Drug theft costs industry up to $1bn a year

By Katrina Megget

- Last updated on GMT

Related tags Pharmacology Pharmacy

Pharmaceutical companies not only have to face the consequences of
a burgeoning counterfeit drug black market but have to contend with
the theft of their own manufactured drugs for illicit uses,
according to a US consumer advocacy group.

Known technically as diversion, the practice was "very common" and "a big problem" , costing the pharmaceutical industry up to $1bn (€0.7bn) a year, Americas Watchdog told in-PharmaTechnologist.com "While it could be an employee, as often it's the subcontractor manufacturer - say as an example, in China, agreeing to make one million Viagra pills and then making 1.5 million pills and selling the extra 500,000 on the black market," Americas Watchdog president Thomas Martin said when contacted.

While diversion was a big problem for the industry, Martin said the $1bn lost per-year was nothing compared to this year's estimated $70bn counterfeit drug industry.

Earlier this year, Americas Watchdog launched the covert operation-like Global Piracy and Counterfeiting Consultants initiative, with the aim of stamping out the international counterfeit market.

The group was worried about the monetary affect on the drug giants' back pockets as well as the patients who could be harmed by taking drugs that were fake or taking diverted drugs without the advice of a doctor, Martin said.

Meanwhile, the incidence of fake internet pharmacies to peddle the illegal drugs was increasing, he said.

"Instead of selling diverted product to the pharmacies most product is being sold direct on the internet.

The problem is getting worse."

With seller anonymity practically guaranteed, upgraded technology and sophisticated means to distribute the drugs, internet pharmacies were becoming an increasingly attractive option for the black market as unassuming patients sourced cheaper drugs without a prescription.

Martin, who was mainly concerned with the impact of counterfeit drugs, said diversion was still a problem, though not often discussed.

"[Diversion] is very common.

While the actual drug makers have good safeguards in place to control inventory or products, the sub-contractors or the counterfeiters can pretty much do whatever they want.

"The pharmaceutical companies are taking diversion seriously . . .

The drug companies, to their credit, are doing all kinds of things to crack down on diversion.

They are repackaging product with electronic strips to track the product from manufacturing to the pharmacy, they are doing a much better job on inventory control, so I think on diversion they are trying."

Pharmaceutical Research and Manufacturers of America (PhRMA) were unavailable for comment at time of publishing.

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