Are Fake Pharmaceuticals A Big Problem in the U.S.?

American Enterprise Institute fellow Roger Bate has an op/ed, The Wrong Way to Stop Fake Drugs, in today's New York Times worrying about Americans taking counterfeit drugs. The op/ed notes:

It is technically illegal for individuals to order drugs online from other countries. And yet no sooner does the F.D.A. shut down one dubious online pharmacy than another pops up. According to the National Association of Boards of Pharmacy, only 3 percent of the 9,600 online pharmacies it has reviewed complied with industry standards. Many were based overseas, so their sales to Americans were illegal; others did not require doctors’ prescriptions. And some were very likely peddling dangerous counterfeit drugs.

As examples, Bate points to two recent cases including a faked version of the blood thinner from China and the cancer treatment drug Avastin from Turkey. However, neither drug came from online pharmacies but were sold through distributors directly to physicians and hospitals. In fact, Bate cites his own research that suggests that properly certified internet pharmacies can be trusted:

In a recent National Bureau of Economic Research paper, I assessed the quality and price of drugs procured through Internet pharmacies. As expected, I found several foreign sites that sold fake drugs. But of the international Web pharmacies certified by the Canadian International Pharmacy Association or PharmacyChecker.com — 23 in all, with 211 drugs sampled — all passed quality-control tests. After all, they were the same drugs made by the same companies, just in different locations.

It turns out that the only real way to meet the National Association of Boards of Pharmacy (an umbrella group for state pharmacy regulators) certification requirements is to be located in the United States. But as Bate points out the certification procedures of private groups like PharmacyChecker.com and Canadian agencies have so far effectively protected online purchasers of cheap pharmaceuticals from fraud. 

Bate argues that private citizens should be permitted to buy price controlled drugs online from abroad, but would not require that health insurance companies reimburse them. Why not? 

...because that would effectively import foreign governments’ price controls into the United States and undermine American companies’ research and development budgets.

That is likely true, but if the importation of price controlled drugs dramatically increased perhaps pharmaceutical companies would have an incentive to fight back by simply refusing to sell their drugs to countries that impose price controls. That could have the salutary effect of changing the current situation in which, by paying full price, U.S. consumers bear a disproportionate share of the burden of financing R&D for new drugs for the entire world. In any case, Bate comes to the right conclusion that the law against Americans purchasing pharmaceuticals from abroad should be changed. 

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  • R C Dean||

    According to the National Association of Boards of Pharmacy, only 3 percent of the 9,600 online pharmacies it has reviewed complied with industry standards.

    If 97% of your industry doesn't comply with a given set of standards, I'm not sure how you can call them "industry standards."

  • Ron Bailey||

    RCD: The industry standard that they failed to meet was being regulated by a state pharmacy board in the U.S.

  • R C Dean||

    So, not an industry standard, but a governmental standard.

  • Brett L||

    Wait, you mean there is private sector fraud protection? Why, this flies in the face of everything we know about everything!

  • $öç íñδ√ Sparky||

    I just stopped by to say I love the alt-text on this one Ron.

  • $öç íñδ√ Sparky||

    Also, I'll take the cinnamon jelly bean and the orange Pez.

  • ||

    So has anyone ordered stuff from the canadian pharmacies on PharmacyChecker.com to verify that they aren't just another scam that takes your money and doesn't deliver the drugs ordered?

  • johnl||

    Ron Bailey, where you note USA "consumers bear a disproportionate share of the burden of financing R&D for new drugs for the entire world", you could also note that USA consumers have a disproportionate voice in determining drug company investments.

  • Roger Bate||

    Hi Ron,

    Thanks for covering this story. For drug companies to succeed in not selling to certain countries they would have to able to act together, or risk losing out to the many competitors who do not join in, and such coordinated action is currently an anti trust violation. And even if an anti-trust waiver were granted, I suspect that with more and more generic drugs coming from India, that they would be scared of losing business they would not regain. But it would make for an interesting policy dynamic were it to occur.

    I should stress that there are lots of sites out there that are dangerous, selling poor quality copy drugs (made of road paint and chalk), or not selling you anything, taking your money, and perhaps trying to take your ID too.

  • Ken Shultz||

    According to the National Association of Boards of Pharmacy, only 3 percent of the 9,600 online pharmacies it has reviewed complied with industry standards.

    3 percent of 9,600 is 288. How much you want to bet that the top 100 online pharmacies dominate the market?

    I suspect most of the people who order without a prescription do it because it's hard and/or expensive to get a prescription. The solution to that isn't to make it harder to access an online pharmacy. The solution is to make it easier and less expensive to get a prescription.

  • ZungyMomo||

    OK thats jsut downright scary when you think about it dude.

    www.Planet-Anon.tk

  • دردشه عراقية||

    Thanks

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