Supply Chain Risks of Illicit Trade in Counterfeit Pharmaceuticals

By Jay P. Kennedy

 Nearly every type of product that has ever been produced has been counterfeited. While the most counterfeited goods tend to be footwear, luxury items, watches, and jewelry, in recent years there has been a dramatic increase in the prevalence of pharmaceutical counterfeits. The World Health Organization (WHO) defines counterfeit medicines as “medicines that are mislabeled deliberately and fraudulently”, yet counterfeit medicines are generally discussed alongside other forms of harmful medical products such as adulterated, expired, substandard, stolen, and falsified medicines. Each of these products moves through a mix of illegitimate and legitimate intermediaries and distribution channels before making their way into healthcare systems and ultimately to patients. Counterfeit pharmaceuticals harm patients, the healthcare system, legitimate companies, and society. While their presence within the legitimate supply chain is increasing, the threats posed by these illicit goods can be countered through focused action and collaboration amongst industry, healthcare, and law enforcement. This paper discusses three primary risks to consumers and the healthcare infrastructure of Texas: (1) the infiltration of counterfeit drugs into the legitimate supply chain; (2) the direct threat posed by counterfeit pharmaceuticals; and (3) the risks posed by counterfeit drugs to national security and the legitimate supply chain. The paper concludes with a discussion of policy and anti-counterfeiting strategy recommendations aimed at addressing each of the identified risks and protecting Texans, Americans, and the healthcare supply chain.   

Huntsville, TX: Institute for Homeland Security, Sam Houston State University, 2023. 18p.