In mid-May, investigators from Colombia's National Institute for the Supervision of Medications & Foods (Invima) discovered a thriving drug operation in Bosa, a poor neighborhood of Bogotá. Instead of cocaine or heroin, investigators found something else. Workers inside a trio of tiny dilapidated houses were cranking out more than 20,000 counterfeit tablets daily of flu drug Dristan, a generic aspirin known as Dolex, and Ponstan 500, a popular painkiller made by Pfizer Inc. "The drugs were produced in filthy conditions," says Invima General Director Dr. Miguel Rueda. Invima says the pills contained boric acid, cement, floor wax, talcum powder, and yellow paint with high lead levels, all used to replicate the genuine medications' appearance.
In Colombia and elsewhere in Latin America, counterfeiting of over-the-counter and prescription medicines is big business. So big, in fact, that major pharmaceutical makers in Europe and the U.S. are sounding the alarm about counterfeit drugs getting into consumer outlets throughout Latin America and even abroad. "The scourge of counterfeit medicines is spreading rapidly across the globe, and it would be a mistake to think any country is immune to it," says Jim Christian, head of corporate security for Basel-based drugmaker Novartis. The result is a serious loss of revenue for all global drug-makers. Worse, some consumers have gotten very sick--and even died--because of the conditions these drugs are produced in or the unsafe ingredients used in their manufacture.
Hearings this month in Washington will shed some light on this fast-growing industry. Counterfeits range from copies that have the same efficacy as the original to those with few or no active ingredients to those made of harmful substances, such as the pills found in Bosa. The counterfeits also stand apart from prescription drugs made correctly, under safe conditions, by reputable drug manufacturers in India, Argentina, and elsewhere that choose not to honor traditional patents but don't mislabel their product, either.
THE U.S., TOO. Counterfeits, in contrast, are deliberately peddled as the real thing. Fakes can be produced for less than a penny, then sold to distributors at discounts of up to 80% off what legitimate manufacturers charge. The knockoffs are purchased by unsuspecting pharmacies, hospitals, and government health agencies, which pass them on to consumers. Some of the drugs even end up in the export market.
How bad is the problem worldwide? The International Federation of Pharmaceutical Manufacturers Assns. (IFPMA) in Geneva conservatively estimates that 2% of the $327 billion worth of drugs sold each year are counterfeit, or about $6 billion worth. But some representatives of the world's biggest drug companies believe that $19 billion worth of counterfeits are sold annually. In some African and Latin American nations, as much as 60% are counterfeit.
The globalization of the knockoff trade frightens investigators. "How can we expect to keep those products outside the U.S., Europe, and Japan?" says Harvey E. Bale, director general of the IFPMA. The World Health Organization thinks 8% of the bulk drugs imported into the U.S. are counterfeit, unapproved, or substandard. In late May, three different counterfeit drugs--two hormone treatments and one cancer medicine--were discovered for sale in eight U.S. states.
One way to stem this tide is better regulation in emerging markets. In the wake of several deaths triggered by counterfeit drugs administered to prostate-cancer patients, Brazil has enacted legislation that makes counterfeiting of drugs a crime punishable by 10 to 15 years in jail and a fine. This is a step in the right direction. But as long as the world's poor need cheap medications, the counterfeit drug industry will continue to flourish.
By Kerry Capell in London and Suzanne Timmons in Bogotá, with bureau reports
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