The Counterfeit Drug Market Is Closer Than We Think

In a reply to my post regarding fake anti-malaria medication, Marina touched upon an important issue in that the problem of counterfeit drugs is not only specific to the developing world, but it occurs right here at home as well. It reminded me of a segment from 60 Minutes that aired last March that highlighted this very problem.

Access to medicine is not just about providing treatment to those that need it most or cannot afford treatment otherwise, but it is also about obtaining the right treatment. In this context drug manufacturers are clearly driven by greed–whether its the US based company with outrageous prices which they refuse to reduce, or the counterfeit drug manufacturer abroad. What’s the bigger battle then? Is it the generic company that breaks patent law in order to provide cheaper medications or the counterfeit drug manufacturers that are harder to find if they are working out of their own apartments? To me, its the latter. I’d rather have generic drugs on the market that were quality checked rather than pills heated up in a microwave. The counterfeit drug market at the time of the video brought in about $75 billion dollars a year. Could this also be a reason pharma companies sometimes refuse to lower prices, since they are losing out on billions to the black market? The CBS 60 Minutes bit is worth a watch.  Here’s the transcript of the video in case it is more convenient for those of you that are interested.

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1 comment
  1. jaredb said:

    “Could this also be a reason pharma companies sometimes refuse to lower prices, since they are losing out on billions to the black market?”

    In response to this, I do not think the relationship between black market drugs and pharm pricing is that overt. Sure, the companies need to cover the cost of their secret agents who go uncover the black market drug products and clandestine factories at all corners of the globe, but it is a manufactured expense. The question that I would pose in retort is: If prices of drugs were not so high, would the demand for black market drugs continue? My hypothesis is that the exorbitant profits of the drug companies have inadvertently created a demand for less expensive, counterfeit or generic, products. The Pfizer agent in the video states: “The profit on illegal medicine is phenomenal.”

    While counterfeit drugs pose a danger to the consumer, they do not threaten the profits of pharmaceutical companies. “In FY 2010, Pfizer generated revenues of $67.8 billion and net income of $8.26B.” http://www.wikinvest.com/stock/Pfizer_%28PFE%29 This is a net profit larger than the GDP of 52 nations ranked by the IMF.

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