«VOLUM E 1 1, N UM B E R 1 I S SN 2 1 6 8 - 0 6 1 2 F L ASH DR I V E I S SN 1 9 4 1 - 9 5 8 9 ON L I N E T h e In s t it ut e f o r Bu s i n e s s an ...»
GCBF ♦ Vol. 11 ♦ No. 1 ♦ 2016 ♦ ISSN 1941-9589 ONLINE & ISSN 2168-0612 USB Flash Drive 305 Global Conference on Business and Finance Proceedings ♦ Volume 11 ♦ Number 1 Dr. Boumediene has been publishing his research work in academic journals, such as the Journal of Applied Business Research and the International Journal of Business and Finance Research, among others. Dr.
Boumediene published a book on statistical characteristics and quality of accounting information in 2013.
E. Boumediene has a PhD in business administration (Accounting) from the University of El Manar, Tunisia. Dr. Boumediene is assistant professor in the department of Accounting and finance at ISCAE, La Manouba, Tunisia. Dr. Boumediene teaches both financial and managerial accounting in undergraduate and graduate levels. She also taught courses for the preparation of Certified Public Accounting exam. Dr.
Boumediene has been publishing her scientific research in academic journal and published a book on financial statement.
I. Amara has a Master degree in accounting from the “High Institute of Accounting and Business Administration” (ISCAE), La Manouba. She received her Bachelor degree from the ISCAE with honors.
She has been a research assistant at the ISCAE.
GCBF ♦ Vol. 11 ♦ No. 1 ♦ 2016 ♦ ISSN 1941-9589 ONLINE & ISSN 2168-0612 USB Flash Drive 306 Global Conference on Business and Finance Proceedings ♦ Volume 11 ♦ Number 1
Nowadays, counterfeit drugs are available in the market more than ever. One has no idea whether they are acquiring the genuine drug or not. Many deaths have occurred because of mistakes made while purchasing the counterfeit medication. Not only does it alter one’s health but it also crushes their hopes. The data concerning counterfeit drugs are increasingly being published in reports and reviews. It seems like government does not care about the issue since it is ongoing and growing.Governments seem to underestimate the importance of the issue, hence its growing prospect. Harsher sanctions are needed to prove that counterfeiting is not an unpunished crime. Whoever gives into that felony has to face the consequences that come along with breaking the law and possibly participating in harming and endangering one’s life.
JEL: I10, I18, I19, K20, K42, F19, F23 KEYWORDS: Medicine; Counterfeit Drugs; Generic; Regulation
INTODUCTIONOver the years, the world as we now know it, has witnessed great progress. But with progress comes many issues. One issue of great consequences is pharmaceutical counterfeiting. Pharmaceutical counterfeiting stands for fraudulently producing or mislabeling medicines that are being purchased by consumers who believe them to be genuine. The illegitimate drugs can cause many serious health complications. Packaging these drugs are also identical to the legitimate ones, making it extremely difficult to distinguish them. But when one looks closely into their chemical formula, he/she notices that the ingredients were most likely misused. Counterfeiting does not only target brand-names but generic ones as well. Medical devices and medical-related products do not escape this problem. Counterfeiting has not only increased but has also targeted terminal and incurable diseases, giving people a prospect of an affordable and easy to get solution.
On one hand, it raises people’s hopes and gives them something to hold on and look forward too. On the other hand, the outcomes are unpredictable since no one knows what the components really are.
Counterfeiting is an issue that is looking to dominate the pharmaceutical world. With its low cost and easy access, more individuals turn to the illegitimate drugs for salvation. This paper proceeds as follows. Section 2 presents a brief overview of literature. Section 3 presents an analysis of the situation. Section 4 presents a path forward. Section 5 concludes.
One way to fight counterfeiting is to send the supposedly fake drug to the original maker and have them analyze it. Many renowned companies employ undercover detectives to help them track down and find out who is counterfeiting their drugs. Those detectives then share the information they found with each other since they are all fighting the same crime and criminals. Pfizer, which is the world’s largest drug company fights continually concerning the safety of their trademark since their products are the most counterfeited.
During 2010, counterfeited drugs generated about $75 billion (Gillette (2013)). Counterfeiting does not GCBF ♦ Vol. 11 ♦ No. 1 ♦ 2016 ♦ ISSN 1941-9589 ONLINE & ISSN 2168-0612 USB Flash Drive 307 Global Conference on Business and Finance Proceedings ♦ Volume 11 ♦ Number 1 only effect the economy but also people’s lives. Each year, about 100,000 million people worldwide may succumb to these fraudulent medicines. Some pills sometimes contain chalk, brick dust, paint, and even pesticides. Some of them even contain the remains of human fetuses. Others contain no active ingredients at all. Miraculously enough, the fake medications sometimes do actually work (Gillette (2013)). According to OseiTutu (2013), one form of the distribution of counterfeit pharmaceuticals into the hands of public is through the illicit drug trade. Individuals that traffic in the distribution of illegal drugs such as cocaine or heroin may also choose to enter the counterfeit medicine trade. Evidence shows that some counterfeits are as deadly as the illegal substances.
When one hears about how much profit is made out of fictitious drugs, he/she wonders how they get their hands on them. One way is the internet. Since its creation, the internet has only grown and been accessed all over the world. Finding fake drugs online is as easy as typing something on the computer. Specialized websites offer hundreds of drugs for whatever illness one has. Even website like “Craigslist” do suggest fake drugs. Counterfeiters play one patients’ feelings to get them to turn to them. People do feel some embarrassment and shame when it gets to some parts of their health and they would much rather order their medication online in the intimacy of their own home. Another way to get customers is their unbeatable prices. In fact, anyone would prefer to pay $1 rather than $15 per tablet.
In fact, the number one driver for the purchase of counterfeit drugs is price. One study of 144 American students showed that the perceived legal and social risk or societal consequences did not influence the intent to purchase counterfeit goods. In many cases, consumers of counterfeit drugs feel they are ‘getting away with something.’ They feel the discounted price they pay is somehow ‘getting even with the large pharmaceutical companies,’ for the prices they charge. High drug costs drive Chinese consumers into the counterfeit marketplace, especially in rural areas. Chinese officials are more prone to ignore the activities of drug counterfeiters and in fact may aid the production of fake medicines supported by corruption in both the police and military (Bird (2008)). In addition, the deception of websites offering pharmaceuticals runs wide and deep. A recent study funded by the Food and Drug Administration found that of 11,000 purportedly “Canadian” websites, only 214 were actually registered in Canada. Websites may contain logo’s, company symbols, national flags, etc. in attempt to legitimize their presentation. It’s also important to note that even drugs shipped through countries such as Canada are not subject to those countries’ safety requirements if the products are not for domestic consumption. From a business perspective, the transportation of counterfeit pharmaceuticals is an act of trade (Liang (2008)).
Detectives investigate counterfeited pharmaceuticals by looking at the small leads that would eventually take them to the “big fish”. For that purpose, criminals resort to the express mail service to get their drugs wherever they need to be. Bigger the package, smaller the odds of inspecting it. Once the package reaches its first recipient, usually a drop shipper, then unwilling! serves as an intermediate between the original sender and the customer. The reason behind this is to not scare off the customer if the package is searched.
Drop shippers are the ones that usually use “Craigslist” to make more money on the side, without thinking about the consequences. Asia is leading in counterfeiting, especially China. It is not surprising that counterfeiting is this prominent since the laws against it are very weak. Criminals do not fear the consequences hence there are more of them.
Counterfeiters pay attention to every detail to make sure that their drug would look very similar to the original one. Because of how much thought they put in it, many licensed distributors are not able to distinguish between the real drug and the fake one. It is tough to evaluate the severity of the issue because of the lack of resources available to detect counterfeited medicines, the different definitions of counterfeiting around the world and the variation in the distribution system (World Health Organization (WHO) (2010)). To try and assess the problem’s gravity, WHO (2010) sent on a questionnaire to a handful of countries. Only 13 countries out of the 22 in the WHO Regional Office for Eastern Mediterranean region (EMRO) responded. They found out that only 3 countries in EMRO have distinct legislation on counterfeit GCBF ♦ Vol. 11 ♦ No. 1 ♦ 2016 ♦ ISSN 1941-9589 ONLINE & ISSN 2168-0612 USB Flash Drive 308 Global Conference on Business and Finance Proceedings ♦ Volume 11 ♦ Number 1 medicine.
They also discovered that 23 countries would welcome a specific legislation on counterfeit medicine (13 from WHO Regional Office for Africa (AFRO); 10 from EMRO). Unfortunately, information on counterfeiting is rarely shared with other National Medicines Regulatory Authority (NMRA) or WHO.
Some recommendations were made, stating with Member States developing a specific legislation that empowers NMRAs and criminalizes counterfeit medical products. Second, proposing that information should be shared between NMRAs and police and customsl. Joining efforts will increase the odds of lessening counterfeiting. Third, declaring that Single Points of Contact (SPOC) should be established to facilitate exchange of information on counterfeiting at regional, national and international levels. Fourth, saying that Member States are encouraged to declare cases of counterfeiting to WHO and INTERPOL.
Fifth, proposing that pharmaceutical trade in free zones should be controlled by legislation. And finally, suggesting that information on counterfeiting should be shared with other NMRAs and law enforcers within the country (WHO (2010)).
Counterfeiting is underestimated crime wise even though it makes billions of dollars annually and is harmful to one’s health and the society as a whole. The illicit pharmaceutical trade usually occurs with postSoviet organized criminals, Columbian drug cartels, Chinese triads, and Mexican drug gangs. Hezbollah and al-Qaeda are believed to be involved. It proves that counterfeiting is not assigned to one special country or part of the world. It originates from all over the world, especially from the “rough” areas. Counterfeiting provides jobs in the roughest areas of Asia such as China and India. Private entrepreneurs, state officials, and online criminals play an important role as facilitators of counterfeiting. The internet advertises counterfeiting trough spams. Out of all the criminals that are involved in counterfeiting, only 1,300 people worldwide were arrested. Over half of the arrests occurred in China. So with so few arrests potential traffickers are likely never to get caught (Shelley (2012)).
About 2 billion consumers worldwide purchase counterfeiting medicine and fall victim to its dangerous consequences. Between 1999 and 2008, counterfeiting revenues increased by $8.2 billion per year (Shelley (2012)). Poverty plays a major role in counterfeiting. Fake drugs are very affordable, making it easier for needy people to get to them. One of the most important consequences to fake drugs is that most people tend to develop drug-resistant strains of the deadliest diseases. It was also discovered that licensed pharmacists use counterfeited drugs to make more money, selling them to customers as genuine. No one is willing to confront and address the issue, which is ongoing and still growing.
Online acquisition of counterfeit pharmaceuticals through the Internet has become much more pervasive.