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Due Diligence: The first line of defence against counterfeit medicine

October 02nd, 2015 - Posted by Nisrine Nehme in Anti-Bribery And Corruption

Mass deaths from falsified medicines are not uncommon.  In 2012, a fake tuberculosis drug administered to patients at a hospital in Lahore, Pakistan, killed 100 people.  Officials in India investigating the deaths of more than 8,000 people in a Himalayan hospital over five years found that an antibiotic to prevent infection after surgery had no active ingredient.  
Meanwhile, the World Health Organisation (WHO) was forced to issue an alert earlier this year when it found that meningitis vaccines sold in West Africa were expired and potentially dangerous.

The rise of drug counterfeiting is one of the most serious international criminal operations of recent years.  Experts believe that more criminals are turning to the trade because the risk of getting caught is low and, in those instances where there is a prosecution, the penalties are weak.  Paul Newton, professor of tropical medicine at the University of Oxford Medical Schools, told Newsweek, that criminal gangs cash in on medicines that are in high demand but are expensive for patients.

Jim Herrington, of the Gillings Global Gateway at the University of North Carolina, said: "These falsifiers are in fact murderers.  You're more likely to get prosecuted for counterfeiting a Gucci purse than a drug."

The problems are compounded because the global pharmaceuticals industry is a highly complex system with manufacturing networks which cross the planet.  Drugs destined for one country may pass through 20 others during the manufacturing process and multiple third party suppliers.  Chemicals may be synthesized in the US before fillers are added in Mexico and then the drug is actually packaged somewhere in Europe – giving criminal gangs who have infiltrated these networks ample opportunity to intervene.

Tackling the global pharmaceutical counterfeit trade is an enormous challenge, one which is being addressed at national government level.  But the industry itself can make a major contribution, particularly by employing proper due diligence in its supply and distribution networks and with third parties.

That due diligence should include obtaining detailed information and the licensing of third parties, any history of disciplinary or legal actions, assessments of their primary corporate executives, the owners and managers.  Furthermore, any information about its business activities, financial and credit information should be obtained before entering into any relationship with a third party.

Pharmaceutical companies should also make sure that the third party it is planning to enter into an arrangement with is in compliance with all national and international legal requirements and, where it is to be used as a distributor, that it is authorised to do so for the drugs proposed.

Due diligence is the first line of defence in the war on the global counterfeit drugs trade.  To date, it remains the most effective weapon being used to prevent diverted or counterfeited drugs from entering the global market.

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