Counterfeit Drugs: The Good, the Bad and the Ugly

Abstract:     
When I chose the title, Counterfeit Drugs: The Good, the Bad and the Ugly, some of my colleagues at this symposium blanched. They understood counterfeit drugs as Bad and Ugly, but resisted categorizing any counterfeit drug as Good. This article is intended to be provocative, challenging some of the conventional wisdom concerning counterfeit drugs.

We start with the fact that reports about the scope of pharmaceutical counterfeiting are remarkably anecdotal rather than empirical. As a professor once chided me, the plural of anecdote is not data. The FDA and the WHO must undertake comprehensive market surveillance to establish the true scope of the counterfeiting problem.

We also must speak more clearly about counterfeit drugs, with an improved lexicon. It is misleading to pretend that safe and effective cross-border drugs from Canada are similar to contaminated water passed off as erythropoietin (Epoetin alfa) by criminal gangs. They have quite distinct causes, effects and indicated solutions.

Finally, and perhaps most controversially, this article identifies the underlying cause of drug counterfeiting as the legal system of intellectual property laws. We briefly explore alternative systems which would accomplish recovery of R&D expenditures without the patent rents which attract counterfeiting.

Number of Pages in PDF File: 15

Keywords: counterfeit, drug, pharmaceutical, intellectual property, trade

JEL Classification: I11, I18, K11, K23, K32, L65

Accepted Paper Series