|Counterfeit drugs (WHO/EDM, 1999, 61 p.)|
A variety of factors contribute to the proliferation of counterfeit drugs. These should be accurately identified, to enable governments to detect counterfeiting problems and introduce effective programmes to eradicate counterfeit drugs in national drug distribution channels. Several possible factors are considered below.
Lack of legislation
Countries need appropriate legislation in place to help in the eradication of counterfeiting. When there is little or no legislation covering the proper control of manufacturing and distribution of drugs, counterfeiting can escape prosecution.
Absent or weak national drug regulatory authority
A competent national DRA is essential if the quality of locally manufactured and imported drugs is to be adequately assessed and local manufacturing facilities properly inspected. Inadequate, ineffective or weak regulatory control could promote unregulated importation, manufacture and distribution of drugs, leading to the proliferation of counterfeit drugs in national drug distribution channels. It could also encourage the emergence of illicit markets and hence the further promotion and marketing of counterfeit drugs. Inadequate human and financial resources for drug control activities could also result in the inability of the national DRA to probe the existence of counterfeit drugs in national drug distribution channels.
Specific factors which may encourage counterfeiting activities include:
· Absence of:
- legal mandate for
(a) the licensing/authorization of manufactured drugs
(b) the licensing/authorization of imported drugs
- legal mandate for inspection
- licensing system to regulate the production of bulk active ingredients and finished dosage forms
- licensing system to regulate the importation of active pharmaceutical ingredients and finished dosage forms
- licensing system to regulate the distribution and sale of drugs
- formal procedures for the licensing/authorization of drugs
- suitable analytical laboratory facility
· Distribution of products through unlicensed/unauthorized intermediaries
· Sales of products through unlicensed/unauthorized outlets.
Lack of enforcement of existing legislation
When existing laws are not rigorously enforced, crimes such as counterfeiting tend to be perpetrated, since there is little fear of arrest and prosecution. Moreover, disregard of trademark rights may encourage large-scale counterfeiting of drugs.
Weak penal sanctions
Absence of or lenient penal sanctions for violations of drugs legislation may encourage counterfeiting.
Corruption and conflicts of interest
Corruption and conflicts of interest may adversely affect the efficiency of DRA and law enforcement personnel, resulting in a failure to arrest, prosecute and convict those responsible for counterfeiting.
Transactions involving many intermediaries
When products pass through many intermediaries or paper transactions, the opportunities for intervention by counterfeiters are increased, especially where controls are lax.
Demand exceeding supply
When demand for drugs outstrips supply, counterfeiting may be encouraged as large profits can be made from the manufacture and distribution of counterfeit products. In some cases, high demand can be generated through the inappropriate use of drugs by consumers. For example, the misuse of steroid-containing creams for bleaching the skin and of steroids for body-building have generated a large international market for counterfeited steroid-containing drugs. These are often distributed through unauthorized channels and/or illicit markets.
When drug prices are high and significant price differentials exist there is a greater incentive to supply cheaper counterfeit drugs.
Sophistication in clandestine drug manufacture
The advent of sophisticated equipment for the manufacture and packaging of drugs has increased the difficulty of detecting counterfeit products because counterfeiters can now imitate genuine drugs almost perfectly.
Inefficient cooperation between stakeholders
When intersectoral cooperation between national DRAs, police and customs services and the judiciary in combating the counterfeiting of drugs is ineffective, counterfeiters can escape detection, arrest and penal sanctions. The tasks and responsibilities of each sector should be clearly described. The reluctance of the pharmaceutical industry, wholesalers and retailers to report drug counterfeiting to the national DRA could impede the national authorities from successfully taking measures against counterfeiting.
Lack of regulation by exporting countries and within free trade zones
Pharmaceuticals made for export are not regulated by exporting countries to the same standards as those produced for domestic use. In addition, pharmaceuticals are sometimes exported through free trade zones where drug control is lax and where repackaging and relabelling take place; this can facilitate trade in counterfeit goods.