Illicit Trade in Pharmaceuticals

Illicit trade in counterfeit pharmaceuticals is a US$ 200 billion per year industry (Irish, 2010) that not only has a direct negative impact on consumer health and safety, but also results in increased government health care costs as well as costs associated with regulation and enforcement. For the pharmaceutical industry, the illicit trade in counterfeit medicines results in lost sales and revenues, liability and reputational damage, and costs associated with the need to ramp up security and adopt new ways to track and trace their legitimate products. The World Health Organization estimates that the share of counterfeit medicines on the market range from less than 1% of total sales in developed countries to over 10% of total sales in developing countries (WHO, 2006). There is also evidence of a shift among organized crime groups from smuggling narcotics and weapons to counterfeiting medicines, possibly even with terrorist organizations (UNODC, 2009).
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In addition to counterfeit pharmaceuticals, the trade in substandard drugs, which contain too much or too little of the active ingredient, may be contaminated, may be poorly packaged or fail to meet quality standards in other ways, with potentially severe consequences (WHO, 2005), is a major concern. The use of substandard drugs not only prevents treatment, it can also promote the development of drug resistant strains, in turn decreasing the effectiveness of legitimate medicines, raising costs for patients and healthcare systems, and causing reputational damage to business.

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