Impact of Counterfeits on Pharmaceutical Industry - Counterfeiting Poses Threats to Patient Safety and

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Counterfeiting in Pharmaceuticals has become a Global Program and Almost no Country is Immune to it

Even though the extent of counterfeiting and its harmful consequences are more concentrated in developing and poor countries, it is not exclusive to them. Counterfeiting of pharmaceuticals is increasing all over the world, and has breached the legitimate drug supply chain in many countries, including the US. The US FDA estimates that more than 10% of the global medicines are counterfeits, and these are present in both developed and developing countries. In some countries, more than 50% of the drug supply is made up of counterfeit drugs. The incidents of seizure of counterfeit medicines are rising each year and affecting the various regions of the world, as shown in the figure below.

According to the data from PSI, in 2009, Asia and Latin America were the top regions that most often encountered incidents of counterfeiting of pharmaceuticals, followed by Europe, North America, Eurasia, the Near East and Africa.

The countries of Europe and North America that have effective law enforcement and strict inspection programs by various drug regulatory agencies could not escape from the attack of counterfeiting. The countries that have the highest number of incidents are not necessarily those with weak regulation and low law enforcement, although it may also indicate the efforts taken by the government and national organizations to fight against counterfeiting. At the same time, countries which seemingly have low incidence of counterfeiting are not necessarily safe or at lower risk of counterfeiting of pharmaceuticals, but due to weak law enforcement, lack of political will, lack of funding and inadequate regulatory structures, the act of counterfeiting often does go unrecognized in certain parts of the world.

In certain developing countries, counterfeit medicines are available for almost all diseases, ranging from children’s cough syrup to antimalarial drugs. The condition is worse in poor countries where the legal and regulatory oversights are the weakest, and counterfeit medicines are available to treat certain life-threatening conditions such as malaria, tuberculosis and HIV/AIDS. Therefore, the counterfeiting of pharmaceutical products is a very serious issue and collective efforts from various levels are necessary to combat it.

Price Differences among Various Countries Encourage Parallel Trade in Pharmaceuticals

Parallel trade in medicines becomes the most debated issue in the healthcare realm due to its beneficial and adverse effects. Various factors encourage the parallel trade in pharmaceutical products, and the most important among them is price differences across various countries. Price differentials may exist due to government price control policies, or drug manufacturers may impose different drug prices to incur the maximum profit that a market can bear. The parallel import of pharmaceuticals mostly occurs in countries when price difference is significantly high, as potential gains obtained by parallel trading are large enough to compensate for the transaction costs, including shipping costs and complying with customs regulations. The availability of multiple importation options to source the medicines at cheaper rates and the supportive legal framework in many countries significantly contribute to the parallel trade in pharmaceuticals. 

Counterfeiting of Pharmaceuticals and Parallel Trade of Medicines has a Significant Impact on Legitimate Drug Supply and Patient Safety

Counterfeiting of pharmaceuticals can pose a serious threat to patients in terms of direct harm, treatment failure, or drug resistance cases, all of which can seriously affect patient safety. Drug manufacturers also suffer from counterfeiting of pharmaceuticals and experience loss of market share and revenue. The brand integrity is seriously affected and often companies have to bear the cost of products recalled to prevent any further harm from counterfeit versions of their products. Moreover, national government too cannot escape from the serious adverse effects of counterfeit medicines, such as increased law enforcement costs, loss of foreign investments, and increased burden of public healthcare crisis.

Parallel trade of medicines has raised several issues due to its significant impact. The practice of repackaging in the parallel trade may pose serious threats to patient safety due to human error during packaging, and may affect the product stability. The industry claims that they lose a considerable amount of revenue due to parallel trade, and this deprives the incentive to invest in R&D. Parallel trade may hinder the product recalls and may act as a vehicle for the entry of counterfeit medicines into the legitimate drug supply chain.

GBI Research, the leading business intelligence provider, has released its latest research, Impact of Counterfeits on Pharmaceutical Industry - Counterfeiting Poses Threats to Patient Safety and Revenues of Pharmaceutical Companies.The report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts.The report provides in depth analysis and information on the rising threat of counterfeit medicines all over the world. The report also provides the global scenario of counterfeit medicines and gives comprehensive information about access points of counterfeit medicines in the legitimate drug supply chains. Furthermore, the report provides an account of factors encouraging the counterfeit medicines and discusses the global initiatives and technologies used to detect and prevent the counterfeiting in pharmaceuticals. This report also provides a comprehensive insight about the parallel trade in Europe and in the US and also discusses factors that encourage the parallel trade in pharmaceuticals, and provides information about the parallel trade policies in Europe and the US. Furthermore, the report also offers a comprehensive analysis of the impact of counterfeiting and parallel trade.

To purchase the report and for further information go to:

About GBI Research

GBI Research is a leading business information company providing global business information reports and services.

Our highly qualified team of Analysts, Researchers, and Solution Consultants use proprietary data sources and various tools and techniques to gather, analyze and represent the latest and the most reliable information essential for businesses to sustain a competitive edge.


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