Counterfeit/Substandard

Drugs

Parallel trade,
counterfeit/substandard drugs,
ties to organized crime and
more.
Parallel Trade
 Re-importation (or parallel trade as it
is known in Europe) occurs when products
protected by patent, trademark or
copyright are first placed into
circulation on one market, then (re-)
imported into a second market without
the authorization of the original owner
of the intellectual property rights
(IPRs).
Example:
 11% of South Africa’s population suffers from the HIV/AIDS virus and
treatment rates average approximately $110 per month creating
extenuating circumstances for the victims. The government of South
Africa decided to re-import HIV/AIDS drugs in order to reduce the
burden, and thus sanctioned the practice of parallel trading in the
country.

 The problem with this decision is that by opening their markets up to

the re-importation of medicines they did not fully understand or place
effective preventative measures to prevent the flow of illicit medicines.

 It is estimated that nearly 60% of drugs pertaining to the treatment of

AIDS/HIV in S.A. are counterfeit.

 South Africa is an extreme example of how parallel trading can inhibit

the health and well-being of a large portion of the nation. The market
is flooded with substandard and/or counterfeit drugs.
Counterfeit / Substandard Drugs

Fake Vs.
Genuine
Where do these
counterfeit/substandard drugs
originate from?

 The world’s largest producers of

counterfeits are China, India,
Nigeria, Russia, Mexico, and
Brazil.
How do you define counterfeit
and substandard?

 U.S. law defines counterfeit drugs as those sold under a product name without
proper authorization. Counterfeiting can apply to both brand name and generic
products, where the identity of the source is mislabeled in a way that suggests
that it is the authentic approved product. Counterfeit products may include
products without the active ingredient, with an insufficient or excessive quantity
of the active ingredient, with the wrong active ingredient, or with fake
packaging. (FDA)

 Substandard is similarly defined in that it does not meet

the pharmacological requirements to be considered up to par.
Info:

 Counterfeit Drug Sales will reach $75

billion globally in 2010. (http://www.inthesetimes.com/article/2845/)

 Many counterfeits enter the United

States hidden in plain sight inside the
70,000 packages of legitimate medicines
that pass through JFK and Miami airports
alone, each day. (http://www.inthesetimes.com/article/2845/)
Ties to Organized Crime
“In 1995, an investigation detected the involvement
of
the Naples-based organised crime group, the
Camorra, uncovered a clandestine facility used
to manufacture counterfeit pharmaceuticals.”
-
http://www.safemedicines.org/resources/europe.pdf
NYT, Dubai, Free Trade Zones
 December 17, 2007 the NY Times published an article about a raid that
had a global impact on the sale of counterfeit drugs. This raid occurred
in the free trade zone of the UAE.

 “The seizure revealed that the complex supply chain of fake drugs ran
from China through Honk Kong, the UAE, Britain, and the Bahamas,
ultimately leading to an internet pharmacy whose American customers
believed they were buying medicine from Canada.”

 Free trade zones offer counterfeiters the benefit of little regulatory

oversight, waived tariffs, and it much easier to expedite the transport
to other areas of the world.

 http://www.nytimes.com/2007/12/17/world/middleeast/17freezone.html?pagewanted=all
 “Contributing to this growth has been
the increasing size and
sophistication of drug counterfeiting
rings and the widening involvement of
organized crime groups, including the
“Russian mafia,” Chinese triads,
Columbian drug cartels, Mexican
gangs, and even terrorist groups such
as Hezbollah, IRA and ETA.”
-http://www.fip.org/files/fip/counterfeit/counterfeits0608-ACSH.pdf
 “In fact, according to the federal Joint
Terrorism Task Force, a global terrorist ring
with ties to Hezbollah is importing counterfeit
drugs into the United States by way of Canada.
It's a great money-maker for rogue regimes, too.
The Congressional Research Service says that
North Korea is now producing counterfeits to
fund its military development.“
 http://wwww.signonsandiego.com/uniontrib/20061013/news_mz2e13pitts.html