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BEHIND THE HEADLINES: Keeping an eye on fake goods


BEHIND THE HEADLINES: Keeping an eye on fake goods

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THINK OF CANCER DRUGS with a United States Food and Drug Administration seal of approval on the label and Avistin may come quickly to mind.

That’s because it is widely known in the medical profession for its potency in treating the disease and saving lives.

So when US federal prosecutors in Montana last August accused an online Canadian pharmacy with an affiliate in Barbados of allegedly selling almost US$80 million worth of mislabelled and counterfeit drugs in America, Barbados suddenly found itself on the major news pages of leading publications in Canada, Britain, New Zealand, Australia, the United States, Ireland and other countries. It wasn’t exactly the kind of international attention the island needed or wanted.

The Associated Press, London’s Guardian newspaper, the Toronto Star and The Globe And Mail in Canada and the Huffington Post in the US ran stories on the indictment, informing tens of millions of people on both sides of the Atlantic Ocean how they may not have received what they paid for, meaning the real medicinal McCoy that could make a substantial difference between effective treatment for a disease that’s often linked to excessive pain and eventual death.

The prosecutors alleged that Canada Drugs and its affiliates used a circuitous route that often stretched from Turkey, Britain, Canada and Barbados to major American cities to get what were bogus or unapproved medicines to the US. There was no evidence that suggested anyone died after taking the medication that passed through the firm in Barbados.

Barbados’ alleged role in the transactions, according to the indictment, was handling much of the money from the deal by receiving it and later sending the profits to Canada.  

But the trade in counterfeit medicines is like the Lilliputian in the global business in fake goods which the Organisation for Economic Cooperation and Development (OECD), the rich nations club in Paris, estimated was worth at least half a trillion US dollars.

The long list of goods being sold worldwide without the permission of the original manufacturers runs the gamut from shoes, clothes, medicines, watches, food and motor vehicle parts to pills, shampoos and aids to boost sexual performance in men suffering from erectile dysfunction, electrical equipment and leather goods.

Just under a decade ago, the estimated value of fakes was US$250 billion or about 1.8 per cent of the total amount of goods bought and sold globally. Last month, the OECD issued a report which put the bill at US$450 billion. What makes the situation interesting is that the legal battle to end counterfeiting is far from being significant.

“Nobody is sitting in jail for taking fake shampoo or bouillon cubes across international borders,” said Hans Schwab, founder of Illicit Trade Monitor, a website.

“Cartels in South America are starting to move towards the counterfeiting of consumer products because it is more lucrative and there is no need for bribes or fast boats.”

The Economist, one of the world’s most widely circulated English language news publications, explained why the trade in fakes is growing rapidly.

“Counterfeiters can make parts in one country, assemble a product in a second and package it in a third – without stepping outside of the law in any of them.”

And as if to add insult to industry, most consumers don’t know the difference between authentic products and bogus items.

That explains why buyers of counterfeits in Barbados and its Caribbean neighbours easily opt for fakes. Published accounts of Avistin underscore the problem. It allegedly passed through Turkey, Switzerland, Denmark and the United Kingdom before reaching doctors’ offices in Montano and other US states.

The seizures of fakes tell their own story. China, Hong Kong, Turkey, Singapore Thailand, India and Morocco, in that order, are the world leaders of fakes or unapproved merchandise.

But China, states The Economist, may be having a change of heart. It is beginning to move against counterfeiters. A major reason is that Chinese manufacturers and producers of authentic goods are themselves becoming victims of fakery.

Supposedly brand name infant milk powder ended up in Chinese homes bought by consumers who thought they were buying the real thing.

But there is another side to the counterfeit story. Many developing countries, including Caribbean Community member states, that are in the market for medicines to save lives complain that the entry of well made and potent counterfeit drugs, for instance, was making effective drugs affordable to them.

“Governments in poor countries and NGOs argue that the poor cannot afford costly Western patented drugs and should be allowed to buy cheap copies even before the patents expire,” The Economist reported.

That insistence helped to block an international effort by industrialised countries a decade ago to come up with a global arrangement that would prevent copies of pharmaceuticals from being made available to developing countries. India and Brazil helped to derail that effort.

The World Health Organisation limited the definition of counterfeit drugs to products that were “deliberately and fraudulently mislabelled”.

But rich countries warn that counterfeiting isn’t simply about money and infringement of intellectual property rights.

They contend the use of the wrong ingredients is dangerous and they cite the case in Africa where thousands of people died because the meningitis vaccines they were given contained the incorrect ingredients.

With computer software, car parts, wines, perfumes and luxury goods added to the pirates’ list, it explains why most Barbadians are consumers, either knowingly or unwittingly, of bogus goods. And they don’t have to be Luis Vuitton luggage, Movado watches or Ferragamo Italian footwear.

Look in your wardrobe, kitchen, computer, living room or medicine chest and chances are you would find fakes among your most precious possessions.