The drugs most often counterfeit in the United States are typically expensive ones used to treat high cholesterol, erectile dysfunction, high blood pressure, HIV/AIDS, and cancer. But counterfeit drugs can contain toxic ingredients that can cause significant health problems and unintended side effects. Because the drugs are not regulated by the FDA, the drugs can include the wrong active ingredients, no active ingredients, toxic ingredients, or ingredients in the wrong quantities. This effectively eliminates any beneficial qualities of the drugs and may even exacerbate a pre-existing medical condition by letting the condition go untreated.
The counterfeit drug market is one of the worlds fastest growing criminal enterprises. Pharmaceutical giant, Pfizer, claims that profits from the sale of counterfeit drugs surpass those made from heroin and cocaine. There are numerous reasons why the counterfeit drug market is flourishing, but Adam Smith, the father of modern economic theory, might suggest the reason is rooted in the fundamental concept of supply and demand economics. Globally, the demand for medication is astronomical while the supply is limited. This provides an ideal environment for counterfeiters to produce knockoff drugs. Due to the lack of regulation, the drugs often have improper ingredients. Since counterfeit manufacturers can essentially produce these drugs in their backyard with no overhead costs attributed to complying with safety regulations, the profit margins are extremely high.
Additionally, counterfeit drug manufacturers have greatly benefited from the proliferation of online pharmacies that sell medication directly to consumers. According to the National Association of Boards of Pharmacy, less than 3% of online pharmacies currently comply with state and federal standards. While certified online pharmacies provide many benefits to consumers, including convenience, consumers must be wary of online pharmacies that are too convenient or offer drugs at a greatly discounted price. Often, illegitimate online pharmacies will offer to sell prescription medication without a doctor’s prescription. These bogus and illegal online pharmacies generally sell drugs produced in foreign countries where the regulatory capacity for medications being sold abroad differs from domestic regulations. INTERPOL reports that over 100 countries were involved in the latest global strike on illegal online pharmacies. Such a large effort is required because often, the counterfeit drugs do not come from one country alone. In one case, counterfeit drugs were traced being moved from China, to Hong Kong, to Dubai, to London, to the Bahamas, back to London, then finally to the United States.
To protect the American public from the distribution of counterfeit drugs, the federal government has passed several laws under which counterfeiters can be prosecuted. The Food, Drug and Cosmetic Act (FD&C), first passed in 1938 and subsequently amended, takes aim at counterfeit drug manufacturers by making it illegal to introduce any drug into interstate commerce without the approval of the FDA. In the 1980’s Congress passed the Prescription Drug Marketing Act, which supplemented the FD&C by making it illegal for anyone, except a drug manufacturer, to import a prescription drug into the United States that was originally manufactured in the United States then sent overseas. Today, the federal government only allows two types of drugs to be legally imported: drugs manufactured by approved FDA facilities abroad, and drugs that were originally produced in the United States, shipped abroad, then reimported by the original manufacturer. Any drug manufactured in a foreign facility not inspected and approved by the FDA is illegal. However, the penalties under laws such as the FD&C for counterfeit drug manufacturing and distribution are generally not as harsh as those regulating narcotics. For example, 21 U.S.C. § 331(a)-(c) makes it illegal to introduce counterfeit drugs in interstate commerce. The maximum penalty for violating 21 U.S.C. § 331(a)-(c) is three years in jail and a fine of $250,000. On the other hand, under the United States Controlled Substances Act the maximum penalty for importing, manufacturing, or distributing narcotics can be as severe as life imprisonment.
Some legislators believe strengthening the criminal penalties for counterfeit drug production will help combat the problem. As of October 2012, the Counterfeit Drug Penalty Enhancement Act of 2011 is before the House Subcommittee on Crime, Terrorism, and Homeland Security. The Act seeks to impose stricter penalties under the current federal criminal code for trafficking counterfeit drugs. Recently, Congress passed the SAFEDOSES Act, which enhanced criminal penalties for stealing and altering prescription drugs. But will increasing the penalties for producing counterfeit drugs and rebranding prescription medication solve the problem?
However, increasing the criminal penalties for such crimes may be an ineffective way to combat the problem. Unlike narcotics, many counterfeit drug manufacturers can cut out the middleman by distributing directly to consumers through internet sales. Therefore, counterfeit drugs must be stopped at the source of production. However, there are inherent logistical difficulties with prosecuting international criminal conduct. It is difficult to conduct investigations in foreign countries because it requires a coordinated effort with the government of the foreign country in which the investigation will be conducted. Another potential issue is extradition. In some cases, the United States might be barred from pursuing criminals in particular countries. As a result, the federal government may be reluctant to allocate scarce resources to pursuing small-scale counterfeit operations in countries that are diplomatically uncooperative.
Nevertheless, in order to alleviate the counterfeit drug problem at home, the federal government should look abroad. According to the World Health Organization, only about 20% of the 191 member states have well developed drug regulation policies. Weak regulatory policies increase the distribution of counterfeit drugs on the global market. Additionally, many drugs made for export are not held to the same regulatory standards as those made for domestic use. Applying political pressure on foreign countries to increasing regulatory oversight and the standards to which exported pharmaceuticals are held may be a more effective remedy than increasing criminal sanctions at home.
However, there are measures that the FDA and other regulatory bodies can take to combat the problem within the United States. The FDAhas compiled an extensive list of ingredients that are most often substituted for real active ingredients in counterfeit medication. The most popular ingredients are then targeted for testing at the boarders in hopes of identifying and confiscating counterfeit drugs before reaching the marketplace. Another possible solution is to improve methods of identifying authentic medication so that counterfeit medication is easier to recognize. For example, unique identifiers are printed on currency to prevent the circulation of counterfeit bills. In 2010, the FDA implemented a similar system to track authentic packages of medication passing through the supply chain. Nevertheless, additional protections are needed since the problem of counterfeit drug distribution, especially over the internet, only continues to grow.
In sum, there are many factors that lead to the manufacture and trade of counterfeit medication––ineffective regulatory policies, poor government cooperation, weak enforcement measures, lax criminal penalties, disparities in economic strength, lack of awareness––the list goes on. But the judicial branch is a lightweight in a heavyweight fight. Increasing criminal penalties alone is likely not the haymaker that is going to knock out the counterfeit drug problem. However, for the sake of public health, hopefully the right combination of counter punches can be found to bring the counterfeit drug problem to its knees before it causes any more harm.
Jared EngelkingBlogger, Criminal Law Brief
Image courtesy of http://www.atg.wa.gov/PrescriptionDrugPrices/default.aspx#.UKFuj4UqmBQ