New York: Counterfeit medicines are on the rise worldwide, as criminals capitalize on the growing use of the Internet by consumers searching for inexpensive drugs.
Seizures of bogus prescription medicines jumped 24% to 1,513 incidents in 2007, and illicit versions of 403 different prescription drugs were confiscated in 99 countries, according to the Pharmaceutical Security Institute, a Vienna, Virginia-group funded by 26 drug makers. The $3 billion (Rs12,870 crore) in counterfeit drugs seized include generic copies that violate patent laws and products that lack active chemical ingredients or contain improper dosages.
Most copied: Tablets of Pfizer's erectile dysfunction drug Viagra. Photograph by JB Reed / Bloomberg
In the decade since Internet sites began selling illegal copies of Pfizer Inc.’s erectile dysfunction drug Viagra, counterfeiters have diversified, marketing pills to treat heart disease, arthritis, asthma, AIDS and cancer, according to the institute, which has been monitoring product seizures since the group was formed in 2002.
Copies of 19 of the world’s 25 best-selling drugs were among those seized by industry security, customs agents and police last year at ports of entry, in free-trade zones or at illicit manufacturing and distribution sites, according to data compiled by Bloomberg.
“It’s a big issue, it’s a global issue, it’s an insidious issue,” said John Lechleiter, Eli Lilly and Co.’s president and chief executive officer, in an interview at his Indianapolis headquarters.
New York-based Pfizer, the world’s largest drug maker, estimates it may be losing sales of $2 billion a year in Viagra alone, given how much of the drug’s active ingredient is produced in India and shipped abroad, says Rubie Mages, a company director of global anti-counterfeiting. Sales of the impotence drug in 2007 totalled $1.8 billion.
“Over the past six years we’ve seen double-digit increases around the world” of counterfeit drug seizures, said Thomas Kubic, a former US Federal Bureau of Investigation agent who is executive director of the pharmaceutical institute, in an interview at his office in Virginia.
“Oftentimes, the drugs that are being sold emanate from China, from Russia and from India,” says Steven Rucker, an executive managing director of Kroll Inc., a New York security firm used by pharmaceutical companies to track down counterfeiters.
Rucker says in the last two years, Kroll has worked for 10 drug and medical device companies, though he says confidentiality agreements prevent him from identifying them.
Fake versions of Pfizer’s Viagra and its impotence pill competitors—Levitra from Leverkusen, German-based Bayer AG and Schering-Plough Corp. of Kenilworth, New Jersey, and Cialis from Eli Lilly—have been traced to manufacturers in China and India.
“Our awareness of the extent of counterfeiting came about mainly as a result of Cialis,” says Lechleiter of Indianapolis-based Lilly. “But the problem is not restricted to Cialis. We’ve seen counterfeit versions of other Lilly products emerge in markets around the world.”
Counterfeits of Lilly’s top seven products, led by the anti-psychotic drug Zyprexa, and more than two million tablets of Cialis, were seized in 800 raids around the world last year, Lilly security officials say. The top seven drugs made by Lilly generated 68% of the company’s $17.6 billion in sales of human medicine in 2007. Seizures in 45 countries last year found counterfeits of Pfizer’s nine best-selling drugs, including fakes of Lipitor, the cholesterol pill that accounts for one-quarter of Pfizer’s $48 billion in sales. Illegal copies of Pfizer’s eight other top drugs, which account for another 30% of sales, also were seized.
Pfizer’s Mages says Viagra remains the world’s most counterfeited drug and accounted by volume for almost three-quarters of the illicit copies of Pfizer brands seized last year in 45 countries. The drugs are marketed on Internet sites whose operations are also global, she says.
US Food and Drug Administration (FDA) officials say they are unable to stop the flow of illegal drugs sold on the Internet. “There are counterfeiters circulating all over the world,” says Ilisa Bernstein, director of pharmacy affairs at the Rockville, Maryland-based FDA. “It’s hard to tell how many there are because the counterfeiters are just so good at what they do.”
The agency can’t police all the international drug shipments referred to FDA by US Customs and Border Protection Inspectors at post offices, she says.
“There are millions and millions and millions of these packages coming in at international mail facilities each year,” Bernstein says.
“It’s very difficult to find and catch all of these drugs that are coming in to protect patients from all these very risky drugs.”
The FDA’s claim that it can’t destroy counterfeits is disputed by representative Steven Buyer, an Indiana Republican. “The FDA does not destroy it, the FDA becomes the enabler of the counterfeiters,” says Buyer, who predicts counterfeit drugs will be a $100 billion global business in five years.
Representative Bart Stupak, a Michigan Democrat who chairs the house energy and commerce subcommittee on oversight and investigations, says the FDA’s failure to act has contributed to the flow of counterfeit drugs into the US. Stupak says he has repeatedly asked the FDA if it needs new laws passed to strengthen enforcement and they “have remained silent”.
Few law enforcement agencies make stopping counterfeit drugs a priority, says James Christian, vice-president for corporate security for Basel, Switzerland-based Novartis AG, which is investigating sales of counterfeit versions of its hypertension drug, Diovan.
“When you are talking about where manufacturing is taking place, where distribution is taking place, where the printing of the counterfeit inserts and packaging is taking place, these cases are 99% made by the industry,” says Christian.
It is unclear how much, if any, health damage is caused by the counterfeiting. The World Health Organization (WHO) says 10% of the drugs worldwide may be counterfeit, with more than 50% of the medicines that are shipped to some countries not containing the proper ingredients.
The Geneva-based WHO estimates that tens of thousands of people may be dying from counterfeit drugs used to treat malaria, HIV/AIDS, diabetes and tropical diseases. The deaths are hard to identify since people die partly as a result of getting no effect from the treatments they are taking, according to Valerio Reggi, executive director of WHO’s International Medical Products Anti-Counterfeiting Taskforce.
Millions of Americans buying from the Internet are at risk, says Frederick Felman, executive marketing director for MarkMonitor, a San Francisco company that helps drug makers protect their trademarks on the Internet. While there are fewer than 300 online pharmacies in Canada authorized by government agencies, more than 11,000 fake Canadian pharmacies are operating online from overseas jurisdictions, Felman says.
Mark Kolowich, one of the few Americans convicted of drug counterfeiting, says he sold more than $20 million of illegal copies of erectile dysfunction drugs and other medicines through a series of websites before being arrested in San Diego and pleading guilty in 2004.
Kolowich says he used the Internet to find finished pills and active pharmaceutical ingredients from China, India and elsewhere. He also sold knock-offs of Viagra, Merck and Co.’s baldness drug Propecia; Pfizer’s Lipitor and its painkiller Celebrex; and Lilly’s Cialis, to as many as 65,000 customers, from late 1998 until his arrest in March 2004. “If you are on the Internet, people can’t really tell if you’re a big operator or a reputable operator, who you are as long as you can make that website look pretty impressive,” Kolowich says.
Jaime Hellman, Elizabeth Lopatto and Wendy Soong contributed to this story.