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Prescription Drug Counterfeits Grow in U.S.

Prescription drug counterfeiting is on the rise in the U.S., endangering lives and costing pharmaceutical companies billions of dollars annually, according to CNBC.

What’s going on: “In the U.S., there were 2,121 incidents of counterfeiting in 2022, up 17% from the prior year.”

  • The World Health Organization estimates that the global annual worth of drug counterfeiting schemes is up to $431 billion.
  • In recent years, several drugmakers have filed suit against pharmacies, wholesale pharmaceutical distributors and other defendants for selling what patients were led to believe were the drugmakers’ medicines but were actually other pharmaceuticals, usually totally unrelated to the patients’ conditions.

How it works: “A patient fills a prescription for a medication that is worth several thousand dollars but is paid for by Medicare, Medicaid or insurance. The patient then sells it for a fraction of the list price in cash. The buyer, known as an aggregator, removes the patient information, alters the bottle and sells it to the wholesale distributor, who sells it back to the pharmacy.”

  • The crimes tend to start “on the streets,” with patients approached at shelters and clinics and induced to sell their legitimate prescriptions to counterfeiters.

Why it’s important: Many of the drugs being “diverted” are critical to patient health, including antiretrovirals for HIV and cancer medications.

  • In one case, “counterfeiters had obtained authentic empty bottles, filled them with the wrong pills and packaged them with a counterfeit seal. … [A] patient temporarily could not walk or talk after taking” the medication.

Some know, others don’t: Stephen Mahmood, an assistant special agent with the Department of Health and Human Services’ Office of Inspector General, said pharmacies may or may not know they’re buying counterfeit drugs.

  • “Some of the pharmacies are involved with the fraudulent wholesalers. They know exactly what they’re doing. … Some are unwitting, and they may get a fax from a wholesaler saying, ‘Hey, we have a discounted drug.’ And due to competition and trying to make money, they may buy the drug.”

The NAM’s view: “The NAM is leading the charge against counterfeit products that pervade multiple sectors of the economy—and in 2021 subtracted nearly $320 billion from the U.S. economy, including direct, indirect and induced economic input,” said NAM Director of Domestic Policy Julia Bogue.

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