Bogotá - For at least four decades Colombia has been synonymous with the costly war against narcotics. But a different kind of drug war brought me to Bogotá - the fight against counterfeit and substandard pharmaceuticals. The U.S. has spent billions fighting the war against illegal drugs, but it could save a lot more lives by diverting a small amount of that funding to fight bad medicines instead.
Cocaine with a street value of over a billion dollars is trafficked from Colombia to West Africa every year, where most of it makes its way into Europe. Less well known is that in the opposite direction goes a small but increasing amount of fake pharmaceuticals. Such bogus medicines, often made with ersatz ingredients, such as chalk and road paint, harm the lives of Colombians, probably in increasing numbers.
While this is worrying, the shipments coming from West Africa are tiny compared with the tons of chemicals and tens of thousands of treatments which arrive mostly from China. The fake products end up in Colombia whether they are packaged there, or in neighboring states - especially Venezuela and to a lesser extent Ecuador and Peru.
"People buying medicine want, and often desperately need, what it contains."
In June 2001, the General Director of Colombia's National Institute for the Supervision of Medications & Foods (INVIMA), Dr. Miguel Rueda, estimated that 10 percent of the $1.2 billion annual medicine sales in Columbia were counterfeit. Since then hundreds of tons of adulterated, relabeled, stolen, contraband, and counterfeit medicines have been confiscated.
INVIMA also discovered counterfeit manufacturing operations in Bogotá, where workers were producing daily over 20,000 counterfeit pills ranging from a flu drug, a generic aspirin to a popular painkiller. In four years, Rueda's organization dismantled at least 38 illegal laboratories producing fake drugs, finding fake medicines made of flour, sugar, boric acid and cement lime. Since 2005 hundreds of small scale processing facilities have been shuttered.
One of the reasons for so much domestic production is that in 1968, the Colombian Government established the Institute of Advanced Chemical Research as part of the National University in Bogotá. Unfortunately, some of the highly-trained chemists who emerged were later drawn to work for the Medellín and Cali cocaine cartels. Others adapted their skills to formulate fake or otherwise illegal medicines.
Producing tons of cocaine requires using tons of specific compounds known as precursor chemicals, and in the 1990s, the Cali cartel established a chain of pharmacies to hide their chemical purchases. A foreign investigator of Chinese chemical exports explains that today some of the suspected Cali cells are being supplied with chemicals likely to be made into medicines, and not for use in cocaine processing. It is therefore quite likely that Cali is selling its own medicines, through their own as well as other pharmacies. It is also highly unlikely that the products are up to required standards, even if they include the correct ingredients.
In 2003, the U.S. Food and Drug Administration estimated that as much as 40 percent of manufactured drugs in Colombia were counterfeit. Though the Association of Colombian Pharmaceutical Industries thought this figure way too high, claiming only 5 percent were contraband, counterfeit or substandard, and emphasizing that thanks to the efforts of INVIMA the figure today is probably below 5 percent. In fact, no one really knows the actual percentage, but hundreds, maybe thousands die as a result.
Seizures of counterfeit medicines grab the media headlines, but just as dangerous to patients are the many drugs past their sell-by date that are bought in neighboring countries like Peru, Ecuador, and Venezuela, repackaged in Colombia with a different expiry date and then sold to illegal dealers. Columbia also has an increasing problem with substandard medicines. In 2007, the last year for which full data are available, 43 lots of medicines, from analgesics to antidepressants, failed to meet quality standards and were destroyed.
Some pharmaceutical drugs are sold under poor conditions leading to product deterioration: Dr. Gustavo Campillo, a physician from Medellín who works with patient advocacy groups, explained to me how poor patients sell their medicines back into the supply chain to support their families. But much worse than this are the blanket reimbursement schemes which have price caps on certain medications, which means that for some diseases, only the cheapest, often inferior medicines are available to patients.
Trading in fake and substandard medicines is prevalent in Colombia because the penalties for trafficking narcotics are far higher than those for dealing in counterfeit medicines. In 2001, the head of corporate security for Novartis, Jim Christian, commented: "If you get caught with a pound of cocaine, you can expect to do serious time. But if you are found with counterfeit medicines, you might do only six months."
Even though penalties for producing fake pharmaceuticals have increased since 2001 and a jail sentence can be as long as eight years, enforcement (a problem seen in most emerging markets) is uneven, and those able to bribe and threaten are more likely to escape punishment. This makes the highly-profitable counterfeit medicine industry attractive to organized Colombian cocaine traffickers.
Even the paramilitary Fuerzas Armadas Revolucionarias de Colombia, best known as FARC, which has up to 20,000 combatants, may be making money from fake drugs, according to one local security expert who didn't want to be named. FARC's involvement is apparently widespread, since according to Egyptian intelligence in 2009, agents of FARC were buying fake breast cancer medicines and other drugs in the Middle East.
Colombian authorities, spearheaded by excellent leadership at the Ministry of Health and INVIMA, have a tough job. But increased enforcement efforts are essential and it is time for a new war against traders of lethal products. It is a war that can be won.
After all, cocaine can wreck lives, but the people buying cocaine want cocaine. People buying medicine want, and often desperately need, what it contains. They do not want a fake or substandard version. With no demand for fake drugs, enforcement action can be remarkably successful - and it is action that the U.S. government should support.
Roger Bate is the Legatum Fellow in Global Prosperity at AEI.