- The Washington Times - Sunday, February 26, 2006

Special correspondent John Zarocostas interviewed Harvey E. Bale Jr., director general of the International Federation of Pharmaceutical Manufacturers and Associations and president of the Pharmaceutical Security Institute, on efforts for the World Health Organization (WHO) to establish an International Medical Products Anti-Counterfeiting Taskforce. Mr. Bale, a former U.S. government official, earned a doctorate in economics at the University of Maryland. He was interviewed in Geneva.

Question: How serious is the counterfeiting of medicines worldwide, and what do you think can come out of this international task force being set up by the WHO that may start work this summer?

Answer: On the scope of the counterfeiting problem, I think you have to look at this regionally. On a world scale, it’s perhaps 1 or 2 percent by value, but it’s misleading to think of it in that way because what you have is a large gap between the situation in developed countries like the United States or Europe, Japan, Canada, where medicines are safe. The probability of a patient in the United States encountering a counterfeit drug at the pharmacy is almost nil, but if you go across the border, say, to Mexico or to South America, Asia or Africa, you can have a 20 to 30 percent chance of being sold a fake pharmaceutical. So it’s large in developing countries.

But it’s also increasing in terms of the number of [counterfeit drug] seizures in developed countries. I think the establishment of this new task force can help in two ways. First, by raising the attention given to the problem. We mustn’t discourage patients from taking their medicine. That’s worse than doing nothing.

We also need to raise the profile and priority of this issue among police authorities, customs authorities, among the judiciary to give severe penalties for this heinous crime against people. This is attempted murder, in a sense, because you have people who consciously, deliberately mislead people into taking drugs that are not what they purport to be. That’s the definition of a counterfeit.

They may be expired products, they may have no active ingredients, or they may have more active ingredients — that is also dangerous.

Q: Is the Internet increasing the problem, and could this get worse in the future with more bogus Internet pharmaceutical sites selling counterfeit medicines?

A: There are already hundreds of these bogus sites, and given the anonymity of the Internet, it’s important for people to understand that if they buy a drug over the Internet, if it is not from an established supplier — that is a supplier that also has a physical presence locally — they’re running a high risk of buying a poor quality medicine that is a fake.

These Internet sites are advertising that they’re in Canada or the U.S., whereas the source of the drugs is from Asia or other parts of the world. A consumer who sees the Canadian or U.S. flag on a Web site could be totally unsuspecting. If a person buys a drug over the Internet without knowing the supplier, they’re engaging in very risky business. Now, this can grow as the Internet grows. This has been a huge problem in the United States, and it’s a growing problem in Europe. …

Q: Has the problem been exacerbated by the increase in global trade flows and by the expansion of the pharmaceutical industry globally?

A: I think it’s the second factor. Fifteen years ago, China and India were not global suppliers of medicines. Today, these two countries, by the way, are the two biggest exporters of counterfeit medicines in the world. …

But it’s not just India and China. Many other developing countries around the world 15 to 20 years ago were simply not engaged in the business of pharmaceuticals and global trade. This is what has changed, plus the Internet, and the expansion of global trade.

You also have the phenomenon in many of the free-port or free-trade zones that are being set up. They are not subject to the same amount of oversight in their activities because, technically, they are not part of the customs area of the country. In fact, we have seen intermingling of legitimate with counterfeit pharmaceuticals, then they are shipped elsewhere.

Q: Are some governments and companies in fear of brand damage in denial of the problem?

A: There are many countries where regulatory authorities are afraid to admit they have a problem. They feel if they admit something, they will be seen as the cause of the problem. Of course, this problem is overwhelming many authorities.

We set up the Pharmaceutical Security Institute in 2001. We now have 22 members. These are companies that are publicly known as fighting the counterfeit problem. So I don’t think it’s a question of worrying about your brand. What you have to worry about is the reputation of the company for not acting.

You have to be vigilant. You have to be seen by consumers and doctors as being vigilant. I think the problem in the past was that many companies did not even know that they had a counterfeiting problem. Sales were increasing. But when they found the sales in the pharmacies were higher than their audited sales, then they realized that there was a problem.

Q: Is it a problem not only for original brand medicines but also for generics?

A: Generics, particularly in developing countries, are heavily counterfeited. These are products that are not known by any brand but simply that they’re a penicillin or a painkiller product. Because the marginal cost of supplying the product is so low and the risks are minimal to the counterfeiter.

Q: What can be done to help developing countries enhance oversight?

A: Well, it’s know-how that we have to transfer; it’s not so much the electronic technology. There is some technology available for field testing. We do have those products, and they are being supplied by the pharmaceutical industry at very low cost. You just have to pay transportation and a couple of thousand dollars.

You can buy equipment that can test over 40 medicines for their purity. Those are being used in about 50 developing countries right now. More can be done on that. Perhaps the World Bank can get involved in financing more of this equipment.

The other technology is know-how. Knowing how to identify chains of distribution and identify best-practice chains of distribution, taking products off the street. Too many products are found in the streets.

We’ve also got to deal quite frankly in some countries. Because of the low salaries paid to public officials … many counterfeiters are paying officials to escape punishment.

Q: Is there a shortage of resources for enforcement — not only in poor countries, but also in developed countries and international agencies?

A: Yes, yes. The priorities are elsewhere — pornography, illegal drugs like heroin. These are proper enforcement activities, but companies have to be particularly vigilant.

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