Fake drugs impact so many aspects of society, it is hard to really wrap your arms around the problem. Public health, law enforcement, hospitals, drugstores and yes, even large pharma conglomerates. Pharmaceutical sales in Latin America are projected to grow nearly 12% per year through 2017. That makes it one of the most promising industries in the region.
What is the biggest problem facing pharmaceutical companies looking to capitalize on emerging markets in Latin America? No, it's probably not underdeveloped infrastructure or under-educated health-care providers. It is most likely illicit medicine, with Chinese counterfeit drug smugglers spanning out across the world's oceans.
Not only are fake drugs an issue for the legitimate pharmaceutical companies attempting to make inroads in Latin America, they represent a tragic public health problem. More than one million people worldwide die each year because of illicit medicine on the open market. That is moral problem and one that proper intellectual property infrastructure can help alleviate, even if just a bit.
Late in July, Colombian officials dismantled a criminal enterprise that was selling fake drugs and contraband medicine in legal markets. Some of those illicit medicines included treatments for brain tumors and HIV. Some drugs were manufactured in secret facilities, while others were smuggled across the border. No doubt, some came from East Asia and China.
Chinese counterfeit medicines are a problem in every corner of the globe. As Latin America grows its modern industries from biotech to Internet companies to the healthcare sector, the potential for cheap knockoffs in any business is going to grow as well. The negative economic impact of fake drugs is monumental; not only do you see damage done to revenues and profits of law-abiding companies, you see overall health-care costs spike as deaths and illness from unregulated medicines hit the population.
And Latin America should be aware that the illicit manufacturing could be happening in its own backyard. While the Chinese pharmaceutical industry is poised to grow nearly 27% over the next few years, fellow BRIC member Brazil is not far behind.
The planned Panama Canal expansion could provide more bandwidth for international counterfeit medicine smugglers to get their product into Latin America, according to Interpol. Apparently, maritime shipping lanes are a major source of drug smuggling.
If you look at this list of counterfeit drug facts from HealthResearchFunding.org, you find that the problem is much more pervasive than you might think. Pfizer, a large multinational drug company, does its own investigative work that can lead to dozens of convictions per year. That is necessary due diligence for emerging pharma companies in Latin America, such as Sanofi.
Without that commitment, the blow to profits and performance from Chinese counterfeit drugs will be detrimental to the industry's growth.
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