According to World Health Organization (WHO) data, losses arising from fraudulent pharmaceutical products were estimated at USD 60 billion in 2008. The number jumped to nearly USD 75 billion in 2010. Some countries are understandably more affected than others.
The problem is most prominent in third world countries of Asia and Africa, where, for example, one third of all anti-malaria drugs were found to be either fake or expired in 2012, according to the Lancet medical journal report.
Although this is a unique case, as malaria usually hits the most vulnerable third world countries with poor health conditions and institutions, the issue of counterfeit drugs is present almost everywhere. Most of the global reports see China as the largest source of counterfeit drugs and incidents related to this issue.
The consequences of consumption of counterfeit medicines may be deadly: if drugs are not potent enough, they fail to cure the patient and they also may contribute to increasing resistance of disease to drugs overall. Drugs without active ingredients lead to people dying from otherwise treatable conditions. In some cases, such drugs are deadly because they contain heavy metal, or bacterial, fungal or other contaminants.
A growing concern within the Arab world
The situation in the Arab world is also raising concerns. Director of the Executive Office of the Council of Ministers of Health of the Gulf Cooperation Council H.E. Tewfiq Ahmed Khoja recently said 35 percent of medicines circulating in some Arab countries are fake.
When addressing the second Arab conference on food and drugs in Sharm El-Sheikh, he also expressed concerns over the rising rate of adulterated drugs and poor monitoring by regulatory bodies, one of whose main purposes is to protect consumers from such drugs.
According to the Mohamed Helmy, country manager for Qatar, Oman and Bahrain, Leo Pharma, GCC countries are not among the highly affected. He tells BQ magazine the GCC is still in a “benign stage” with regard to the issue. There is, however, no accurate data available about the annual loss on the part of domestic pharmaceutical firms due to the widespread availability of counterfeit drugs, he adds.
Various reports coming from neighbouring countries indicate the GCC is exposed to this problem like any other part of the world, and are calling for alertness and precaution. The greatest danger for consumers comes from web pharmacies.
According to the WHO, almost half of all bought and sold drugs on the Internet are fake and 10 percent of global pharmaceutical trade involves counterfeit products. It is also important to know that internet pharmacies, which are very often the source of counterfeit drugs, present themselves as Canadian, for instance, in order to look unsuspicious and therefore win consumers’ acceptance and confidence.
Most common examples of counterfeit drugs that appear on the Internet are websites promoting weight-loss products, cosmetics, sexual stimulators, etc., the use of which can increase the chance of cardiac diseases, cancer and sexual impotency. It has also been reported that counterfeit drugs have been promoted and sold by fitness coaches in fitness clubs.
In Kuwait, for example, smuggling practices are becoming ever more organised, which prompted decisive action by the local authorities, although these were hampered by lack of modern surveillance tools and shortage of inspectors.
The Medicine Inspection Department at the Ministry of Health has pushed the initiative for the establishment of specialised offices in collaboration with the Ministry of Interior, Ministry of Commerce and Industry and Ministry of Information which they believe will curb the sale of smuggled and fake medicines.
There are frequent reports from UAE as well, which is, according to Helmy, is among most affected GCC member. The medicines are usually smuggled into the country under false labels such as clothing or electronics, and greater supervision of imports will certainly improve situation.
The GCC countries have been especially vulnerable through free zones, where many illegal or counterfeit drugs enter the region, and especially the UAE.
High prices and drug shortages closely linked to counterfeits
The sales of counterfeits are closely related to drug shortages and high prices of medicines while the long drawn and convoluted supply chain also facilitates counterfeits. Despite rapid development of the pharmaceutical sector and overall GCC market, with forecasted spending at USD 12 billion by 2020, the Lance regional bank in Dubai estimates that 80 percent of all medication in the GCC is imported. This inevitably leads to higher prices than world average, creating a fertile ground for counterfeit drug providers who will sell their fake products under price.
With new industrial complexes and joint ventures with international players aimed at raising domestic pharmaceutical production, this gap may be closed or at least narrowed. However, certain drugs are patented and cannot be locally manufactured.
The Gulf Central Committee for Drug Registration last year announced a standardised price reduction for 2,432 out of 4,000 drugs registered in the GCC countries. Price reductions range from 5 to 60 percent. This move will also strengthen negotiating positions with pharmaceutical companies, winning better deals.
Last year, for example, Bahraini media reported, that in some cases medicines in the country were 70 percent more expensive than in Saudi Arabia. Helmy says: “Unified prices within the GCC will reduce parallel importation but won’t affect the counterfeit issue.”
The most expensive drugs in the market are the ones that counterfeiters focus on in order to maximise their profits. Fake pharmaceuticals are big business, attracting big players from the underground world, such as the Russian mafia, Colombian and Mexican drug cartels and Chinese transnational organised crime groups known as “triads”.
But it doesn’t stop there. Three years ago World Finance, citing a report by the Washington-based think tank Stimson, reported there was evidence pointing to the direct involvement of Hezbollah and Al Qaeda in drug counterfeiting. Experts explain counterfeiting medicines is even more lucrative than production and smuggling of hard drugs, such as heroin.
Take Viagra, for example – it costs USD 60 per kilogram to buy a Viagra compound in China or India, which, when packaged in 25mg tablets would sell on prescription in the US for up to USD 200,000.
Comprehensive approach is crucial
Rapid development of the counterfeited drug market calls for urgent and decisive measures to protect consumers from harmful and life threatening effects of fake medicines and limit the impact of organized crime groups.
In an interview with the Saudi Gazette, Dr. Wail Al Qassim, general manager of MSD (Merck Sharp & Dohme) Saudi Arabia pharmaceutical company, suggested a comprehensive approach including the further development of legal frameworks and governmental commitment of GCC states to accept the seriousness of this problem.
He stressed that collaboration of all stakeholders is crucial, along with constant quality control over the manufacturing, distributing and importing of pharmaceutical drugs. In addition, he said, exchange of information is one of the crucial tools in suppression of this issue.
“Greater the exchange of information whether on the local level or on amongst global regulatory bodies, the easier it is for local governments to catch counterfeiters and prevent them from selling in the local market.”
Experts suggest that governments must work closely with IT and high tech sectors, searching for suspicious pharmacies on the Internet and creating algorithms which would place legitimate pharmacies at the beginning of the search list, appearing first when searching for their services.
Furthermore, many believe punishments for manufacturing and selling counterfeit drugs must be much harsher while authorities have to mobilise more resources towards educating the public and rising public awareness.
Helmy believes the current legislation is good enough, but there are those who disagree. Some GCC health officials have called for strict penalties on countries and companies found engaging in exporting or importing adulterated and counterfeit drugs in order to limit this problem. The experience in developed countries has shown that strong legislation regulating the drug market does act as a deterrent to counterfeiters.