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Copycat Drugs Present Long-Term Threat To U.S.

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Published: November 29, 2007

People who rob banks only steal money. And they only steal it once.

But when intellectual property is stolen, the rip-off is ongoing.

Today, one of the biggest rip-offs going threatens to cripple the U.S. pharmaceutical industry - which faces unprecedented losses from the theft of intellectual property via the mass production of copycat drugs. These drugs are manufactured in places like China, the former Soviet republics, the Philippines and other places where the U.S. Food and Drug Administration (FDA) has no effective oversight authority - and where the safeguards designed to protect public health taken for granted in America are virtually nonexistent.

Amazingly, some lawmakers in Congress don't recognize the extent of the threat - and are pushing legislation that would make it legal to import prescription drugs from abroad.

Such a measure would lead to a deluge of copycats entering the legitimate supply chain, since it would be virtually impossible to track what's real and prevent phony medications from entering the U.S. market.

Already, counterfeit drugs have proven deadly. Earlier this year in Canada, a woman who purchased Xanax and Ambien from what she thought was an online Canadian pharmacy died after taking her pills. It turns out that the drugs were fake - and were filled with aluminum, tin and arsenic. They actually had been purchased from a Web site in the Czech Republic and produced in Southeast Asia. But because the medication, in all likelihood, came with labeling and packaging that was indistinguishable from the real thing, there was no way for the victim to know that her pills were contaminated with dangerous impurities.

As the prevalence of counterfeit drugs increases, the long-term viability of legitimate pharmaceutical companies is threatened.

The cost of developing a new drug ranges from a low of around $800 million to as much as $2 billion. Much of that investment goes to cover the cost of clinical trials to assure the new drugs are safe and to meet the federal government's many regulations.

Copycats, of course, don't have to worry about any of that; they just take the proverbial ball and run with it - straight to the bank. In fact, it's estimated that counterfeit drug sales will account for $75 billion globally by the year 2010. According to a recent article in U.S. News & World Report, the counterfeit drug trade is already worth some $35 billion annually.

When the companies involved in manufacturing life-saving drugs come to the conclusion that it may be impossible to recover their investment because of foreign rip-off artists, they will make the perfectly rational decision to spend their time and effort elsewhere.
New drugs that might have saved thousands of lives - such as a possible cancer vaccine or a cure for AIDS - will never see the light of day. And we'll all be poorer for it.

That's why opening the floodgates to imported drugs of unknown origin is a terrifying proposition. It poses a real risk today, and it threatens our health and well-being tomorrow, too.

Peter J. Pitts is president of the Center for Medicine in the Public Interest.

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