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A number of organizations have analyzed and estimated the size of pharma’s counterfeit and diversion problem.
A number of organizations have analyzed and estimated the size of pharma’s counterfeit and diversion problem. The Pharmaceutical Security Institute (PSI), established in 2002 by security professionals who work for pharmaceutical companies, examines it from that point of view, and from the law-enforcement angle. The non-profit group is based in the Washington, D.C. area with operations in the United Kingdom and Hong Kong, and currently has 33 global members. CEO Thomas Kubic was previously deputy assistant director at the US Federal Bureau of Investigation (FBI), in charge of the white collar crime and corruption programs.
PSI’s Counterfeit Incident System database uses both public and proprietary information to track incidents of illegal diversion and major theft (i.e., cases involving more than $100,000), as well as counterfeiting. Some of these data are summarized in annual Enforcement Statistics and Situation reports on the organization’s website, www.psi-inc.org.
Numbers of incidents as well as confiscations are trending upward, Kubic says, noting the scarce resources that the world’s governments are devoting to anticounterfeiting efforts. Even in the US, where anticounterfeiting efforts are well advanced, only about 50 agents in FBI are working on counterfeiting of all types of products, not only medicines.
In 2015, he says, PSI found that there were 3002 new incidents, up 37% from the previous year. Of these, 1689 involved counterfeits, 1106 were diversions, and 207 were major thefts. Seizures were up 33%, mostly due to improved customs operations and the discovery of major counterfeit sources in Cambodia and Vietnam. Kubic says he is seeing a smaller number of big-time seizures, and an increase in counterfeit injectable medicines, a very worrying trend.
In 2015, PSI data showed an increase in diversion, theft, and counterfeiting of dermatological medicines, which were up by 57%; incidents involving central nervous system therapies were up by 29%; and cardiovascular drug incidents, 30%. Erectile dysfunction treatments remained a targeted medicines focus for counterfeiting and diversion. In all, 1100 different types medications were seized in 2015, up from 680 in 2014, Kubic says.
Previous analysis of PSI data (1) noted a number of trends, with criminal groups in China implicated as the source in nearly 28% of reported pharmaceutical counterfeiting and diversion.
Kubic sees less traditional or hieratical organized crime involvement in counterfeiting, at least in developed countries. In the early 2000s, this was clearly seen when Dora Akunyili, then director of Nigeria’s FDA, NAFDAC, took a hard line in dealing with drug counterfeiters, facing death threats, narrowly missing being shot, and having her laboratories burned down. Her stance inspired a number of others in other developing nations.
Even though their government representatives may have signed on as participants in global anticounterfeiting programs, says Kubic, there is rarely any consistent follow up.
“In some cases, criminals are suspected of making payoffs to the authorities,” he says. For example, this year, in Kenya, a whistleblower accused the nation’s Pharmacy and Poisons Board of allowing fake and substandard drugs from unregistered suppliers into the country, issuing fake permits between 2005 and 2011 (2). In general, throughout the world, Kubic says, “We need to see more effective coordination between regulators, customs, and the police.”
At the same time, in the US, illegal operatives have shifted from an emphasis on unauthorized online pharmacies, which were a major threat to public health a few years ago, especially during periods when key drugs were in short supply (3).
Since then, they have increased their efforts at direct-to-clinic sales of diverted or counterfeit drugs, Kubic says. This was first seen in the counterfeit Avastin case, when tainted materials reached the legitimate supply chain after clinics bought directly from illegal sources. “Marketers are targeting retirement homes and clinics,” he says, where diverted oncology drugs are offered at up to 40% off list costs.
FDA’s Office of Criminal Investigations (OCI) has been stepping up investigations of physicians, clinics, and other groups suspected of buying diverted pharmaceuticals. However, a September 2016 report (4) questions its methods. In some cases, author Sarah Lynch found, healthcare professionals had unknowingly purchased the materials; in addition, she alleges that aggressive tactics failed to result in prosecutions or other tangible results.
PSI’s Kubic believes that an outreach and education effort yields better results than aggressive enforcement alone.
“It’s more important to educate potential buyers than to try to put the genie back in the bottle,” he says. Public outreach is also important, he says, citing the International Federation of Pharmaceutical Manufacturers and Association’s (IFPMA’s) Fight the Fakes program, which features real-life stories of counterfeiting and effective response, as an example of an information program that’s being done right.
Although counterfeiting harms the public, it is still considered intellectual property theft and prosecution is handled that way. Generally, penalties are fairly lax. Nigeria currently imposes life imprisonment, while Israel recently increased its penalty from six months to three years.
Complicating the picture has been the blurring of distinctions between diverted and counterfeit pharmaceuticals, and economically motivated adulteration. After the first Gulf War, Kubic says, security agencies learned that Saddam Hussain had looked into adulterating medicines and cosmetic products being sold to the US and Europe. However, he notes that most counterfeiters and adulterators are in the business for the money but don’t wish to harm people. “They don’t use poisons, although their placebos kill,” he says, and proving a link between patient deaths and counterfeit or diverted product can be extremely difficult.
1. Mackey et al., Am. J Trop Med Hyg, (June, 2015), June 3: 92 (Supplement 6): pp. 59-67.
2. S. Murumba, “Whistleblower Lifts Lid on Fake Drugs Import at Poisons Board,” August 9, 2016, businessdailyafrica.com.
3. B. Liang et al., J. Med. Internet Res, 14(1)2012.e27.
4. S. Lynch, “FDA Criminal Office Draws Fire from Agents and Doctors Over Drug Import Crackdown, “ September 8, 2016, Reuters.com.
Vol. 40, No. 10
When referring to this article, please cite it as A. Shanley, "Tracking a Global Problem," sidebar to "Chasing a Moving Target for Counterfeiting and Illegal Diversion,” Pharmaceutical Technology 40 (10) 2016.