Monday, December 11, 2006

Fake Economy

This week's BusinessWeek included an expose of the ongoing problem of counterfeit drugs entering the US via Internet Pharmacies. As we have noted before, it is practically impossible to distinguish real from fake:

Recently security officials at AstraZeneca put fake and genuine versions of its $4.6 billion-a-year heartburn medicine Nexium on the desk of CEO David Brennan. They looked exactly the same, he says. "This is a very serious problem that is accelerating," Brennan adds.

In addition to contaminated and non-efficacious drugs, the article recounted how fakes can also contain too much active ingredient - with disasterous results. This recent article from provides a great summary of the problems of tackling counterfeit drugs - and some startling new estimates: 200-300,000 Chinese die a year from counterfeit drugs.

Nevertheless, entire local economies in China may rely on counterfeits:
Ohio State law professor Daniel Chow, a counterfeiting specialist, points to the market in Yiwu, a city of 650,000 south of Shanghai. More than 30,000 wholesale distributors sell more than 40,000 different kinds of products in the Yiwu market, 80 to 90 percent of which are counterfeit. Chow estimates there are hundreds of towns like Yiwu and millions, if not tens of millions, of Chinese who depend on counterfeit goods for their economic livelihood.