit drugs as “a medicine which is deliberately and fraudulently mislabelled with respect to identity and/or source”. The WHO estimates that one per cent of all medicines available in the developed world are likely to be counterfeit. This figure rises to 10 per cent globally, although in some developing countries they estimate one third of medicines are counterfeit. According to WHO, counterfeiting can apply to;

  • both branded and generic products
  • products with the correct ingredients, wrong ingredients, without any active ingredients or with insufficient active ingredients
  • products with fake packaging.

Simply put, counterfeit drugs are copies or imitations of original drugs which are manufactured and marketed without authority or right, with а view to deceive or defraud.

The use of counterfeit drugs has caused a number of issues for healthcare providers and the pharmaceutical industry. Counterfeits often lack correct amounts of active ingredient exposing patients to less effective treatments and wasting healthcare funding. Cheap ‘bulking agents’ such as chalk, sugar and flour are used to replace active ingredients which can cause adverse reactions that prove fatal. In January 2013, over 100 patients lost their lives at the Pakistan Institute of Cardiology Hospital after being administered counterfeit anti-hypertensive medicines.

For the genuine manufacturer, the presence of counterfeit drugs can lead to reputational damage, litigation, accusations of fraud, and product withdrawals. In 2008, the US pharmaceutical manufacturer Baxter Healthcare faced numerous lawsuits on account of negligence, product liability and fraud due to issues surrounding heparin, the blooding thinning agent. Batches of the active ingredient imported from China were found to contain oversulfated chrondroitin sulfate, a compound that mimics heparin but is cheaper and easier to obtain. Contaminated heparin was found in a total of 12 countries and is believed to have resulted in over 200 deaths; 149 in the US and 68 elsewhere.

There is also evidence that for infectious diseases such as malaria, administration of sub-standard counterfeit drugs has promoted the parasites' resistance to medical treatment. Without the appropriate dose of active ingredient, the parasite may be able to develop immunity to the drug, similar to drug resistant bacteria. Long-term this is could result in current malaria treatments becoming ineffective.

Counterfeiting is a global problem made easier by the internet – a convenient and unregulated platform to market and sell these products. Attempts to stifle availability are on-going and focus on a number of key elements:

  • introduction of appropriate and stringent anti-counterfeit legislation 
  • presence of national drug regulatory authorities
  • proper enforcement of drug legislation
  • monitoring, regulation and control of the importation and exportation of medicines
  • effective supply chain management - the ability to trace medicines (active ingredients) from original manufacture/source to final product. 

Indeed, the pharmaceutical industry is using supply chain management to try and combat counterfeiting, including the use of: Radio Frequency Identification (RFID), supply chain consolidation and tracking, digital serial number identification chromatography, chemical fingerprints and holographic labels. Together these initiatives are enabling pharmaceutical companies to reduce the risk of counterfeit products reaching their markets.

Regulators, such as the FDA and EMA and MHRA, have all developed anti-counterfeiting strategies. While these agencies have made progress, the stakes are high and a true solution to drug counterfeiting will require a coordinated global approach that engages all stakeholders in the healthcare value chain. Manufacturers, healthcare providers, patients, payers and regulatory authorities all have a role to play. To create a coordinated global approach significant work is needed to bridge differences in opinion, culture and capability between nations and the regulators that govern them.

Key contact

Karen Taylor

Karen Taylor

Director

Karen is the Research Director of the Centre for Health Solutions. She supports the Healthcare and Life Sciences practice by driving independent and objective business research and analysis into key industry challenges and associated solutions; generating evidence based insights and points of view on issues from pharmaceuticals and technology innovation to healthcare management and reform. Karen also produces a weekly blog on topical issues facing the healthcare and life science industries.