Trade in Counterfeit Pharmaceutical Products: A 2020 Report

The OECD and EUIPO released a new report on the Trade in Counterfeit Pharmaceutical Products. What can brand owners and companies take away from this growing threat for public health?

The Organisation for Economic Co-operation and Development (OECD) together with the European Union Intellectual Property Office (EUIPO) released a report in March 2020 about Trade in Counterfeit Pharmaceutical Products, highlighting the risk of fake medicines to public health.


Illicit trade in counterfeit and pirated goods is a significant and growing problem, having risen from 2.5% of world trade in 2013 to 3.3% in 2016. The pharmaceutical sector has proven to be a particularly challenging issue being a multi-billion-dollar industry, with global sales estimated at US$1.2 trillion in 2018 – a USD 100 billion increase from 2017. Moreover, the 50 largest pharmaceutical firms accounted for US$653 billion in sales in 2017, which represented slightly more than half the global sales of all companies.


The trade in fake pharmaceutical products

The report estimates the total value of counterfeit pharmaceuticals traded worldwide as being up to EUR4.03 billion. Antibiotics, lifestyle drugs and painkillers were the most targeted by counterfeiters while products for diseases such as malaria, HIV/AIDS, cancer, antibiotics, diabetes, epilepsy, heart diseases, allergy, blood pressure, stomach ulcers ailments as well as local anesthetics are targeted areas as well.


According to the report, the main producers of counterfeit pharmaceuticals are India, China, the Philippines, Vietnam, Indonesia and Pakistan with Hong Kong, the United Arab Emirates, Egypt, Cameroon, Turkey and Singapore acting as transit points.


Counterfeit products are mainly exported to European economies including the United Kingdom, France, Germany and Switzerland.  However, the United States is indicated as the country most affected by the trade. These Western countries are known for being the largest producers and suppliers of pharmaceuticals worldwide. The share of the United States in the global output of pharmaceuticals was 37.6% in 2016, making it the leading producer of pharmaceutical products and medicines across the world. It was followed by Switzerland (14%), Germany (8.9%) and France (6.8%).


The impact of fake pharmaceutical products

  • Estimates show that between 72,000 and 169,000 children may die from pneumonia every year after receiving counterfeit drugs, and that fake anti-malarial medication might be responsible for an additional 116,000 deaths.
  • One estimate suggests that the cost to EU governments of revenues foregone from counterfeit medicines is on the order of EUR 1.7 billion.
  • Unregulated criminal activity involving potentially toxic chemicals contributes to environmental pollution.
  • Increase in organised crime leads to job losses, which are estimated at more than 80,000 jobs in the EU pharmaceuticals sector and other sectors that sell goods and services to it.


Fake pharmaceutical products in the time of Covid-19

The trade in counterfeit pharmaceutical products is proving to be a more significant and growing threat. Criminals are cashing in on the coronavirus pandemic, as the public sees a rise in fake medical products related to Covid-19, reports Interpol.


According to a statement released by the OECD on the Coronavirus and the Global Trade in Fake Pharmaceuticals, governments need to take effective action to counter illicit trade, in medicines and in general, and support governance frameworks to lower the incidence of such trade.

“The sale of counterfeit and defective pharmaceuticals is a despicable crime, and the discovery of fake medical supplies related to Covid-19 just as the world pulls together to fight this pandemic makes this global challenge all the more acute and urgent,” said OECD Secretary-General Angel Gurría.


Next steps?

Governments, businesses and society are facing even greater challenges in today’s environment with heightened dangers due to the coronavirus pandemic. From loss of sales, damage to legitimate producers’ reputations, risks to public health and economic losses – effective policy implementation combined with for brand protection can help establish a cohesive response against fake pharmaceutical products.