Tonight 60 Minutes ran a story on the $75 billion a year counterfeit drug racket that makes up 26% of the $289 billion U.S. market in pharmaceuticals.
The difficult fight against counterfeit drugs
"So, you're talking about a very low risk, very high reward, potentially tons of money," Gupta remarked.
"Yeah. Absolutely," Kibble said. "When you think about that some of these pills can be manufactured you know, for 40 cents and sold for $18 or $20, I mean, just think of that profit potential. I mean, it's insane."
So the real problem is people are counterfeiting pills these pills. It would never occur to people who have been trained as reporters and producers that the real problem here is that these pills sell for inflated prices of $18 or $20 EACH.
Thirty six million Americans are estimated to have bought their medicines from these sites, many searching for quality drugs at a better price. Some sites pretend to be from Canada because Canada is known for safe, inexpensive medicines.
Kibble caught one Israeli counterfeiter on a hidden camera admitting that very scheme.
"These are all your Internet Web sites. Is that really from Canada?" an undercover agent asked.
"Noooo!" the counterfeiter replied, laughing.
More and more Americans are becoming aware of the hazards of buying prescription drugs on the internet, but even with that knowledge many will be compelled to to resort to fly by night internet sites simply because they have no choice. They can't afford to by their prescriptions from more reliable suppliers, put food on the table and pay the rent. Something has to give. That created the opportunity for counterfeiters to ridiculous amounts of money selling fake drugs to Americans who were at the end of their rope.
60 Minutes scrupulously avoided asking the pharmaceutical companies' representatives why Americans are the only people on earth that are being made pay $18 or $20 for EACH one of these pills. Pharmaceutical corporations have deemed it impermissible for the U.S. media to single out any other parties responsible for the situation except for the counterfeiters.
Pharmaceutical Industry wiki
The United States accounts for almost half of the global pharmaceutical market, with $289 billion in annual sales followed by the EU and Japan.(pdf) Emerging markets such as China, Russia, South Korea and Mexico outpaced that market, growing a huge 81 percent.[23]
US profit growth was maintained even whilst other top industries saw little or no growth. Despite this, "..the pharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue."[25]
So not only do Americans spend as much on our military as the rest of the world combined, but we spend as about as much as the rest of the world does on pharmaceuticals. While Americans bear half of the world's cost burden we consume far less than half of the worlds pharmaceuticals, due to Big Pharma's manipulation of the American market.
The unusually high costs of the pharmaceuticals here also make the U.S. is also the biggest market for anti-counterfeiting measures.
North America holds a major share of the global anti counterfeit market. Asia has the highest growth rate due to untapped market and significant level of counterfeiting. Europe has a lower growth rate due to a relatively lower number of cases of counterfeiting.
Global Anti Counterfeit Packaging Technologies Market For Food And Pharmaceuticals (2009-2014)
Could the low incidence of counterfeiting in Europe be result of the EU's non-stratospheric drug prices?
From Slate:
The Make-Believe Billion
How drug companies exaggerate research costs to justify absurd profits.
Big Pharma has been making its R&D argument for half a century, but the specific source of the $1 billion claim is a 2003 study published in the Journal of Health Economics by economists Joseph DiMasi of Tufts, Ronald W. Hansen of the University of Rochester, and Henry Grabowski of Duke. I will henceforth refer to this team as the Tufts Center group, because they were working out of the (drug-company-funded) Tufts Center for the Study of Drug Development. The Tufts Center group "obtained from a survey of 10 pharmaceutical firms" the research and development costs of 68 randomly chosen new drugs and calculated an average cost of $802 million in 2000 dollars. That comes to $1 billion in 2011 dollars based on the general inflation rate since 2000 (28 percent). One billion dollars for every little orange prescription bottle in your medicine cabinet! And according to PhRMA, even that is way too low! As of 2006, its calculation of the drug-development average had already risen to $1.32 billion. That means costs specific to drug development increased by 64 percent between 2000 and 2006. Medical inflation typically outpaces general inflation, but PhRMA's calculation puts its rate of cost increase at more than twice the rate for medical inflation during that period (26 percent). If Pharma's alleged inflation rate hasn't slackened since 2006, then the drug-development average should be now approaching $2 billion. But let's not go there. We'll stick to Big Pharma's official last-stated estimate of $1.32 billion.
With counterfeiting now fueling a burgeoning cyber black market that has become 26% an enormous sector like of the US Pharmaciticals the problem is undeniable. The counterfeiters are a symptom of the much larger problem that Big Pharma's rapacious greed is the dominate factor in making Americans, drug prices the highest in the world by far.
The solution to would insure that Americans would have a safe and effective drug supply, is also the solution that would insure that Americans can afford the drugs that they need: price controls similar to the ones found in every other country with an advanced industrial economy.