Postnote template

January 2010 Number 352
Counterfeiting of medicines is increasing, is often linked
to other criminal activities and poses risks to public
health. It exposes people to medicines of unverified
quality, safety and efficacy. This POSTnote considers
the extent of the global counterfeit medicine trade, its
impact in the UK and the technologies and policy
options available to combat it. It also examines the risks
and benefits of online pharmacy, one of the main ways
in which counterfeits are distributed.

Counterfeiting is a high-volume, high-profit business which poses health risks, infringes intellectual property rights, medicines legislation and other aspects of criminal law. Indirect impacts are lost revenue for pharmaceutical Figure 1. Distinguishing genuine (right hand side) and counterfeit tablets
companies, brand damage and decreased public (and packaging) apart on visual inspection is difficult (image courtesy of Pfizer). confidence. Counterfeit medicines and devices circulate In 2005, a counterfeit version of this cholesterol-lowering drug was found in the globally via unregulated channels (including unauthorised UK. 120,000 packs were recalled from 240 pharmacies; 60% were counterfeit.1 online pharmacies) but can also enter legitimate drug supply chains. It can be difficult to distinguish them from pharmaceutical industry activities, often in collaboration. genuine products (Fig 1). The World Health Organisation Counterfeits pose a greater problem in countries where (WHO) classes medicines as counterfeit if they: manufacture and supply of drugs are less regulated and where enforcement is weak. Estimates indicate that: are fraudulently packaged or mislabelled with respect to identity and/or source (for example if they are not  in wealthy countries like the UK with strong made by the genuine manufacturer); regulatory frameworks (Box 1), counterfeits are likely to account for 1% of the total medicines market, contain no active ingredient, incorrect quantities or an undeclared active ingredient; but an estimated 50% of drugs sold online are fake; are contaminated with other materials (chalk, boric in emerging economies, the proportion is 10% but in acid, lead and rat poison are typical examples); the former Soviet republics it can be as high as 20%; are past their expiry date; in Latin America, South East Asia and Sub-Saharan Africa an estimated 30% of medicines are counterfeit.2 contain no or incorrect patient information leaflets. Counterfeits often display more than one of these features. A study of 286 incidents showed that 67% had Data collated by the Pharmaceutical Security Institute both counterfeited drug and packaging, 28% had report that the number of unique incidents increased counterfeit drug and 5% had counterfeit packaging only. annually from 196 in 2002 to 1,834 in 2008.3 The global reach of a counterfeit made in one location can be Extent of Counterfeit Medicines
significant: drugs made by a producer in China were While counterfeiting of branded and generic (copies of found in 42 countries.4 EU borders and customs agencies out-of-patent drugs) medicines is increasing in volume have targeted illegal medicines, seizing 2.7m items in and range, there are few comprehensive analyses of 2006. A two-month action in 2008 (MEDI-FAKE) led to global statistics due to varied definitions of counterfeits seizure of 34m illegal medicines, including antibiotics, between legislatures, and the level and frequency of erectile dysfunction tablets and chemical precursors used monitoring. Data are collected by governments and in manufacturing.5 postnote January 2010 Number 352 Counterfeit medicines Page 2
Box 1. Safeguarding the UK Drug Supply Chain
Box 2. Counterfeits in the UK Legal Supply Chain
The UK government‟s Medicines and Healthcare products The MHRA recalls suspect medicines, alerting hospitals and Regulatory Agency (MHRA) is responsible for ensuring that pharmacies to remove the items, or to retrieve them from medicines are safe and effective. Its Enforcement and patients once dispensed. It has issued nine recalls since Intelligence Group investigates suspected counterfeiting in 2004 for counterfeits that reached pharmacies and patients the regulated and unregulated supply chains. If the MHRA through the legitimate supply chain.1 Four batches were identifies a public health risk, it issues an alert (classified intercepted at wholesale level and one in a clinical trial. from 1 (most critical) to 4 depending on risk) and the drug is Medicines often contained insufficient active ingredients and withdrawn. Class 1 alerts arise from medicines being had been repackaged into English cartons via parallel trade contaminated, mislabelled or containing incorrect ingredients (Box 3). They included: and require immediate recall. The MHRA has a 24 hour  cardio-vascular disease - counterfeit Plavix (inhibits
hotline for reporting counterfeits and encourages all agencies blood clots) was recalled from pharmacies in 2007. (police, pharmaceutical companies, customs, trading  prostate cancer - counterfeits of Astra Zeneca‟s Casodex
standards and pharmacies) and individuals (health reached patients in 2007. The packets bore genuine professionals and the public) to report suspect drugs. Astra Zeneca lot numbers; the original lots bearing these numbers were supplied to France.  anti-psychotics - counterfeits of Eli Lilly‟s drug Zyprexa
Manufacture of Counterfeits
bore genuine lot numbers and reached patients Recent seizures at EU borders show that 60% of drugs triggering a Class 1 recall. originated from China, where counterfeiters focus on  cholesterol - counterfeits of Pfizer‟s drug Lipitor reached
high-value, in-demand drugs. Raids on premises show pharmacies in 2005 and 2006. The Class 2 recalls issued also had to apply to authentic products since that production often occurs in unsanitary conditions, genuine lot numbers were used on the fakes. using rudimentary equipment and cheap labour to mass-  obesity - counterfeits of Abbott‟s anti-obesity drug
produce tablets and packaging. The UK is not a major Reductil reached patients in 2004. location for manufacturing counterfeits, but is a large market for sale and transit with seizures traced to production in the Far East and Indian sub-continent. Using online pharmacies poses indirect health risks. Men are less likely to consult a doctor than women and more Types of Counterfeit Medicines in Circulation
likely to buy medicines online. Men buying POMs (such The classes of drugs most commonly counterfeited are as for erectile dysfunction) from illegal online pharmacies genito-urinary, anti-infectives and central nervous system may risk their health in two ways. Firstly, the drug may medicines but piracy of other categories is increasing. A be counterfeit. Secondly, a man consulting a GP about variety of counterfeit medicines has been seized in the erectile dysfunction would be assessed for the risk of UK including treatments for erectile dysfunction, hair cardiovascular disease and stroke, since the conditions loss, obesity and pain relief (Box 2). Life-saving drugs for may be linked. A man buying online would forgo this blood pressure and cancer, and also anti-psychotics and assessment and so miss out on opportunities for other statins are now appearing. Medicines seized in the UK diagnoses, with consequences for long-term health. often contain reduced amounts of the active ingredient and all included impurities and failed to meet standards Non-health Related
required by Good Manufacturing Practice regulations. Indirect impacts of counterfeiting include intellectual The UK has had nine known cases of counterfeit property infringements and economic impacts on industry prescription-only medicines (POMs) reaching the legal from lost sales and brand damage; such commercially supply chain since 2004. In an incident in 2008, sensitive information is not available. There are few 72,000 packs of counterfeit heart and cancer medicines analyses of economic losses, but estimates of the market led to four recalls. The MHRA points out that this is in value of seized medicines in the UK since 2004 amount the context of 800 million prescriptions issued annually. to £6.5m. Sales from unauthorised online sources exceed There are no reliable statistics on the number of this figure by a significant margin, estimated by one counterfeits reaching consumers through unregulated survey at $12bn a year worldwide in 2008. sources, such as illegal online pharmacies.
Incentives to Counterfeit Medicines

Consequences of Counterfeit Medicines
Several factors make this activity attractive to criminals: Public Health and Patient Safety
 free trade zones, globalisation and complex medicine Counterfeits containing sub-therapeutic levels of active supply chains make it easy to introduce counterfeits ingredients pose a significant health risk to patients into legitimate supply channels, especially in areas taking medicines to manage life-threatening conditions. with weak drug regulatory controls. Counterfeit formulations may be metabolised differently,  it is a lucrative activity, especially for drugs that so even if an active ingredient is present, it may not be command high prices or are required in large volumes. taken up by the body. Health can also be compromised if  technology to make constituent ingredients and counterfeits contain toxic substances such as heavy packaging is cheap and readily available. metals. No fatalities have been attributed officially to  the Internet provides counterfeiters with ready access counterfeits in the UK but have been reported elsewhere to markets outside regulated medicine supply chains. (including Canada, but mostly in the developing world). It Current legislation and regulation do not provide a is unclear whether the UK coroners‟ system is well- strong enough deterrent, through both enforcement placed to detect the involvement of counterfeits. and penalties, to discourage counterfeiters.4 postnote January 2010 Number 352 Counterfeit medicines Page 3
Complex Medicine Supply Chains
Medicine distribution in the EU is complex. Historically,
Box 4. Anti-Counterfeiting Technologies
medicines passed from the manufacturers to patients via Packaging technologies deter counterfeiters and alert users
wholesalers but now many legitimate intermediates are to medicines of dubious origin. The optimum place for overt security measures is at the point of use by the patient. Some involved, including wholesalers, brokers and parallel technologies currently used include specialised printing and traders. Parallel trade (Box 3) is international import of security inks, blister packs, hi-tech holograms, watermarks goods, occurring when versions of drugs are made for and tamper-evident packaging. Even the most sophisticated sale in different markets or when the same drug is priced holograms can be copied to look convincing to consumers. differently (UK prices are among the highest in the EU). However, importing and repackaging medicines through legal parallel trade often renders such measures ineffective. It stimulates competitive pricing of patented medicines but has been blamed for shortages. The British Supply chain management such as track and trace
Association of Pharmaceutical Wholesalers (10 technologies use unique identification numbers (for batches wholesalers supply 90% of the UK‟s medicines) and individual packets) to register product authenticity estimates that parallel traded medicines account for 13% against a database. Other technologies include 2-D barcodes, similar to standard black and white barcodes but of total UK drug sales, valued at £9-10bn. Such a large, with greater data storage capacity to include origin, lot complex, supply chain is difficult to secure. It is almost number and expiration date. Radio Frequency Identification impossible to track a medicine (in the case of a recall for (RFIDs) tagging, used by retailers for stock control has been example) to its origins when it has passed through trialled by the US Food and Drug Administration. It multiple handlers in numerous countries. Some advocates phasing them into the medicine supply chain. Some US companies tag „at-risk‟ products. Others supply companies believe that EU regulatory and enforcement pharmacies directly, which is complex and costly, but may capability has not kept pace with increasingly complex be necessary to protect revenue. There are concerns that this medicine trading mechanisms. Pfizer has responded to may lead to shortages. Where several wholesalers provide this by supplying UK pharmacies directly. Such schemes medicines, one can step in if another cannot fulfil an order. bypass intermediaries; other companies may follow suit. strategies (on legislation, enforcement, use of technology and sharing intelligence). It runs a web-based counterfeit Box 3. Parallel Trading in Medicines
reporting system and works with international agencies, Paral el traded medicines are purchased in one country and notably Interpol, the Permanent Forum on International then legally repackaged and/or relabelled and sold elsewhere Pharmaceutical Crime and the World Customs at a higher price. A single box of tablets may be handled by Organisation. They co-ordinate operations and train numerous intermediates before reaching the end user. Paral el trading is regulated by the European Medicines police and officials from customs and drug regulatory Agency and the MHRA. Repackaging and re-labelling is agencies in counterfeit sample handling and inspected by the MHRA but import and distribution takes identification. Initiatives between IMPACT and Interpol place outside the original manufacturer‟s supply chain. Pfizer have included "Internet days of action" to target illegal estimates that the number of parallel importing licences online sales as well as longer operations in 2008: granted for one of its products rose from 62 to 660 in 2006.  Operation Mamba raided 45 premises in Tanzania
and Uganda and seized 100 types of suspect Measures to Tackle Counterfeiting
medicines including anti-malarials and anti-fungals. Pharmaceutical Industry
Operation Storm in south-east Asia targeted
Industry tackles counterfeiting in three main ways: manufacturers/distributors of medicines identified as a  investing in overt and covert technologies to secure health risk (for pneumonia and childhood-related medicine packaging and supply chains (see Box 4); illnesses). After 200 raids, 16m tablets were seized.  investigating suspected counterfeit rackets and working with government agencies in and outside the The European Policy Response
UK to bring civil claims or criminal prosecutions; The European Commission outlined proposals to tackle  funding awareness campaigns to educate healthcare counterfeiting in 2006, and is likely to approve a professionals and the public about the dangers. Directive on falsified medicines in 2010. Proposals aim Adopting the technologies described in Box 4 is widely to prevent counterfeits entering the supply chain by: supported, but raises issues of costs and agreement on a  using mandatory safety features (such as individual harmonised system for use in the global supply chain. product codes or seals) for medicines deemed „high Pharmaceutical companies test drugs to identify risk‟, affixed by authorised manufacturers and replaced counterfeiting of their brands. This involves examining under strict conditions, allowing identification and packaging and forensic analysis of suspicious products. authentication by all involved in distribution. Companies bring prosecutions under civil law, to recover  more rigorous certification and inspection of assets acquired through criminal activity. Others work wholesalers, including audits and listing in a database with national agencies to instigate criminal proceedings. kept by the European Medicines Evaluation Agency.  tightening requirements for import of medicines and The International Policy Response
active pharmaceutical ingredients from outside the EU The WHO‟s International Medical Products Anti- and improvement of inspections and enforcement. Counterfeiting Taskforce (IMPACT) is a coalition of 193 The Directive is welcomed by industry although there is countries set up to promote international collaboration no agreement on which security features should be used and to publish guidelines for developing national or on how a system could be harmonised in the EU. It is postnote January 2010 Number 352 Counterfeit medicines Page 4
unlikely that any system would be operational before 2012 and unclear which medicines will be classed as Box 5. Consumer Attitudes to Online Pharmacy
"high risk" and whether this will cover all generic Pfizer, which produces the branded medicine Viagra, medicines. The European Federation of Pharmaceutical surveyed 935 men aged over 35. Men were surveyed since they are much less likely than women to access healthcare Industries and Associations is concerned that introducing services and more likely to purchase the types of medicines variable standards will result in less protected medicines that are commonly counterfeited. Key survey findings were: being targeted and wants the same standards applied to  1 in 10 bought POMs online without a prescription; all POMs. Critics argue that the proposals will succeed  50% purchasing medicines without a prescription did only if member states allocate adequate resources to so online (67% for those buying erectile dysfunction medicines) from sites in the UK and further afield; enforce them and there are steps to tackle counterfeiting  men did not see this as a high risk activity; outside Europe, where most production occurs. The EC  60% agreed that if it were possible that their medicine will expect member states to "monitor" online sales and was counterfeited it would influence their decision to take legal action against those selling illegal products. purchase POMs through the internet.
The UK's Policy Response
The MHRA‟s anti-counterfeiting strategy aims to make credit card companies could bar unauthorised sites from the UK a less attractive market to counterfeiters.6 The search results and impose extra checks on transactions.7 agency is seeking to raise tariffs for offences and a There is concern that health professionals lack awareness consultation on strengthening policy closes in March of the risk from counterfeits and cannot advise patients 2010. It keeps a watch list of high-risk medicines to on how to protect themselves from disreputable online inform intelligence and participates in international pharmacies or auction sites. The MHRA runs public initiatives. It has prosecuted offenders for crimes ranging awareness campaigns but has not yet targeted this group from illegal advertising to global counterfeiting rings. and there is little guidance for the medical profession Investigations are complex, especially when international from professional bodies. The Royal Pharmaceutical networks target weaknesses in national and international Society of Great Britain‟s accreditation scheme identifies supply chains. Recently, several prosecutions for legitimate pharmacy websites with a logo. Pfizer‟s distribution have been brought. Sentences ranged from a ongoing publicity campaign warns of the dangers of £1,000 fine to 6 years‟ imprisonment. The MHRA co- buying from unlicensed websites. The impact of these operates with police, Customs and Excise and Trading activities has not been assessed, but it is hoped that the Standards to prosecute using: public will undermine the counterfeits market by buying from reputable sources and reporting suspect medicines. the Medicines Act, where the maximum sentence is 2 years imprisonment and/or an unlimited fine; Overview
the Trade Marks Act and Proceeds of Crime Act with maximum sentences of 10 and 14 years respectively.  A wide variety of counterfeit medicines circulates globally, largely through unauthorised channels such Internet Pharmacies and Counterfeits
as online pharmacies, posing a public health risk. Online pharmacy offers improved access, choice and  The European Commission intends to strengthen convenience. Some value online anonymity over the medicine supply chains though a proposed Directive. possible risks of buying a counterfeit, particularly for This is unlikely to be enforced before 2012. Its impact embarrassing conditions (Box 5). The European Alliance on counterfeit production outside the EU is uncertain. for Access to Safe Medicines (EAASM) estimates that  The UK‟s Medicines and Healthcare products 62% of websites concealing their physical address supply Regulatory Agency is consulting on policies to improve counterfeits. It warns that buying from unauthorised the security of the regulated national supply chain. sources increases the risk of being supplied with them.  Progress is being made to raise public awareness of Several UK chains have legitimate online services to the risks of illegal online pharmacies and counterfeits. supply over-the-counter and POMs but counterfeiters Endnotes
exploit the online marketplace by producing sophisticated 1 websites that appear legitimate. They use search engine
2 World Health Organisation, advertising and spam emails to increase web traffic to
3 Pharmaceutical Security Institute, 4 OECD, The Economic Impact of Counterfeiting and Piracy, 2007 online stores. Dubious sites sell counterfeit POMs without 5 Community Customs Activities on Counterfeit and Piracy: Results professional advice or checks on their quality and at the European Border, EC Taxation & Customs Union, 2007 effectiveness. There is no legal recourse should problems 6 Anti-Counterfeiting Strategy 2007-2010, MHRA arise. Surveys in the US of brand infringement for six 7 The Counterfeiting Superhighway, 2008, European Al iance for POMs found 110,000 fraudulent sites and 2,986 online Access to Safe Medicines pharmacies. Most were hosted in the US, China and POST is an office of both Houses of Parliament, charged with providing Russia (12% in the UK). Estimates of annual sales independent and balanced analysis of public policy issues that have a basis in through such sites increased from $4bn to $12bn from science and technology. 2007 to 2008. Sites rarely required a prescription, POST is grateful to all contributors and reviewers. For further information on this subject, please contact Dr Sarah Bunn, at POST. declared fake accreditation or sold drugs at significant Parliamentary Copyright 2010 discounts compared with genuine sources. Users‟ details The Parliamentary Office of Science and Technology, 7 Millbank, London, were at risk since many sites did not secure transactions. SW1P 3JA; Tel: 020 7219 2840; email: [email protected] Websites hosted outside the UK are not regulated by the MHRA. The EAASM proposes that internet search and


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