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5 J. Fin. Crime 7 (1997-1998)

handle is hein.journals/jfc5 and id is 1 raw text is: Counterfeit Medicines: Strategies to Deal with a Commercial Crime D. C. Jayasuriya BACKGROUND In the wake of the 1988 United Nations Conven- tion against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, attention has come to be focused on money laundering. Several developed, and some developing, countries now have in place legislative and other control measures designed to enable information to be collected and to facilitate investigations with regard to investments and transfer of funds above a certain monetary limit; to confiscate assets purchased with the proceeds from the sale of controlled drugs; and, to impose strin- gent jail and other sentences on persons contra- vening the applicable drug or banking laws. While precise estimates are not available because the illicit drug industry operates outside the recog- nised or official national economy, it has been sug- gested that the illicit drug industry's annual turnover is approximately US$500bn.' The annual income of the Colombian drug cartels, for instance, is estimated at US$4bn; out of this amount, some US$lbn is fed back into the domes- tic economy. One-third of the country's produc- tive land is presumed to belong to drug traffickers. The construction boom in Cali, resulting in luxury apartments, hotels and office complexes, recorded a phenomenal 37 per cent growth between 1992 and 1993.2 To take another example, in Peru, where the land under illicit coca cultivation has increased by about 40 per cent since 1990,' some half a million of the 7 million labour force are estimated to be involved in illegal drug-related employment. COUNTERFEIT MEDICINES Another equally ubiquitous problem with far- reaching public health and socioeconomic implica- tions, but which has hitherto attracted much less visibility, is the counterfeiting of pharmaceutical medicines. It is a problem that is fuelled by cor- rupt practices aimed at defeating all controls in place and undermining the legitimate pharmaceut- ical industry and drug supply and distribution system. As is the case with precursors which are diverted from licit sources into the illicit manu- facture of narcotic drugs and psychotropic sub- stances, manufacturers of counterfeit medicines often divert starting materials from licit sources. They have recourse to various illegal means to introduce their products into the legal supply and distribution channels. A counterfeit medicinal product is one that is 'deliberately and fraudulently mislabelled with respect to identity and/or source'.4 Counterfeit products may include products with the correct ingredients, wrong ingredients, without active ingredients, with incorrect quantity of active ingre- dients or with fake packaging. Both prescription and over-the-counter medicines, as well as bran- ded and generic products, have been and are being counterfeited. The problem affects countries with highly developed medicinal products' regulatory systems as well as those with relatively rudimen- tary or ineffective systems. During the past decade, counterfeit medicines have been reported to the World Health Organization (WHO) by over 40 countries.' Since many developing countries have limited laboratory testing facilities, and some mul- tinational drug manufacturers do not have a presence in these countries except through an importing agent, it is easier for counterfeit medi- cines to circulate within the drug distribution system of such countries without ever being dis- covered. The thalidomide disaster of the 1960s still con- tinues to haunt our memories of possible adverse consequences associated with medicinal products. The disaster led to the emergence, particularly in countries with highly developed drug regulatory systems, of an entirely new regime of control measures structured around the clinical evaluation of the safety of drugs. What is perhaps less known is that the more recent tragedies brought about by counterfeit medicines make the thalidomide dis- aster pale into insignificance. Deaths of hundreds of people who had taken © Emerald Backfiles 2007

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