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An Open Door for Killer Counterfeits

Posted by Mark Turnage on Jan 15, 2014 1:30:00 PM


As the old adage says, “politics makes strange bedfellows”.  None stranger perhaps than last June when the state of Maine opened the door to well-funded and well-organized international criminals by legalizing online drug purchases from internet pharmacies by its citizens.  The intention of the law is to allow Maine’s inhabitants access to cheaper drugs abroad than are available here in the US.   Whatever the rationale, the predictable consequence of the law is to fully open the doors of commerce in Maine to online providers of counterfeit and substandard medicines.  Other states are watching the Maine model and may well follow suit, with potentially disastrous consequences for their citizens.

The problem the Maine legislature set out to address in passing L.D. 171 (“An Act to Facilitate the Personal Importation of Prescription Drugs from International Mail Order Prescription Pharmacies”) is well understood: prices for prescription pharmaceuticals in the US are far higher than Canada, Europe, or other developed countries.   US citizens pay on average of 30% or more for identical products than their Canadian counterparts, and up to 50% more than many Europeans.  The causes of this price divergence are also relatively well understood: price controls on drugs exist in most countries which do not exist in the US; the high cost of pharmaceutical research (subsidized by higher drug prices in the US relative to the rest of the world); expensive direct-to-consumer pharmaceutical marketing in the US; a legal system which makes litigation much more pervasive than other developed countries, and a population eager to try out the newest drugs regardless of price.  Some commentators also point to unfunded new fees and costs associated with the Affordable Care Act, although these are not proven.

Maine’s solution is to legally give its citizens direct access to cheaper drugs abroad, via the internet.  The law specifies that citizens can purchase from “a licensed retail pharmacy…that meets its country’s statutory and regulatory requirements” in “Canada, the United Kingdom…, Australia or New Zealand,” and that they may receive these drugs “via mail or carrier.”    This law effectively legalizes what many citizens have already been doing for years---illegally purchasing their drug needs online from foreign suppliers, particularly when easy physical access to another country was not  available.  History however tells us that now that online drug purchases are legal a greater number of citizens will purchase this way, and thereby put themselves at risk.

Why the risk?  No matter how well-intentioned, the Maine law ignores the reality of modern internet commerce.  Study after study show that against the relatively small number of legitimate online pharmaceutical web providers, thousands of illegitimate sites exist.  These sites appear authentic, displaying logos of reputable pharmaceutical manufacturers and drugs, and accept payment via any number of standard online payment methods.  Seeking to take advantage of the boon in US purchasing of pharmaceuticals in Canada, they display the Maple Leaf on their websites, and often appear to be Canadian in origin while in fact they are registered in places like Russia, Panama, and Bulgaria.  The more sophisticated illegitimate sites know that alarms are raised when they mask their location, so they use proxy servers instead and appear to be legitimately registered in the US, Canada or Europe while in fact conducting business from other less regulated countries.

Less savory websites go further and offer “generic drugs” which are still patent protected, offer drugs in dosages that the legitimate producer does not offer, and offer sales to consumers of drugs with no prescriptions necessary—even powerful drugs like painkillers and anti-depressants. 

The simple reality is that to an unsophisticated consumer—and even who is sophisticated---any web site can be made to look and feel entirely legitimate.  There is no way to know whether the pills you bought online from one of these pharmacies will cure you, harm you, or kill you.   To put the risk in context, the World Health Organization estimates that over 50% of drugs purchased from online pharmacies with concealed or disguised physical addresses are counterfeit.

 There are a variety of efforts to educate citizens about the dangers of these rogue websites—the US National Association of Boards of Pharmacy publishes a list of via their Verified Internet Pharmacy Practice Sites website.  The Canadian International Pharmacy Association similarly publishes a list of legitimate sites.  These efforts have not hampered rogue operators from simply stating that they are qualified under one of the two programs, and even displaying (illegitimately) the appropriate seal of approval.    Public education efforts can help but not stop rogue operators from taking advantage of a public now actively shopping online for drugs.  It is one thing to buy fake apparel from a fraudulent website; it is an altogether different issue to buy fake pharmaceuticals online which can directly impact your health.

The public policy issue which the Maine legislature attempted to address via this law—namely significant differences in drug prices between the US and foreign countries--is an important one.  It is a national issue and is not particularly well suited for state by state legislation.  But given the dysfunctional nature of Congress and the lack of progress in resolving this issue over many years the Maine legislature was left with very poor choices.  It took one of the worst. 

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Topics: Brand Protection, AntiCounterfeiting

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