Counterfeit drugs imperil health and profits

By Andrew E. Kramer

Published: MONDAY, SEPTEMBER 4, 2006

MOSCOW: Time and again, Dr. Boris Merkeshkin pricked his patient's arms with a needle and injected a drug intended to alleviate high blood pressure. He did it for six months this year and his patients recovered smoothly.

They may not be so lucky next time.Merkeshkin, the chief physician at a large research hospital in Siberia, and his colleagues had been unknowingly administering roughly 3,000 doses of fake Cavinton. The drug, made in its genuine form by Gedeon Richter of Hungary, is one of the more common counterfeit pharmaceuticals circling in Russia, the police said.

"Thank God it was substituted with a medicine with no real effect on vital functions,"Merkeshkin said via telephone. "If that were not the case we would have a tragedy."

But counterfeit prescription drugs are proliferating in Russia, and indeed, in many countries, according to industry experts and the U.S. Food and Drug Administration.

Russians already adept at burning pirated DVDs, rolling their own Marlboro cigarettes and printing knockoff Nike T-shirts have turned to the more delicate art of making fake prescription medicine. And they are doing a very good job, experts say, cutting into the profits of pharmaceutical companies that are trying to tap growing demand inside Russia.

Experts

say fake drugs are being smuggled to Europe and the United States, the world's most lucrative prescription drug market. Drug counterfeiting is different from the production of low-cost medicines. Some developing countries, as part of a principled stance in a broader public health debate, will allow their manufacturers to make certain generic medicines, for example, for AIDS patients, without paying license holders. Counterfeiters, in contrast, operate illegally for profit.

The variety of fakes range from a crude mix of glue, chalk and sugar to nearly exact chemical replicas of complex pharmaceuticals, like Pfizer's Lipitor or the anti-impotence pill Viagra, both of which have been the targets of anti- counterfeiting prosecutions in Moscow.

Counterfeiters operate in India, China and elsewhere; Russia's underground prescription medicine market is distinguished for being at the forefront of a new trend of exceedingly high quality fakes.

Indeed, private investigators from Pfizer surveying the Russian market found fakes of exceptional quality - by the company's own admission.

"The counterfeits we got in the survey were the finest counterfeits I've ever seen," John Pheriault, vice president for global security at Pfizer and a former FBI agent, said by telephone. "The stuff we saw in the Russian market wasn't made in a garage. We don't know where it was made."

If they are good enough, doctors and patients there may not suspect or notice they are using fakes any more than their Russian counterparts.

"If the product looks like American product, how do you know where it came from?" he said.

In a statement to Congress in July, the U.S. Food and Drug Administration's associate commissioner for policy and planning, Randall Lutter, said that intercepted communications by customs officials suggested counterfeit prescription drug smuggling was on the rise; agents opened 58 cases in 2004, up from 30 the previous year.

Statistics on fake drugs are hard to come by. "The sophistication and precision of some counterfeit copies of legitimate drugs make a reliable estimate of the number of counterfeits impossible,"Lutter said, according to a transcript.

The Coalition for Intellectual Property Rights, an independent group, surveyed the Russian market in 2003 and found that 12 percent of pharmaceuticals were counterfeited, though local industry groups say the number is lower, perhaps as little as a fraction of one percent. Typically, pharmaceutical trade associations, which represent companies with reputations and sales that could suffer if information on counterfeit products became public, offer lower estimates. The World Health Organization has estimated that counterfeiting pharmaceuticals, on a global basis, is a $32 billion business.

Indeed, the industry is more worried about publicity over counterfeiting, on the fear that sales will fall if customers are alarmed by the prevalence of counterfeited medicine.

Companies do not usually disclose their discoveries of counterfeit versions of their pills, according to Cinthya Ramirez, a policy analyst at the International Federation of Pharmaceutical Manufacturers & Associations, a Geneva-based group.

"You can imagine the impact that it could have," Ramirez said. "People would be scared and they won't take their medicine, and would be ill. The question of information is very sensitive."

Industry groups like Boboshko's and other authorities are also at odds over how to enforce the law; the Russian government has played up several high-profile raids on backyard medicine shops astalks continue about their entry into the World Trade Organization. Boboshko says the raids are merely window dressing, for industrial scale producers continue to operate almost openly.

Meanwhile,