Cracking down on the counterfeit drugs industry

The global pharmaceutical industry has a long history with the problem of counterfeit drugs. Well known products such as Viagra, baldness and wrinkles cures, painkillers, and even diet pills were the primary targets for those wanting to make large profits selling drugs that are often either ineffective, or are life-threatening poisons. The multi-billion-dollar sector is still fighting against this continuously growing threat, with counterfeiters now also targeting treatments for cancer, malaria, HIV and AIDS, costing pharma companies billions of dollars as well as putting the health of patients in danger. With the increasing advancement of technology, it has become even easier not only to manufacture drugs in makeshift labs, but also to sell and distribute to an ever-increasing volume of customers looking for cheaper alternatives to the high-price medicines they desperately need.  

One such example that has been widely reported in the US press over the past few years is the distribution of counterfeit prescription drugs (for example, Oxycodone and Xanax) containing an extremely powerful synthetic opioid – fentanyl. Fentanyl is from 25 to 50 times stronger than heroin[1] so, even if a drug containing a small amount of the opioid is abused (approximately 2 milligrams, or more[2]), the consequences can be life threatening. In cases where the drug has not killed instantly, users have suffered seizures, swelling of the brain and organ failure[3].

In a report published by the DEA in July 2016[4], during late 2013 and 2014 alone there were over 700 reported deaths that were related to fentanyl, and this number is believed to be underestimated, due to anomalies in various state techniques in reporting causes of death, as well as the attribution of deaths to heroin. This number is rapidly increasing; for example, the Massachusetts Department of Public Health reported in May 2016 that, for its state alone, of the 1,319 opioid-related deaths during 2015, 754 of them tested positive for fentanyl, where a toxicology screen was available.

But counterfeit pharmaceuticals containing lethal doses of substances is not the only threat to the industry. There have been several cases reported globally of prescription drugs containing either a small percentage of the active ingredient required to treat an illness, or no active ingredient at all. This has led to the symptoms in patients with illnesses such as malaria unexpectedly worsening, and often causing death, before doctors can identify that the root of the cause was an ineffective counterfeit drug[5]. Even health supplements are a target; authorities in New York investigated some of the top-selling herbal supplements at four retail giants – GNC, Target, Walgreen and Wal-Mart – and found that 80% of the supplements sold did not contain the medicinal ingredients listed on the label. Cease-and-desist letters were sent to the retailers in response to this investigation[6].

The Medicines and Healthcare products Regulatory Agency (MHRA) – the body that regulates medicines in the UK – has recently reported a spike in the number of seizures of abortion pills being bought online in the UK from unauthorized sources; a pill that could cause complexities, or even death, if not administered by a doctor under supervision. In 2013, just five pills were seized, but in 2016 that number had escalated to 375[7].

In a recent report published by NetNames[8], it has been found that the pharmaceutical industry is the worst-affected sector, by any metric, for counterfeit goods. Up to a third of the potential market – an estimated $200bn – is claimed to be made up of counterfeit goods, with an implicated death rate of up to one million people each year. Online pharmaceutical companies were found to be one of the main drivers behind the growth in counterfeit prescription drugs, and in 2013 almost 14,000 websites hosted by illegal online pharmacies were identified and shut down[9]. In a 2015 report published by the European Union, Europol, and the Office for Harmonisation in the Internal Market[10], an illicit online pharmaceutical company that was investigated by US authorities was said to have earned $55m in two years, confirming the scale by which counterfeiters can profit off concerns relating to the wellbeing of others.

In order to trade prescription drugs (as well as other substances) online with an extra element on anonymity, drug traders are moving into the ‘Dark Web’. One of the most popular marketplaces is AlphaBay, where a plethora of illegal products and services are available to purchase in exchange for BitCoins as well as other cryptocurrencies. However, marketplaces specializing in the illegal trade of potentially counterfeit pharmaceutical drugs are also in operation, such as ‘Valhalla’ and ‘24 Hours Premier Pharmacy Company’. Again, the drugs sold on these marketplaces are not regulated, and their use has been known to have severe consequences. A comment left by a buyer on AlphaBay who had purchased five 80mg Oxycodone pills wrote “these are WAY stronger than a regular Oxy. My girlfriend did a quater and had to have Narcan administered. A whole one of these thingswould kill an opiate naieve person. Be very careful” [sic][11].

But why are criminals turning to pharmaceuticals? The answer is simple: low risk and high reward. The penalties for trading in illegitimate pharmaceuticals are relatively weak when compared to narcotics. Criminals can make a lot of money by falsifying drugs that are in high demand and short supply, or are so exorbitantly expensive that consumers are forced to risk trying cheaper alternatives. Taking fentanyl as an example, the DEA reports that “Traffickers can typically purchase a kilogram of fentanyl powder for a few thousand dollars from a Chinese supplier, transform it into hundreds of thousands of pills, and sell the counterfeit pills for millions of dollars in profit.”

There are various measures now in place to help identify and monitor counterfeits. For example, the FDA developed a handheld device called the CD-3[12], which emits ultraviolet and infrared light onto the pills and packaging to determine if they are genuine. At $1,000 per device, this is a rather inexpensive solution, and is effective. With packaging also being susceptible to being counterfeited, the latest technologies in secure packaging provide another method through which companies are fighting the problem within the supply chain. From obvious counterfeiting deterrents such as holograms and security seals, to invisible markers and RFID tags, these countermeasures can be integrated into technologies such as electronic devices and database systems to enable manufacturers, distributors and government agencies to track and monitor the supply chain.

Since counterfeits can result in treatment failure or even death, it is essential for pharmaceutical companies to take immediate action to protect their brand assets from irreparable damage. In instances where products are being sold misleadingly and/or at heavily discounted rates to entice users to buy ineffective or potentially poisonous drugs, it might be appropriate for pharmaceutical brand owners to employ an online brand-protection solution including elements of: monitoring for, and analysis of, offers of sale (perhaps in addition to test purchases) to identify non-legitimate products; enforcement against infringing listings or websites; and online investigations to identify links between key players in the distribution chain.


[7] Medicines and Healthcare products Regulatory Agency

[10] 2015 Situation Report on Counterfeiting in the European Union, Europol and the Office for Harmonization in the Internal Market, April 2015, p.11