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Drug Busters: Tracking Down Counterfeiters

Novartis deploys a global team to track down counterfeit drugs and help authorities prosecute counterfeiters.

Drug counterfeiting is a big, deadly business. In locations ranging from one-room shacks in shanty towns to large, modern factories around the globe, illicit medicines are pumped out in astronomical quantities every hour, every day. Statistics on victims are difficult to come by; the official Chinese estimate is that 100,000 people in that country die every year from consuming counterfeit drugs.

Christian, vice president and head of corporate security at Novartis, is at the forefront of tackling this industrywide problem. He and his staff attack the issue on several fronts: raiding decrepit pill-making operations in Colombia and India; training local law enforcement and government officials around the globe to recognize and combat the problem; and building consensus among industry players to fight fake drugs. Christian gave CSO an inside look at his company's multipronged strategy to combat the growing epidemic of counterfeit drugs.

For Every Product, a Fake

Counterfeit medication, which WHO calls any drug that is "deliberately and fraudulently mislabeled," can apply to both branded and generic products. It could mean products that have the right or wrong ingredients, or insufficient or no active ingredients; they often have fraudulent packaging as well.

The reason criminals counterfeit pharmaceuticals is the same reason they manufacture fake handbags, wristwatches, DVDs or diapersto make a buck, or millions of them. The Global Business Leaders Alliance Against Counterfeiting, a cross-industry group, estimates that trade in counterfeit goods of all types reached $450 billion in 2000. The FBI estimates the impact on U.S. companies is $200 billion to $250 billion a year. It bears noting that such estimates are imprecise at best.

The legitimate global drug industry took in $550 billion in revenue in 2004, according to consultancy IMS Health.

To Novartis's Jackson, the counterfeiting problem cannot be measured, but he says the company's security team acts on every lead it receives. For example, in Colombia, where Novartis has raided buildings in which fake drugs are made, investigators have turned up yellow tablets of a popular painkiller that were made of boric acid, floor wax and lead-based yellow paint used to mark roads.

Incidents such as this lead to a singular edict for the Novartis team. "Every single report of suspicious and counterfeit Novartis product is responded to and investigated worldwide," says Jackson. "It doesn't matter where it is." He says they sent someone to investigate a report of suspicious product from the Ivory Coast, which turned out to be nothing. "We've got to follow these things up," he adds. (See "Intelligence Work")