According to the WHO, counterfeiting has grown in recent years due to more sophisticated manufacturing methods and increasing global trade. An article in the Smithsonian reported that medical surveys were carried out between 1999 and 2003 to gauge the extent of the problem. The researchers purchased random samples of artesunate in Myanmar, Vietnam, Laos and Cambodia and found the volume of counterfeits increased in the period from 38 to 53%.

The volumes are much smaller in the US, but the problem is also increasing here. The number of cases of counterfeits investigated by the FDA jumped from around five per year in the 1990s to about 20 per year in 2001 and 2002, and some involved large volumes: in one case 200,000 bottles of counterfeit Lipitor were seized. FDA Commissioner Mark B. McClellan said in 2003 that while counterfeiting was once rare in the US, it is becoming more common and the criminal networks are becoming more elaborate, organized, and well-funded.

The retail value of diverted (stolen or grey market) prescription drugs in the United States is on the same order of magnitude as that of cocaine and is higher than that of marijuana. These drugs are mostly not counterfeit, but the size of this market shows the number of people willing to purchase pharmaceuticals from less-than-trustworthy sources. This is the kind of environment in which a market for counterfeits can thrive.

The crime of counterfeiting

The largest counterfeit drug networks are believed to be in China and India, but other major suppliers are in Southeast Asia, Russia, Nigeria, Mexico, and Brazil. The manufacturing and distribution rings are increasingly sophisticated, and there is widening involvement of organized criminal gangs such as the Chinese triads, Mexican gangs and the Russian “mafia”. Terrorist groups such as ETA, the IRA and Hezbollah have also been implicated.

The crime of counterfeiting medicines is becoming more widespread and affecting more types of drugs for several reasons: fakes are cheap and easy to manufacture, the financial rewards can be enormous, and the chances of being caught are slim. Counterfeiters aggressively try to avoid detection by engaging in elaborate conspiracies and ensuring major players remain well-hidden. They use forged documents to obtain ingredients and manufacturing equipment, and they set up fictitious businesses and front companies and exploit any weaknesses they can find in border controls. All of this makes detection extremely difficult.

A further problem in wiping out the crime is that penalties imposed are slight in most countries. For example, in the US most counterfeit drug cases are prosecuted under the Federal Food, Drug and Cosmetic Act, and penalties are mild under this act, with a maximum of only three years in prison. If they were tried under trademark laws the maximum would still be only ten years.