The Counterfeit Drug Trade: A Growing Transnational Problem

Posted By Meara Conway – Mar. 24, 2011

A report published by the International Policy Network indicates the annual $75 billion global trade in illegal, counterfeit medicine is responsible for the deaths of over 700, 000 people annually.¹ Ten percent of all medicines sold worldwide are fake medicines that are ineffectual or outright harmful.² In the developing countries of Africa, Asia and Latin America, this statistic more than doubles,³ and is as high as fifty percent in some.⁴ Canada is not immune. In 2005, for example, pharmacies in Ontario were discovered selling a counterfeit version of a blood pressure medicine, Norvasc, after eleven patients inexplicably died.⁵

A recent article in the Journal of International Criminal Justice published by Amir Attaran and Megan Kendall of the University of Ottawa and Roger Bate of the American Enterprise Institute in Washington outlines the current challenges in addressing the transnational counterfeit drug trade through national regulation.⁶ Pitfalls include insufficient regulation, unsatisfactory enforcement of existing regulations, lack of political will, the complexity of transactions, and ineffective cooperation between transnational communities. Moreover, the authors argue such efforts are ultimately limited as national authorities lack the ability to address the transnational nature of the counterfeit drug trade.

The rise of online pharmacies has exacerbated problems of jurisdiction. A Canadian Internet pharmacy, RxNorth.com, sold falsely labeled “Canadian” counterfeits to American and other global consumers, including allegedly life-saving medicines. While the source of such counterfeits was China, they were shipped circuitously through Hong Kong, the United Arab Emirates, Britain, and the Bahamas,⁷ thus concealing their origin and avoiding national jurisdictional authority. Other countries in the supply chain, including the United Arab Emirates, the U.S., the UK and the Bahamas did investigate and prosecute intermediaries, but lacked jurisdiction to pursue either RxNorth.com or its former CEO, Andrew Strempler. Although Strempler’s pharmacy license was revoked and he faced professional disciplinary action, he was never charged in Canada. Strempler now distributes generic drugs from an online pharmaceutical business in a free trade zone on an island off the coast of Venezuela.⁸ This example illustrates the need for a transnational effort to tackle counterfeit medicines.

In response to deepening concerns, some propose a treaty be drafted under the auspices of the WHO similar to the Framework Convention on Tobacco Control. The FCTC marks the sole occasion the WHO has exercised its treaty-making power. The preamble of the treaty in fact acknowledges a number of issues commensurate with the challenges presented by counterfeit medicine. The authors believe this mechanism would effectively tackle the issue in both developed and developing countries, providing cross-border measures that would address problems at their source.

[1] Julian Harris, Philip Stevens & Julian Morris, “Keeping It Real: Combating the spread of fake drugs in poor countries” (International Policy Network: 2009), online: <http://www.policynetwork.net/sites/default/files/keeping_it_real_2009.pdf>.

[2] André Picard, “Trade in fake medicines needs a global fix”, Globe and Mail (17 February 2011) at L6.

[3] Supra note 1.

[4] Criminal Intelligence Service Canada, Counterfeit Pharmaceuticals in Canada (Ottawa: Criminal Intelligence Service Canada, 2006) at 1, online:<http://www.cisc.gc.ca/pharmaceuticals/pharmaceuticals_e.html>.

[5] Ibid.

[6] Amir Attaran, Roger Bate, & Megan Kendall, Why and How to Make an International Crime of Medicine Counterfeiting J Int Criminal Justice mqr005 first published online February 10, 2011, online: <http://jicj.oxfordjournals.org/content/early/2011/02/10/jicj.mqr005.full.pdf#page=1&view=FitH>.

[7] Walt Bogdanic, “A Toxic Pipeline: Counterfeit Drugs’ Path Eased by Free Trade Zones”, New York Times (17 December 2007)online: <http://www.nytimes.com/2007/12/17/world/middleeast/17freezone.html?_r=1&pagewanted=print>.

[8] J Skerritt, “Online Pharmacist Eludes Ban: Strempler Moves Business to Caribbean, Manitoba Regulators can’t Stop him now”, Winnipeg Free Press(26 February 2010) online: <http://www.winnipegfreepress.com/local/online-pharmacist-eludes-ban-85460077.html>.