The Cost of Counterfeits

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The proliferation of counterfeit medicines is nothing new to pharma; however, the scale of the problem seems to be escalating.

The proliferation of counterfeit medicines is nothing new to pharma; however, the scale of the problem seems to be escalating, especially with the Internet providing an easy means for fraudsters to dispense their fakes. Counterfeiting has a devastating impact on public health and the economy. Not only are consumers paying for products of inferior quality, but their wellbeing is also put at risk. For genuine drugmakers, profits are diluted, but the repercussions extend beyond that.

The European Union Intellectual Property Office (EUIPO) reported in September 2016 that the pharmaceutical industry is stripped of approximately €10 billion of revenue every year because of counterfeit medicines; this figure accounts for 4.4% of the sector’s sales (1). EUIPO noted that the lost sales translate into 37,700 jobs lost across the pharmaceutical sector in the EU as a result of legitimate manufacturers and distributors employing fewer people than they would do had this problem not existed (1). 

According to the report by EUIPO, the United Kingdom’s pharmaceutical sector lost €605 million of sales due to counterfeiting, with 2940 direct jobs lost (1). Germany, France, Spain, and Italy took an even bigger hit, losing more than €1 billion of pharmaceutical sales, which correspond to 6951 employment opportunities lost in Germany, 3945 direct jobs lost in Italy, 3667 in France, and 3223 in Spain (1). 

It is not difficult to see what feeds the unfortunate growth of the counterfeit market. It is a highly profitable activity. The demand for medicines coupled with the cost of prescription drugs make vulnerable patients an easy target that can be lured by lower prices. On a brighter note, regulators worldwide are taking measures to crack down on counterfeits. With serialization and track-and trace legislations being rolled out over the next few years, pharma is doing its part to secure its supply chain. The problem will be an ongoing challenge for the industry, but with advances in technology, it will become easier to detect the fakes in the near future.



1. EUIPO, “The Economic Cost of IPR Infringement in the Pharmaceutical Industry” (September 2016).

Article Details

Pharmaceutical Technology Europe
Vol. 28, No. 11
Page: 5


When referring to this article, please cite it as A. Siew, "The Cost of Counterfeits,"Pharmaceutical Technology Europe 28 (11) 2016.