Counterfeit drugs everywhere in the world are a source of major concern for lawmakers, but in some countries, the concern is greater than others.
In Turkey, a country identified as being one of the largest global purveyors of counterfeit drugs, the concern has been so great that the government has embarked on an ambitious plan to implement a drug tracking system, unrivaled by even the most bureaucratically advanced countries in the West. The system, which industry insiders estimate has already cost more than $200 million this year alone in the run-up to its implementation, has been fraught with difficulties.
After its most recent cancelled implementation in July, its introduction has been rescheduled for October. Many industry insiders, however, are skeptical over whether authorities will be able to meet this deadline.
Counterfeit pharmaceuticals are big business. According to statistics provided by the Anatolia news agency, the global counterfeit pharmaceuticals market is an industry that is worth somewhere in the region of $10 billion per year, accounting for approximately 14 percent of the total pharmaceuticals market. Although the actual production of fake pharmaceuticals in Turkey is said to be in its infancy, the country has been identified as one of its global distribution hubs.
According to information provided by Dr. Roger Bate in last week's Journal of the American Enterprise Institute, his limited study of a small sample of drugs in the US purchased over the Internet revealed that Turkey is the largest single supplier of drugs bought online in the US. He documented a number of raids in Turkey that revealed all aspects of the counterfeit drug trade -- importers and local manufacturers of counterfeit products, wholesale distributors repackaging fake and old medicines that should have been destroyed and printers making packaging for the manufacturers. “The products I have seen,” he told Today's Zaman, “were manufactured by large Western companies in Turkey for the Turkish market which were diverted -- possibly illegally -- to the US by Internet sellers.”
According to figures supplied by Bate, Turkey is No. 4 in the world in terms of arrests of individuals involved in the illegal trade of medicines after China, South Korea and Brazil. Last year almost 150 people were arrested for involvement in drug counterfeiting. While arrests alone are insufficient to conclude that Turkey is a leading supplier in the world, it would certainly suggest that it is a serious problem in the country.
Turkey's implementation of the barcode tracking system stems in part from an attempt to halt the spread of counterfeit medicines originating in Turkey, but of equal importance is the prevention of fraud against the medical insurance system, which is being defrauded by unscrupulous doctors and pharmacists hungry to take advantage of the easily cheated system.
Turkey will save hundreds of millions of dollars
In addition to counteracting Turkey's image as a source of counterfeiting, it is hoped the system will save the government tens if not hundreds of millions of dollars a year in fraudulent medical insurance claims. Jeffrey Kemprecos, director of external relations at Merck Sharpe & Dohme, is hopeful that the proposed barcode system in Turkey will contribute considerably to stamping out counterfeit medicines in the country. “Estimates vary in range, but many people believe that the new system could help stamp out fraud that may cost the Social Security Institution (SGK) at least $150 million per year.”
But what the system could theoretically save and what it actually will is a matter of contention. People such as Ahmet Tavuşturan, chairman of the Association of Research-Based Pharmaceutical Companies' (AIFD) Anti-Counterfeit Committee is hopeful that once the trials are finished, the system could be up and running, if not in October, then by the end of the year.
“My personal belief is that the implementation of the barcode system is going to be hard because of a number of factors,” said Cengiz Gümüştüs, certified fraud examiner and general manager of ESFOR, a security consultancy specializing in investigating counterfeit drugs. His list of reasons includes logistical difficulties and resistance on the part of lobbies as well as resistance from pharmaceutical companies themselves.
“We're already seeing the kinks; it wasn't implemented on time,” says Bate, emphasizing that the project will be the first of its kind in the world. “There will be other teething problems, I expect, but that is no reason not to do it.”
Logistics alone would be almost reason enough; keeping track of hundreds of millions of boxes as well as the bottles inside those boxes in a complex web of relations between manufacturers, wholesalers and retailers will be no easy task.
In Turkey, manufacturers are forbidden to sell their products directly to consumers. Instead, they work with pharmaceutical warehouses who in turn sell their products to pharmacies, hospitals and other warehouses. The only people certified to sell the product to end-users are pharmacies. Pharmaceutical companies in turn hire representatives who travel around and promote products to doctors and hospitals in order to indirectly boost the sales. “In such a system,” says Gümüştüs, “it's difficult to track who sold what to whom.” Although the barcode system aims to make this easier, the monumental task makes this an even more difficult system.
Even the government of California scrapped a similar deal citing serious logistical obstacles as the principal reason.
Another reason Gümüştüs said it would be unlikely for the system to be implemented in October was that it would come in the middle of the fiscal year, when books have yet to be balanced, inventories have not been counted and invoices remain to be tallied. “I think it's more likely that the system will be implemented in January,” he said.
But logistical difficulties aside, there are likely to be more reasons that need to be overcome if implementation of the barcode system is to go ahead. Turkish pharmacies as well as warehouses are also offering significant resistance to the scheme. According to Bate, the principal reason that pharmacies are resisting the system's implementation is that it will require each of the country's 24,000 pharmacies to purchase $150 worth of equipment -- a small fortune, Bate says, for “hole in the wall” type pharmacies, whose weekly profits may only amount to $150.
His claims are not unfounded. Resistance to the costs associated with the implementation of the system has been one of the principal points of focus for the influential pharmacists' lobby, the İstanbul Chamber of Pharmacists. They say that one-third of the country's pharmacy members now claim to be on the brink of bankruptcy as a result of what they call “excessively high overhead.”
Another source of resistance coming from the pharmacies stems from the fact that it will be much harder for them to dispense medication without a prescription. At present, almost every medicine sold in a pharmacy technically requires a prescription. But in reality, virtually everything that is not a controlled substance can be bought over the counter. Rumor has it that pharmacists are worried that the barcode system will be a slippery slope leading to them being forced to rely on doctor's prescriptions for all medicines thus taking a significant chunk out of their sales.
Success of barter system of utmost importance
Complicating matters further, Turkish pharmacies and warehouses often work according to a barter system. Gümüştüs says that this last issue is one of the main factors behind the pharmacies and warehouses resistance to the program. “Often pharmacies will barter with one another and say, ‘I have five boxes of aspirin, let's trade them for Advil.' Gümüştüs explains that in this system, there are rarely invoices or paper records. With the barcode system, this form of barter will be almost impossible. “Pharmacies claim that it is too expensive to implement,” he says, “but it is really the barter system that is driving them to resist the system.”
Although nobody has accurate records of the amount of counterfeit drug manufacturing in the country, Tavuşturan is quick to point out that counterfeiting does not only involve the production and manufacturing of fake drugs. Although recent arrests and searches have revealed tablet-pressing machines and other equipment that can be used to press baby powder and other “buffers” into tablets, Tavuşturan says that the majority of counterfeiting in Turkey is in the form of supplying expired drugs and forged “cutouts” -- information tags taken from the packaging and used to obtain money from the state medical insurance fund.
Ironically, pharmaceutical companies -- the ones whose pocket books are arguably most affected by the proliferation of counterfeit drugs in Turkey -- have been amongst those who were resisting the implementation of the barcode system. Given the out-of-pocket costs associated with the program -- Merck Sharpe & Dohme, for instance, has spent more than $900,000 implementing the system to date -- Kemprecos says they doubted the feasibility of the system given the lack of precedent in the world, and especially Turkey, and of governments being able to implement such a complex system.