19 May 2005
Public Safety Jeopardized by Chinese Counterfeiters, Experts Say
Fake pharmaceuticals contradict notion of "victimless" crime
This article is one in a series on U.S.-China economic relations.
Washington -- Chinese counterfeiters and other intellectual property pirates are hurting their fellow citizens and endangering public safety, the top U.S. intellectual property rights (IPR) official in Beijing says.
Although global efforts to combat IPR crimes tend to focus on the financial losses caused by piracy, the health and safety impacts can be significant, Mark Cohen, the U.S. Patent and Trademark Office (PTO) intellectual property attaché at the U.S. embassy in Beijing, said from his office. (See related article.)
"When babies die from eating counterfeit infant formula, or adults are killed in a car crash due to counterfeit brake pads or auto glass, how do we calculate the losses?" he asked.
Chinese counterfeiting of pharmaceuticals and other products affecting public health has grown in tandem with counterfeiting and piracy of goods such as brand-name clothing, compact discs and computer software. The production and sale of fake drugs is especially alarming to global public-health officials, who say that globalization has facilitated the spread of counterfeits beyond national borders and in some cases permitted contamination of legitimate drug supplies.
Exact data are impossible to collect, but the U.S. Food and Drug Administration estimates that counterfeits make up more than 10 percent of the global medicines market and account for more than $32 billion in annual sales. The FBI believes that more than half of the pharmaceuticals sold in China, Nigeria, Thailand, Cambodia and Indonesia are counterfeit.
Cohen and others say that developing countries suffer as much as, if not more than, developed countries from the production of counterfeit and pirated goods.
"Counterfeit pharmaceuticals are a major problem in many developing countries, where counterfeiters can more easily exploit legal loopholes or weaknesses in health care supervision and distribution systems to introduce counterfeit products into the local market," Cohen said.
According to the World Health Organization (WHO), a 2001 study undertaken in Mekong countries indicated that more than one-third of products supposedly containing the anti-malarial drug artesunate in Cambodia, Laos, Burma, Thailand and Vietnam actually had no active ingredients. A follow-up study in 2004 showed that the situation had worsened, with 99 out of 188 artesunate samples found to be counterfeit.
Moreover, WHO and the U.S. Centers for Disease Control (CDC) believe that substandard or ineffective medicines have contributed to the emergence in developing countries of drug-resistant strains of cholera, salmonella, tuberculosis and other diseases.
A 2003 report produced by Michele Forzley of the International Intellectual Property Institute (IIPI) at the request of PTO compiled data from numerous sources and found reports that more than 1,000 hospital admissions resulted from counterfeit insulin in Russia.
IIPI cited WHO information on the 1995 meningitis epidemic in Niger, where more than 50,000 people were accidentally inoculated with fake imported vaccines and an estimated 2,500 died as a result.
The report also said that consumers of counterfeit drugs tend not to know they are consuming dangerous or substandard products. "If a product is harmful or not effective, once it is consumed or used, often it is too late to prevent harm," IIPI said.
Counterfeits may also hurt people in ways that are not recognized as injuries in the "public health" sense but are in the common sense of the word, according to the IIPI. For example, if a woman were to take a counterfeit product labeled as birth control pills and have an unwanted pregnancy "it could be said that 'harm' occurred," the report says.
Injuries or deaths have also been linked to counterfeit automobile brakes, cigarettes, baby powder and washing powder, IIPI reported.
Countering the manufacture and distribution of fake pharmaceuticals and other products will require cooperation among industry, international organizations and governments, experts say.
"The problem of counterfeiting, to be properly addressed, requires a concerted action of all stakeholders," the Geneva-based International Federation of Pharmaceutical Manufacturers Associations (IFPMA) says.
China, as one of the primary global sources of counterfeit drugs, has begun taking steps to address the issue, particularly since its accession to the World Trade Organization in 2001. WHO said that in 2003 alone China's State Drug Administration closed 1,300 illegal factories and investigated cases of counterfeit drugs worth $57 million.
Multinational corporations are also moving to form partnerships with government agencies to protect both their own intellectual property rights and public health. The global pharmaceutical giant Pfizer Incorporated has signed two agreements in Shanghai -- one with the Municipal Food and Drug Administration and the other with the Administration for Industry and Commerce -- calling for cooperation between industry and government in the fight against fake drugs.
Under the agreements, the company will provide training and other support so that officials can go into areas of Shanghai to shut down operations manufacturing counterfeit pharmaceutical products.
"The goal is to reduce the amount of fake medicines produced in China -- recognized as the world's leading supplier of counterfeits -- thus improving patient safety by limiting the amount of those products available for export to other countries," according to a statement from Pfizer.
In 2004, the World Customs Organization (WCO) held its first global congress in Brussels, Belgium, and highlighted the public health implications of counterfeiting.
"The general public often views these infractions as 'victimless crimes' limited to luxury goods, a view which is sometimes also reflected amongst law enforcement authorities," WCO Secretary-General Michel Danet told meeting attendees. "However, we all know that counterfeiting not only harms the economy and society but can also seriously affect consumers and even kill them. Action is urgent," he said.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
