Fake Drugs Fuel Brand Counterfeiting Concerns

Battling counterfeit products is one of a brand's biggest headaches. More often than not, counterfeiting strikes luxury and accessory brands, since it is easier to sell fake branded handbags, shoes, and clothes online and in flea markets and bazaars around the world. But what about when buying a knock-off has life-or-death implications?

Fake products are penetrating an even more serious category than luxury goods — pharmaceuticals. America's Food and Drug Administration just announced the findings of the agency’s investigation of fake vials of the cancer drug Avastin that have showed up in California, Illionis, and Texas.

The FDA's tests indicated the vials did not contain Avastin's active ingredient, and traced the phony drug to the U.K. via a distributor in Tennessee. Reuters reported that the fake Avastin apparently originated in Cairo, Egypt and went from there through Switzerland to Britain. While the FDA was warned about the products by British officials late last year, it only confirmed that they were counterfeit last week. Cancer patients and medical practitioners, understandably, are up in arms.

While the U.S. medical community is being alerted by Roche Holding's Genentech unit, maker of Avastin, it isn't known yet whether patients have been given the drug, or exactly how much of it has been distributed. The FDA has set up an online resource about counterfeit medicine, while President Obama this week moved to reassure cancer patients and the medical community that the government is addressing the shortage in cancer drugs that created a marketplace for fake drugs to proliferate.

The case highlights that a new, dangerous channel for counterfeits in the U.S. now exists. Most Americans have thought of drug counterfeiting as something that happens elsewhere. But Jonathan Rockoff and Christopher Weaver write in the Wall Street Journal that "the latest incident, which follows the appearance of other fake drugs in the U.S. — including counterfeits of the weight-loss treatment Alli and the influenza treatment Tamiflu — suggests it is a growing risk, especially as more medicines and drug ingredients sold in the U.S. are made overseas."

In 2010, WSJ reports, fake versions of the weight-loss treatment Alli lacking the drug's active ingredient were being sold online, as well as a fake "generic Tamiflu" that contained an antibiotic instead of antiviral drugs. Fake Viagra and Lipitor, as well as other drugs, have been sold over the Internet.

The result is a flurry of activity on many fronts designed to stem the flow of fake drugs. The National Association of Boards of Pharmacy, for example, has documented thousands of fake online pharmacies who distribute counterfeit, adulterated and substandard drug products, often without requiring a valid prescription. As soon as the counterfeit Avastin was discovered, Genentech said on its website the company was "implementing special packaging and printing techniques that make counterfeits both more difficult to make and easier to spot."

But the problem is global, and given the huge and lucrative market for pharmaceuticals, it won't be easy to solve. More than 1,700 incidents worldwide related to drug counterfeiting occurred in 2011, according to Forbes. More than 80 percent of the active ingredients in U.S. drugs are now manufactured outside of the country, which makes controlling fakes even more difficult. As for other countries affected by counterfeiting, Forbes reports as much as 30 percent of drugs sold in Asia and Latin America, and 20 percent of drugs sold in India, are fake.

Nathan Sigworth, founder and CEO of PharmaSecure, told Forbes it will require three things to eliminate counterfeit drugs in the U.S.

"First, legislation which would criminalize the use of counterfeit versions of trademarks and enhances penalties when counterfeit marks are used on drugs; second, expand the FDA's capacity to investigate counterfeits; and finally, pharmaceutical manufacturers have to implement effective track-and-trace systems to protect their supply chains and their consumers." PharmaSecure uses a combination of ID codes and the mobile phone to deploy technology that authenticates drugs.

Consumers may have been concerned before about buying fake brand name merchandise, but drug counterfeiting requires a whole new level of heightened awareness on the part of all.