Friday, March 24, 2006

Counterfeit drugs and the costly war against 'em

The World Health Organization estimates that 10 percent of medications distributed worldwide are counterfeit. Gary Coody, National Health Fraud Coordinator for the FDA, says that that number is only about 1 percent in the US. According to Arthur D. Little,
This country devotes just 1.4 percent of its GDP to pharmaceutical expenditures, which is about average among the major industrialized nations.

That 1.4 percent of GDP translated to $214.5 billion in 2004, and 1 percent of that would be $2.1 billion in counterfeit medications.

GlaxoSmithKline is participating in a pilot project to combat this type of fraud by adding tracking tags to the packaging for Trizivir. This will, of course, add to the cost of the medication, making the overall cost of meds higher for us all if this technology is more widely adopted.

The technology will allow, I'm guessing, for better tracking of inventory (a boon for pharmacies?) and may even play a role in reducing medication errors (a long shot), but I'm still a bit conflicted about the cost benefit in all of this. While I'd like to see more resources given to ending health fraud, and I deem the production and sale of counterfeit medications as a particularly heinous fraud, I am a bit concerned about the impact of the costs on down the road.

I know that's a little too cynical for my normal mode of thinking. There are, after all, human lives at risk when counterfeit medications are being used. And HIV/AIDS has been hard hit by this type of fraud; counterfeit versions of Combivir, Serostim, Epogen, Procrit, Retrovir, and, no doubt, others have been identified. My angst comes, of course, from the fact that this is just one more thing to hack away at the all too limited resources that are being given to HIV treatment in the U.S.

How to resolve it? Counterfeit drugs are a bad thing. Fighting the counterfeit drugs is a good thing. Adding the tracking technology to fight the counterfeit drugs is a good thing. Raising the cost of medications is a bad thing. Maybe the manufacturers will look at the cost of adding the new tracking technology as being offset by their savings from eliminating the counterfeits? After all, it's not like they didn't raise the cost of medications to offset their losses from counterfeits.

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