People power against fake drugs

In China, the head of a regulator was executed in 2007 for taking bribes from counterfeiters — which may worry Apollo Muhairwe, head of the Ugandan regulator, who is currently being questioned about contracts for fakes. Last month, China executed two for the contaminated milk-powder scandal that killed six children and made 300,000 ill. Meanwhile, fakes still pour out, including unsterile condoms using international brands, discovered in November in Hunan province.

Even in developed countries with effective laws such as Taiwan, there is still a threat from Internet sales.

In poor countries fakes are mass murderers. Fake drugs and the resistant strains they cause are the greatest threat faced by Kenyans according to Dr. James Sitienei of their Ministry of Health: “We want the government to immediately order that all TB medicines be procured by the State.” His diagnosis is correct but strong government intervention is a fake cure.

To tackle fake drugs, policymakers need to appreciate what makes their existence possible. It is common to blame globalization, free trade and porous borders, and common to call for greater controls.

Yet most fake medicines exist in the places with the heaviest border rules and strongest barriers to trade, which drive up trade costs for legitimate products.

Some of the highest rates of fake drugs are found in Sub-Saharan Africa, where a study last year found 35% of drugs failed quality testing. The World Bank notes in its 2009 Doing Business report: “High trade costs constrain participation in global trade for many countries, particularly in Africa.” Nigeria, a long-term victim of the fake drugs trade, still has among the highest tariff rates on medicines in the world, nearly 15%.

Of course, those obstacles provide wide opportunities for corruption.

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