May 18 (Bloomberg) -- In Pakistan’s biggest market for wholesale medicines, it pays to be observant.
More than 2,500 stalls wedged along dirt lanes in Karachi’s busiest trading district offer everything from Pfizer Inc.’s cholesterol pill Lipitor to GlaxoSmithKline Plc’s painkiller Panadol. Closer study of the remedies lining rickety shelves reveals the source of an unfolding medical crisis: Lipitor sold in obsolete packaging, Panadol packets missing tell-tale ribbing, and allergy medicine Zyrtec mislabeled as Zytrec.
Now, the free flow of fake medications channeled through the market for decades may soon be slowed. Lawmakers are poised to pass legislation in June creating an agency to quash the trade after 107 heart patients were killed this year by pills tainted with lethal amounts of an anti-malarial agent. That may help break the ring of counterfeiters in Pakistan, part of a wider network supplying what the World Health Organization estimates is a $431 billion global market for spurious drugs.
“The issue is serious, demanding serious steps,” said Salman Burney, chief executive of GlaxoSmithKline Pakistan Ltd. in Karachi. “Better regulation will generate more investment in the pharmaceutical industry, which will mean better quality medicines.”
The problem spans national borders. Pakistan was one of the 10 largest sources of counterfeit goods seized in the U.S. last year, U.S. Customs and Border Protection said in January. Medicines accounted for 85 percent of the value of the Pakistani items obtained.
At least 30 percent of medicines bought in the country are either counterfeits or substandard, said Kulsoom Parveen, a lawmaker who chairs a Senate health committee. Pharmacies nationwide sell drugs without a doctor’s prescription, enabling the treatments to be taken without medical supervision.
Pakistan has 4,000 registered pharmacists and 25 times more merchants dispensing medicines illegally, the Pakistan Pharmacists Association said.
It’s no coincidence that fake and substandard drugs are flourishing in Pakistan, said Laurie Garrett, senior fellow for global health at the Council on Foreign Relations. The New York-based think-tank prepared six recommendations to fight the drug-safety crisis for consideration by the Group of Eight summit at Camp David, Maryland, today and tomorrow.
“Individuals that are exploiting weaknesses in global drug safety and regulation will base themselves in places where they know the system is fragile or nonexistent,” Garrett said in a telephone interview. “Pakistan is really struggling to keep its entire public health infrastructure alive.”
Protecting product integrity would also benefit makers of brand-name medicines. Pharmaceutical sales in Pakistan, with a population of 196 million, total $2 billion annually, compared with $12.4 billion in neighboring India, with 1.2 billion people.
GlaxoSmithKline Pakistan, based in Karachi, made 1.14 billion Pakistani rupees ($12 million) in profit on sales of 21.75 billion rupees last year. In India, Mumbai-based GlaxoSmithKline Pharmaceuticals Ltd. had net income of 6.3 billion Indian rupees ($118 million) and revenue of 23.9 billion rupees.
Prime Minister Syed Yousuf Raza Gilani’s government hasn’t had a federal health minister or a central drug regulatory agency since powers were handed to the country’s four provinces last year. A new bill, to be voted on by Pakistan’s senate next month, will strive to fill the void.
“We need to regulate -- from manufacturing to the prescription -- leaving nothing in between,” lawmaker Parveen said in an interview from Quetta. “The drug regulatory agency will look at all three problems: fakes, substandard, and smuggled medicines.”
The need for effective drug treatments is increasing in Pakistan, where about half of adults older than 50 years suffer high blood pressure, according to the WHO. The country had 6.3 million adults with Type-2 diabetes last year, the International Diabetes Federation estimated. By 2030, the tally will be 11.4 million, the 10th-highest tally worldwide, the Brussels-based group predicts.
Counterfeit medicines don’t just risk lacking their purported active ingredients. Some are potentially deadly -- laced with substances that include rat poison, brick dust and paint, said Scott Davis, a former U.S. customs official who heads security in Asia-Pacific for Pfizer in Singapore.
Less than 1 percent of medicines in developed markets and as much as 30 percent or more in developing countries are fake, the Geneva-based WHO estimates. China and India are probably the biggest suppliers of the counterfeits, which cause 700,000 deaths a year among malaria and tuberculosis sufferers alone, according to the Washington-based International Policy Network.
To counter the proliferation of counterfeits, drugmakers like Pfizer constantly change product packaging, closely monitor supply chains, and train staff to spot fakes, said Ahmer Ashraf, a spokesman for Pfizer Pakistan. That adds to costs, he said.
“Criminals are attracted to the fake drugs business because it’s a low-risk, high-return area,” said Akbar Baloch, a director at the Federal Investigation Agency in Karachi. “If we catch someone with heroin, he may get the death sentence, while fake pharmaceuticals may get him a few years of prison or he may get away with just a fine.”
Regulatory loopholes make it “very easy for unscrupulous individuals or organized crime to dive right in and exploit the situation,” Garrett at the Council on Foreign Relations said. “Even if they eventually get caught, they will have made a lot of money before the drug gets pulled off the market -- and then they just disappear.”
Drug inspector Saleem Laghari charged three sanitation workers in 2006 for making and supplying fake vials of Clexane, an anti-clotting medicine sold by Paris-based Sanofi. The trio was buying empty containers from the National Institute of Cardiovascular Diseases where they worked, filling them with other liquids and selling them to pharmacies near hospitals for 200 rupees apiece. Vials of the genuine drug go for 800 rupees.
“Such trade is putting an ailing population to near death,” Laghari said.
Courts hearing pharmaceutical industry-related crimes should have dedicated police possessing the right to initiate raids, as well as the ability to impose death penalties and confiscate assets, said Saathi Ishaque, chairman of the Court of Drugs for Sindh province in Karachi. Those convicted now face as many as 10 years imprisonment and as much as 100,000 rupees ($1,100) in fines.
“The new drug regulatory authority will only be able to help if it is made up of independent people appointed on merit - - not people with political backing,” said Samrina Hashmi, provincial head of Pakistan Medical Association, a doctors’ group. “These spurious and counterfeit medicines are the biggest problem for our patients.”
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