February 27, 2006

In recent months, the World Health Organisation (WHO) has issued a series of alarming estimates for the scale of the global trade in illegal counterfeits, but Latin American regulators report that the problem is becoming increasingly severe.

Worldwide counterfeit drug sales are valued at roughly US$20bn, but in less regulated markets the share of sales held by the illegal sector can higher than 8%. In Venezuela, it is estimated that one in four pharmaceuticals is a counterfeit or fails to meet regulatory standards, and multinationals estimate that Mexico's illegal trade stands at US$650mn per year -- equal to around 10% of total drug sales.

Argentina and Colombia are reported to be among the worst-affected countries. Argentina has launched a crackdown in recent months, but anti-counterfeiting laws are a new phenomenon in Colombia. Guatemala recently issued its first ever jail sentence in a medicines counterfeiting case.

However, the problem appears endemic in Peru. Local regulator DIGEMID impounded 28 tons of fake drugs in 2004, and another 460,000 illegal products were intercepted in 2005. Throughout the region, antibiotics, anti-malarials and ARVs were the most frequently copied products, with 43% of intercepted products found to lack the active ingredient claimed on packaging.

In view of other regulatory issues, such as semi-legal copying of branded drugs by legitimate local companies, and the recent completion of stronger trade links with the US, the region's illegal pharmaceuticals sector is likely to remain a high-profile problem in the coming years.