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Helping Americans Get The Truth About Prescription Drug Savings
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I have written extensively about how the pharmaceutical industry and its allies deceive the public by conflating the issue of counterfeit drugs with safe, more affordable prescription medicines that Americans purchase online and import for personal use. One of the industry’s main tactics is to make the counterfeit drug problem look as big as possible. They then falsely connect it to Americans buying legitimate meds online and as an excuse to oppose prescription drug importation in general. They do this through industry-funded groups and researchers.

A non-profit organization, funded by drug company Eli Lilly and other industry sources, called the Alliance for Safe Online Pharmacies (ASOP) has a page called “The Global Fight Against Illegal Online Pharmacies and Counterfeit Medicines.” It states: “Worth $200 billion a year, the market for counterfeit pharmaceuticals now eclipses almost everything in the underground economy, including prostitution, human trafficking and illegal arms sales.” On that same page, it goes on to report how ASOP is educating the public about “Canadian online pharmacies and drug importation” and “how the legalization of importation of prescription drugs from Canada and other foreign countries would endanger consumers by threatening the protections provided by the Drug Supply Chain Security Act of 2013.”

Where did that number, $200 billion come from?

It’s a vicious circle of seemed “authority.” Basically, a statistic appears in a seemingly authoritative article or even scholarly report. A citation appears with that statistic, but it is rarely checked or questioned because the authority is trustworthy enough. Then, the media sees that statistic and regurgitates it over and over and over again. In the case of this $200 billion figure, the story is no different.

In 2010, Reuters published an article called “Customs group to fight $200 bln bogus drug industry.” The story is largely about the work of the World Customs Organization signing a declaration to address the problem. It reads, “Counterfeit drugs have become a $200-billion-a-year industry and the 176-nation World Customs Organization (WCO) will sign a declaration later this month to fight the scourge, an official said on Thursday.” Soon thereafter, I started seeing this figure everywhere, popping up among industry sources and their warnings about online pharmacies and importation of medicine.

For example, the website of pharmaceutical company Eli Lilly pegs the counterfeit drug trade at $200 billion. It states: “Counterfeit drug sales generated an estimated $200 billion in illicit profits in one year alone.” Eli Lilly does not cite a source for the data.

In its section on counterfeit drugs, Sanofi’s website notes a $200 billion figure and it actually has a citation:

“World Economic Forum, Global Risks, Sixth edition, An Initiative of the Risk Response Network, 2011, p. 23. IRACM 2015.”

That World Economic Forum (WEF) report is about all kinds of threats to the economy, such as geopolitical, societal, technological, etc. Among those threats is illicit trade in counterfeit goods, including medicine. The report has a chart of the “rough” – their words — estimate of the market size of illicit goods, among them web and video piracy, cocaine, software piracy. The largest is for counterfeit pharmaceutical drugs, and sure enough the estimate is $200 billion.

But how did the WEF come to that number?

It was not WEF’s research. At the bottom of the chart it reads: “Source: Havocscope and experts.” That may not exactly seem promising as an authoritative citation, but even little-known organizations have conducted worthwhile research.

That’s not the case here.

That Havoscope figure comes from a page on its website that is titled Estimated Value of the Fake Drug Industry. It states: “The counterfeit drugs industry is estimated to be worth $200 Billion a year.” Go to the page. It seems to only exist for the purpose of propagating this statistic. I would have thought that this was some industry-funded research to justify this data point but no. In fact, coming full circle, Havoscope cites the aforementioned Reuters article from 2010, which as mentioned above does not attribute the dollar figure to anyone!

The $200 billion counterfeit drug figure, which first appeared in 2010, actually came on the heels of a 2005 estimate in a report by Peter Pitts of the drug industry-funded group Center for Medicine in the Public Interest: $75 billion. The report propagated the idea that drug importation to lower drug prices would help terrorists get to Americans through counterfeit drugs. It was called “21st Century Healthcare Terrorism: The Perils of International Drug Counterfeiting.” See it to believe it:

How did they get to $75 billion?

As I understand it, a person from the World Health Organization, speaking at a conference, estimated that the pharmaceutical market globally was about 10% counterfeit, another stat for which I have not seen actual research. The report by Peter J. Pitts applied that 10% estimate to projected global pharmaceutical market of $750 billion in 2010, and on that basis estimated $75 billion in the counterfeit drug market. That was the most prevalent stat regurgitated in the media on the scope of counterfeit drugs worldwide for a long time, until the $200 billion overtook it.

In 2016, WebMD’s Medscape, which is generally accepted as authoritative, noted a figure of $431 billion to quantify the counterfeit and substandard drug market, citing the World Health Organization as a source. Then, without any substantive connection, Medscape tied this to online pharmacies. Roger Bate, on the website of the American Enterprise Institute, wrote:

“One would expect more from Medscape than to provide propaganda for domestic pharmacy and pharma interests”

In 2017, the World Health Organization conducted a meta-analysis, a study of 100 studies that collected and tested pharmaceuticals in middle and lower-income countries and determined a market worth $30 billion in counterfeit drugs. That was only for lower and middle-income countries. But the conventional wisdom is that counterfeits make up less than 1% of drugs sold in high-income countries, which could not be more than $10 billion. Consequently, that report talked about the potential dangers of buying drugs online, which are real, but did not include tests of medicines ordered online in its actual study.

Earlier this year, a report by the Organization for Economic Cooperation and Development and the European Union calculated international trade in counterfeit drugs at $4.4 billion.