United Nations Report on East Asian Organized Crime: Criminal Made $5 Billion in Fake Drug Profits

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The United Nations Office on Drugs and Crime (UNODC) has just released their report on organized crime activities in East Asia. It shows counterfeited/ fraudulent pharmaceuticals are a growing source of profit for criminal gangs, and countries with lax enforcement are the biggest market fraudulent medicines.

Organized crime activities in East Asia are the subject of a comprehensive report by the UNODC entitled “Transnational Organized Crime in East Asia and the Pacific.” In the report they highlight the growing profitability of counterfeit drugs for criminal gangs, for whom drug counterfeiting is a $5 billion-a-year industry.

The report explains that although the numbers on fake drug seizures would lead one to believe most counterfeit drugs are bought and sold in wealthy countries, field and forensic testing has found that counterfeit drug sales are “mainly perpetrated where there is the lowest risk of detection, not the highest rate of return.” Countries with weaker health and safety enforcement, like those in Southeast Asia, can have fake drug rates of up to one third to two thirds of samples tested. The fake drugs are typically vital life-saving drugs, without which the patient will eventually die, like antimalarials and antibiotics.

Forensic testing on seized fake drugs can identify their origin, but the UNODC claims this is rarely done. However seizures and forensic testing have repeatedly identified China as the number one source of fake drug manufacture. The report cites a World Customs Organization statistic that 60% of counterfeit medical products seized between 2008 and 2010 were of Chinese origin. The UNODC points out however, that “the Chinese government is aware of the risks involved in a rapidly growing pharmaceutical industry, and has launched a number of campaigns to address abuses.”

UNODC describe the circuitous route fraudulent medicines can take on their way to market. They cite Tom Kubic, head of the Pharmaceutical Security Institute and PSM Board Member, who describes a 2007 incident where sweet, but poisonous, antifreeze was substituted for non-toxic glycerin in cough syrup in Panama. A Chinese factory produced and labeled diethylene glycol (antifreeze) as pharmaceutical grade glycerin. The fake glycerin was “sold to a Beijing brokerage company, which shipped it from Shanghai to another broker in Barcelona, who forged some paperwork and sold it on to yet another broker in Panama, resulting in at least 100 deaths.”

Many of the dead in this case were children who had unwittingly been given tainted cough syrup by their parents, reported the New York Times.

The UNODC report also points out that drug counterfeiting is like any other business in that fake drug criminals must adapt to meet changing demand. Fraudulent injectable cancer medications, which have a very high rate of return, have been found with increasing frequency over the last three years. They also mention an increase in treatments for diabetes being counterfeited, as well as counterfeit influenza vaccines appearing when flu season strikes.

By S. Imber

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