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New Survey Finds Counterfeit Products Cost Global Economy Billions


The World Intellectual Property Organization or WIPO estimates counterfeiting and piracy is costing the global economy more than $100 billion a year. Surveys by big business put a much higher figure of more than $600 billion on this illicit trade. More than 700 top government, business, and international law enforcement officials met recently at the Third Global Congress on Combating Counterfeiting and Piracy convened by WIPO. Lisa Schlein reports for VOA in Geneva.

Buying a fake Gucci bag or a $25 Rolex watch won't kill anyone. But, buying counterfeit medicine can cause serious disability and even death as Robert Mallett, senior vice president of the pharmaceutical firm Pfizer explains.

He relates the story of a 30-year-old man, suffering from backache, who bought, what he thought was Zanex, an anxiety reducing compound and a pain killer called Ultra.

"He bought it over the Internet. He took them both one night and he woke up in the hospital three weeks later," Mallett said. "His Zanex was counterfeit. It contained four times the usual dose. It was combined with another medicine. It produced a heart attack, brain damage and sent him into a coma."

The illicit nature of this trade makes it difficult to obtain exact figures, but estimates put counterfeits at more than 10 percent of the global market in medicines. And, the World Health Organization reports about 25 percent of the medicines consumed in developing countries are fake. The most commonly counterfeited medicines in poor countries are used to treat life-threatening conditions such as malaria, tuberculosis and HIV/AIDS.

Mallett says this is akin to murder.

"More alarming than what we see today is what we foresee happening tomorrow," he said. "Some authorities expect counterfeiting to double in the next four years. That could mean one in every five patients will be using counterfeit drugs."

But, counterfeit medicines are not the only products that can kill.

"This is a counterfeit fire extinguisher," explained Brian Monks, vice president of Anti-Counterfeiting Operations of the U.S.-based Underwriters Laboratories, which tests products for safety.

"Can you imagine that you are in a house. You're in a fire. You go to use the fire extinguisher to get your family out of the house and you don't get out because the fire extinguisher does not work," he said.

Monks says over 20 billion UL labels a year appear on products worldwide attesting to their safety. He calls the counterfeiting of products an economic crime.

"These thieves want to steal as much money as they can and at our risk. We take this battle to the counterfeiters worldwide," Monks said. "We want to have them charged, prosecuted and put in jail and their assets seized. They should not profit from peoples' lives or put peoples' lives in jeopardy."

"It's not just the police. That is what has to be kept in mind. It's customs working with the police, working with the private sector," he said. "And in most of these areas, this has never been done before. And, that is where we see our successes."

Director of Specialized Crime at Interpol, David Gork, says counterfeiting products is not a crime that stands out. He describes this as an insidious type of crime that is slowly creeping.

"Now you have to ask yourself also why are they committing these type of crimes. They could be running drugs or running prostitution rings or trafficking people," Gork said. "A lot of times these organized crime groups are doing all of those. But, there is less of an impact on them from a penalty perspective than there is on any other crime…There is not enough teeth in the law and when there is the judges don't necessarily understand the full impact of the crimes that are sitting before them and they give them absolutely minimal fines. They are making hundreds of millions of dollars and they give them a $10,000 fine or a $5,000 fine if you are lucky."

Almost every product on the market today is fair game for counterfeiters. This illegal trade undermines economic development. It results in lost earnings, lost jobs and lost tax revenues. The expansion of the illegal trade in fake foodstuffs and pharmaceuticals can cause disability and death.

Delegates at the Congress agree police and customs officials need more money to fight counterfeiting. They urge governments to enact tough laws against this scourge and to enforce those laws.

They say public awareness must be raised of the damage caused by counterfeit products. Once consumers stop demanding these cheap goods, the supply will dry up and so, they say, will the crime and economic exploitation that goes with it.