‘Made in India,’ Faked in China

China is implicated in key fake-drug rings recently broken up across the Middle East and Latin America. Beijing must do more to clamp down on the entire fake industry, which flourishes within its borders.

Roger Bate a Legatum Fellow at the American Enterprise Institute and Tom Woods President of Woods International write an excellent article in The American, the Journal of the American Enterprise Institute about the huge role that China is playing in polluting the pharmaceutical supply chains around the globe by producing massive amounts of fake drugs that often times with lethal consequences.

Mr. Bate, a long time favorite of Secure Pharma Chain, along with Mr. Woods once again provides insightful analysis into one of the most insidious and deadly crimes of the 21st century.

Highlights of The American article include:

• Chinese manufacturers are faking drugs, endangering patients' lives, and undermining legitimate brands, especially those from India. Indian companies provide vast amounts of generic drugs to mid-income and developing nations. By some estimates, 80 percent of HIV drugs for the developing world come from India, and probably half the anti-malarials and antibiotics, too.

• From the counterfeiters' perspective, faking Indian drugs makes sense. Even in those categories where Indian products do not dominate the market, they may still be copied. In part this is because Western brand owners are more likely to go after those faking their brands, whereas Indian drug makers have smaller margins and hence spend less on brand enforcement.

• Criminals often manage to bypass… inspections by inserting their fake versions further along the distribution chain. So more often tip-offs from underworld contacts, probably disaffected parts of criminal networks, provide the greatest likelihood of intercepting fakes.

• Of course, sometimes the fakes make it to market, often with lethal effect. In 2009, our Nigerian colleague Thompson Ayodele came across another fake of an Indian drug in a Lagos pharmacy, this time an antibiotic. Later, we found out it too had been made in China. It is impossible to know how many patients had taken this fake antibiotic before authorities were alerted.

• Chinese gangs do not discriminate—every major drug company and every country has probably had drugs faked by the Chinese. China is implicated in key fake-drug rings recently broken up across the Middle East and Latin America. In fact, Chinese operators will fake in or for any location and they will fake anything popular. Take Artesunat, the brand of a Vietnamese anti-malarial made by the Ho Chi Minh–based company Mekophar Chemical Pharmaceutical, which is also widely faked. Ongoing research shows that fake Artesunat was found in Nigeria, Ghana, Kenya, Uganda, Tanzania, and Thailand; and it was all the handiwork of Chinese counterfeiters.

• Beijing must do more to clamp down on the entire fake industry, which flourishes within its borders.

Clearly China has become the primary incubator and exporter of the counterfeiting drug trade which now stretches beyond the globe. China must do more to protect supply chains from a criminal act that can cause death and create health care catastrophes among entire populations. All members of the pharmaceutical supply chain must take proactive steps to interdict and eradicate these deadly fakes and protect the consumer.

To read Mr. Bate and Mr. Woods article, visit: http://www.american.com/archive/2010/december/made-in-india-faked-in-china

To learn more about pharmaceutical anti-counterfeiting technologies, visit: http://www.xstreamsystems.net/

Washington Post: India Becomes a Hub for Fake Medicines

India, the world's largest manufacturer of generic drugs, has become a busy center for counterfeit and substandard medicines.

Rama Lakshmi, in the September 11th issue of the Washington Post writes and outstanding expose regarding the state of the pharmaceutical supply chain in India.

Beyond the borders of India, this has become a significant concern given that India is the world’s largest producer of generic drugs and now has the dubious distinction as the largest exporter of counterfeit drugs around the globe.

India currently legitimately exports $8.5 billion of pharmaceuticals, mostly to African and Latin American countries, each year.

Lakshmi does an excellent job in personalizing the Indian counterfeit drug problem with stories of locals fighting and participating in the illicit trade, along with macro industry insight.

Highlighted in the Washington Post article:

• India, the world's largest manufacturer of generic drugs, has become a busy center for counterfeit and substandard medicines. Stuffed in slick packaging and often labeled with the names of such legitimate companies as GlaxoSmithKline, Pfizer and Novartis, the fake drugs are passed off to Indian consumers and sold in developing nations around the world.

• An expert says the global fake-drug industry, worth about $90 billion, causes the deaths of almost 1 million people a year and is contributing to a rise in drug resistance.

• Estimates vary on the number of these drugs made in India. The Indian government says that 0.4 percent of the country's drugs are counterfeit and that substandard drugs account for about 8 percent. But independent estimates range from 12 to 25 percent.

• Indian officials say the clandestine industry has hurt the image of India's booming pharmaceutical industry and its exports.

• The number of people arrested for manufacturing and selling fake drugs rose from 12 in 2006 to 147 last year, and drugs worth about $6.5 million were seized over this period.

• The tricks of the trade include sticking fraudulent labels on expired products, filling vials with water, stuffing small amounts of real ingredients in packages of popular licensed brands and putting chalk power in medicine packets.

• In June, officials at Nigeria's Abuja airport caught a shipment of fake antibiotics, containing no active ingredients, with a "Made in India" label. Nigerian investigators later said that a Chinese company shipped the drugs via Frankfurt. In a similar incident last year, a shipment of fake anti-malaria drugs from China arrived in Nigeria with an Indian tag.

• Last year, Sri Lanka banned imports from four Indian companies after officials discovered substandard medicine in shipments.

• Over the years, drug companies have used holograms or embossed their logo on the packaging to protect their brands, but these have also been counterfeited in India.

• Co-writing a report on a recent survey, Barun Mitra, Director of the New Delhi-based think tank Liberty Institute said that 12 percent of sampled drugs from the capital's pharmacies were substandard. "We are behaving like ostriches with our heads in the sand and pretending that nothing is amiss even as the problem keeps growing and affecting Indian patients."

Lakshmi ends the piece with a story about an encounter with a local drug counterfeiter:

On a recent morning in the northern city of Varanasi, a young man named Ashish waited for a shipment of painkillers and postpartum pills to arrive by train.

He said his order of pills that controlled postpartum bleeding contained chalk powder but came with the brand name Methergine in a Novartis package.

The painkiller had insufficient ingredients and carried a Bidanzen Forte label inside a knockoff GlaxoSmithKline package.

"There is a lot of profit in this," said Ashish, 28, describing the extent of counterfeit drugs in Varanasi. He declined to give his surname because his operation is illegal.

"I do not think about right or wrong," he said. "I am not killing anybody. The worst is that these medicines will not show any result and the patient may have to check into a hospital."

In a growing global supply chain and with India's pivotal role in it, it is imperative that the regulatory and the individual members of the pharmaceutical supply chain's become proactive in dealing with drug counterfeiting a criminal act that impacts the health and well being of millions all over the globe.

As this story illustrates, because of their sophistication, drug counterfeiters can easily adapt to packaging centered anti-counterfeiting solutions, what they cannot do is account for authentication of the product while it is in its packaging.

Verification of the product inside its sealed container is the most effective way of protecting the supply chain and the consumer from this deadly crime.

To read the entire Washington Post story, visit: http://www.washingtonpost.com/wp-dyn/content/article/2010/09/10/AR2010091006700.html.

To learn more about authentication, anti-counterfeiting technologies, visit: http://www.xstreamsytems.net/

Airlines Warned About Counterfeit Drugs

Aviation India a publication that services the Indian civil aviation industry is reporting that large consignments of fake Indian drugs manufactured in China are finding their way to Nigeria.

The Nigerian authorities are apparently warning airlines that they would be held responsible for spurious drugs carried by passengers flying into that country. The warning was issued by the NAFDAC following complaints from Indian pharmaceutical manufacturers.

Given the severe epidemic and deadly impact on the population due to counterfeit drugs necessitates the Nigerian Government taking extreme actions to thwart this deadly criminal act.

Hopefully commercial interests and industry will be part of the solution in eradicating this global blight.

To learn about pharmaceutical supply chain security technologies, visit: http://www.xstreamsystems.net/.