Breaking News, World News and Taiwan News.

Updated Friday, January 16, 2009 10:22 am TWN, By Julian Harris And Philip Stevens, Special to The China Post

Sponsors
▪	Find great real time deals on China Flights. Book flights to China or China domestic flights 24/7.
▪	Buy china wholesale products from reliable chinese wholesalers on DHgate.com!
▪	Save 75% for all hotels in Shanghai, Beijing and whole China. Lowest rates for Flights in China.
▪	Get the best deals for Guangzhou Hotels or choose from more than 10,000 hotels in 499 Chinese cities.

Fake drugs and failed governance

Extra laws often simply create extra layers of bureaucracy which then create further opportunities for corruption. Drugs passing through customs, for example, face myriad regulations and tariffs, inevitably leading to “informal” payments to speed up the process. If the market is small, as in many African countries, many suppliers of legitimate medicines find the obstacles too expensive and do not bother supplying at all. Counterfeiters, unconcerned by regulations, gain even greater advantage.

A free media is also crucial to improving standards and defending citizens against fakes. In China melamine contamination killed four infants (and harmed thousands), yet the government banned news reporting. All three cases filed against the producer have been rejected by the courts. The same happens with medicines.

Additionally, many governments impose high taxes and tariffs as well as complicated regulations on imported medical products, adding an average of 68.6% to the final price in developing countries, according to a WHO study in 2003: taxes or tariffs alone are often around 20% - from 14% sales tax in South Africa to a combined 30% in Brazil and more than 50% in India for imports (and at least 19% on local drugs). This makes real drugs more expensive, creating yet more opportunities for counterfeiters to undercut them.

Although strengthening the rule of law is vital for tackling fake drugs, as well as for general economic development, such reforms are lengthy and difficult. In the short-term, technology can help manufacturers of genuine products protect their brands. In Ghana, a new service called MPedigree allows people to send serial numbers (embedded under a scratch-pad on drug packets they have bought) by text message: they then get a message back telling them if the item is genuine. Many similar schemes are under development. Even safe Taiwan, with only around one percent counterfeits, has had to introduce near-infrared spectrography (NIR) to protect consumers.

The WHO and its International Medical Products Anti-Counterfeiting Taskforce (IMPACT) are doing good work in publicizing the threat and pushing governments to react but the private sector has to be at the forefront of solutions, especially in developing countries: after all, it has a far better grip on drug production, storage and distribution. Governments can help by interfering less, taxing less and focusing on what would really help, like strengthening the rule of law.

Julian Harris and Philip Stevens are analysts at International Policy Network (www.policynetwork.net), London, an international, non-governmental, educational and non-partisan development think-tank.

1|2