‘Made in India,’ Faked in China
Saturday, December 4, 2010
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.
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 antimalarials and antibiotics, too. Since Indian generics dominate many therapeutic categories of these markets, it is not surprising that they are the ones faked. 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.
Paul Orhii leads Nigeria's anticounterfeit drug agency and has seen this problem up close. He told us recently of the astonishing Chinese criminal counterfeiting drug networks his teams had unearthed.
The fake drugs lacked any of the correct active ingredient and, if it had been distributed, might have left untreated thousands of malaria-stricken children.
The networks are run from China and employ Nigerians and other foreign nationals. They have successfully infiltrated the entire supply and distribution chains from producer to patient across continents. Orhii said the criminal gangs either bribe employees of customs departments, or have their own personnel get jobs in places ranging from Nigerian and Chinese customs to the airlines that ship medicines overseas.
Each compliant official had responsibility at key parts of the distribution system, from manufacture in the Shenzhen free trade zone until the drugs arrived in Lagos, Nigeria's largest city and main port. In one instance, the drug traded was a fake of an Indian antimalarial drug, called Lonart DS. The proper drug is made by GVS Labs, of Mumbai, India. The fake lacked any of the correct active ingredient; had it been distributed, it might have left untreated thousands of malaria-stricken children. Fortunately, through routine surveillance work, this shipment was caught.
Orhii’s department has attempted to clamp down on those selling fakes from China; they now inspect factories exporting drugs to Nigeria. Such routine surveillance is important, and leads to occasional success. But criminals often manage to bypass such 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 antimalarial 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.
Roger Bate is the Legatum Fellow at the American Enterprise Institute. Tom Woods is president of Woods International.
IMAGE: The lower picture is of a fake antimalarial sample intercepted by NAFDAC, the Nigerian anti-counterfeit drug agency, before it entered the market in Nigeria earlier this year. It is supposed to be an Indian generic drug, but is a fake made in China and pretending to be made in India. It contains no antimalarial but does contain chalk and probably yellow road paint.
FURTHER READING: Bate researches “Do Aid Agencies Want to Know When Their Medicines Go Missing?” describes “Political Limitations to Combating Counterfeit Medicines,” questions “How Safe Are Your Medicines?” and suggests “Solving an Innovator’s Dilemma” on patent licensing.
Image by Darren Wamboldt/Bergman Group.