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Rx Roulette: combatting counterfeit pharmaceuticals in developing nations

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Abstract

The debate over access to medicines has principally centered on pharmaceutical patents and prohibitively high drug prices. Although a less recognized problem, counterfeit pharmaceuticals are certainly a more insidious barrier to access. Pharmaceutical counterfeiting is an invisible threat, not only by nature, but also because the industry has historically downplayed it. However, that has changed. Pharmaceutical firms now not only readily concede counterfeiting is a threat to their business, but in some cases publicly address their strategies and the anticounterfeiting technologies in use and development. Acknowledging the problem has benefited the industry because it alters the ways in which firms are able to combat counterfeiting, allowing them to more overtly confront the problem. In addition, it allows them to better partner with governments and health advocates since their incentives are aligned in efforts to prevent counterfeiting. In light of the more public and more aggressive campaign against counterfeiting, it is important to examine the variety of strategies firms may utilize to prevent their sale. Through a theoretical model of the market in a representative developing country, several anticounterfeiting strategies are considered. Some strategies appear to be more effective than others in the battle against fake drugs. Copyright © 2007 John Wiley & Sons, Ltd.

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... Besides their implications for pharmaceutical brands, SFMs proliferation is a more significant public health threat than diseases they purport to cure [8,21]. They have dire long-term health consequences for consumers (e.g., organ failure, antimicrobial resistance, overdose, or even death) [6,8,10,15]. ...
... They have dire long-term health consequences for consumers (e.g., organ failure, antimicrobial resistance, overdose, or even death) [6,8,10,15]. As Lybecker [21] observes, counterfeiting is a less understood, invisible barrier to medication access and safety compared to pharmaceutical pricing. Thus, medication access does entail not only availability and affordability but also quality [22]-all three of which relate to SFMs. ...
... Thus, medication access does entail not only availability and affordability but also quality [22]-all three of which relate to SFMs. The health, safety, risks notwithstanding, most people, including Americans, are unaware of the prevalence of the problem and the consequences of purchasing and taking such drugs [2,4,20,21]. The lack of rigorous and universal drug regulatory frameworks, the complexity of drug supply chains and the sophistication of medicine packaging make it difficult for regulators, pharmaceutical firms, activists, and consumers to detect counterfeit drugs [6]. ...
Article
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Background Substandard and falsified medicine (SFM) sales (an estimated > $200 billion) has become one of the worlds’ fastest growing criminal enterprises. It presents an enormous public health and safety challenge. While the developed world is not precluded from this challenge, studies focus on low-income countries. They emphasize supply chain processes, technological, and legal mechanisms, paying less attention to consumer judgment and decision-making aspects. Methods With attention to the demand side of the counterfeit medicines challenge, this survey of U.S. consumers ( n = 427) sheds light on some of the social, psychological, and normative factors that underlie consumers’ attitudes, risk perceptions, and purchase intentions. Results Consumers who (a) self-report that they know about the problem, (b) are older, (c) view counterfeit medicine consumption as ethical, and (d) think their significant others would approve of them using such products are more inclined to perceive lower risks and have favorable purchase intentions. Risk averseness is also inversely related to the predicted outcomes. Perceived benefit of SFMs is a factor but has no effect when risk perception and aversion, attitudes, and subjective norms are factored into the model that predicts purchase intentions. Conclusion The results of this study indicate that consumer knowledge (albeit in an unexpected direction), people’s expectations about what will impress their significant others, their ethical judgments about selling and consuming counterfeits, and their risk-aversion are associated with their decision-making about counterfeit medicines. The study offers insights into a demand-side approach to addressing SFM consumption in the U.S. Implications for public health, consumer safety, and brand advocacy education are discussed.
... Developing countries tend to be more vulnerable to counterfeiting (Cockburn et al., 2005;Lybecker, 2008). However, it is a global issue, as the product flow might be found anywhere and in different markets (Coustasse et al., 2010). ...
... Hoecht and Trott (2014) presented a broad review of such anti-measures, for example, co-opt offenders, educating stakeholders at the source, aggressive advertising and internal and external guanxi (China), but focusing on Chinese scenarios. Lybecker (2008) presented managerial mechanisms specific to the pharmaceutical industry. However, counterfeiting is an ever-evolving threat in the sense that as soon as new strategies are developed, counterfeiters start looking for new ways to mimic products without being detected (Everts, 2010;Dimase et al., 2016). ...
... Furthermore, ProQuest ABI/INFORM databases were considered because of their coverage of publications in the management field (Rüling, 2005). The study considered articles published over the past 15 years from 2002 to 2016 as topics regarding counterfeits and resilience have significantly grown in recent years (Lybecker, 2008;Kamalahmadi and Parast, 2016;Linnenluecke, 2017), especially in the medicine supply chain (Lybecker, 2008). Furthermore, anti-measures to combat counterfeiters are changing with technological advances, more access to medicine and new counterfeit techniques (Lybecker, 2008;Staake et al., 2012). ...
Article
Purpose The purpose of this paper is to understand the role of resilience enablers in combating counterfeits in the medicine supply chain based on a Systematic Literature Review (SLR). The objective is also to help practitioners and scholars as the review revealed that little research has been conducted on selecting and implementing practices to improve resilience to counterfeiting. Design/methodology/approach Based on the literature review, a content analysis was performed for 84 selected papers to explore the potential relationship among resilience enablers and counterfeit anti-measures. Findings This paper contributes to Supply Chain Resilience (SCR) research by summarizing the highly fragmented literature concerning how to combat counterfeiting. The SLR indicated reengineering, collaboration, visibility, innovation, SCR culture and trust as six key enablers to combat counterfeit medicines and identified literature gaps. Moreover, the paper discusses other resilience enablers which have been less studied in the literature and shows new avenues of research. Research limitations/implications This paper is limited in that it is an exploratory literature review and focuses only on three databases over the past 15 years. Furthermore, counterfeit is a rapidly evolving issue and anti-measure studies require frequent surveillance concerning new discoveries. Originality/value The main contribution of this paper is to provide a better understanding of enablers most often associated with counterfeit anti-measures, which, therefore, might help to increase resilience to counterfeit medicines. Moreover, research gaps involving enablers less associated with anti-measures are presented.
... Innovative features that could be placed on pharmaceutical packages represent a viable instrument in confronting the global issue of fake drugs trade. According to a study conducted by Lybecker, educating consumers and allowing them to ensure products authenticity would reduce the prevalence of fake pharmaceuticals on the markets [19]. However, security printing is not the only method that could be used to secure pharmaceuticals from forgery. ...
... According to Lybecker, counterfeiters have less incentive to strive to occupy a greater share of the market, when the risk of detention grows proportionally with the amounts of fake merchandise on the market. In her research, Lybecker also declares that implementation of technologically advanced methods of package protection would likely reduce the share of fake medicine and give more advantages to legal producers to fight counterfeiting crime [19]. ...
... IPRs. Implementation of advanced technologies for securing packages and preventing unauthorized access would increase the costs for counterfeiters and thus would reduce the amount produced and the share of fakes on the market [19]. ...
Article
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The goal of this paper is to assess the existing methods of food and drugs safety man-agement from the standpoint of product packaging and labeling. Several methods of safety management have been introduced in order to protect both supply chains and consumers from fake commodities, yet their effectiveness is a relevant question since counterfeiters keep up with the development and implementation of advanced protec-tive means. Since verifying drugs’ authenticity is a crucial issue nowadays and fake commodities represent significant economic and societal challenges, a new set of counter-measures must be put in place to address the advancing growth of the counterfeit threat. A conceptual model will be used to assess the existing problems of food and drug safety, and practical implications will be derived out of the real life situations that occurred with pharmaceutical manufactures. Analysis of the existing ways of how essential commodities are protected and propositions on how these ways could be upgraded will improve the understanding of food and drugs safety management. The improved system of food and drug safety management implies a set of actions that have to be undertaken in order to form a solid, unified system and thus provide complete assurances of a product’s safety. Not only does the security of supply chains and product traceability systems need improvement, but also existing public policies regarding compulsory food and pharmaceutical certifications need to be reviewed.
... al issues, and the managerial perspective is usually left aside.Coustasse et al (2010), Li (2013, andDimase et al (2016)provide technological solutions to address the issue. There are few literature reviews with a holistic perspective of supply chains. Hoecht andTrott (2014)present a broadly review of anti-measures, but focused on Chinese scenario.Lybecker (2008)presents managerial mechanisms specific to pharmaceutical industry. However, counterfeiting is an ever-evolving threat, in the sense that as soon as new technologies and policies become more developed, counterfeiters start looking for new ways to mimic products without being detected (EVERTSDIMASE et al, 2016). Improving supply chain res ...
... To apply the contractual agreement, monitor supply chain, and enhance brand-protection, companies may create internal structures (CHAUDHRY et al, 2009;WILSON et al, 2016). When the company decide to act in a more proactively manner, it can create an internal team to analyze counterfeiter activities and perform initial investigations (GREEN;SMITH, 2002;LYBECKER, 2008;MERAVIGLIA, 2015). Third, the behavioral group encompasses the anti-measures that influences behavior of supply chain's stakeholders. ...
... Medicines supply chain is one of the most affected by counterfeiting, because counterfeit medicines might harm or be inefficient to patient's health and brand image is a crucial issue (COCKBURN et al, 2005;EVERTS, 2010). To fight medicines counterfeit in supply chain, organizations have to develop strategies which reduce vulnerabilities to this disturbance (COCKBURN et al, 2005;LYBECKER, 2008), and prepare them to deal with disruptive events. Thus, to the development of the following framework, which represents the connections among resilience enablers and counterfeiting anti, 2004) and is counterfeiting (LI, 2013). ...
Conference Paper
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The aim of this article is to identify resilience enablers to combat counterfeits in medicines supply chain. A systematic literature review reveals reengineering, collaboration, visibility, innovation, supply chain risk management culture, trust, and sensing as the seven key enablers to fight counterfeits. These resilience enablers are discussed and a framework is developed to guide future research.
... Hoecht and Trott (2014) present a broadly review of anti-measures, but focused on Chinese scenario. Lybecker (2008) presents managerial mechanisms specific to pharmaceutical industry. However, counterfeiting is an ever-evolving threat, in the sense that as soon as new technologies and policies become more developed, counterfeiters start looking for new ways to mimic products without being detected (EVERTS, 2010;DIMASE et al, 2016). ...
... The following words were elaborated to define constructs, key-words and strings: ("counterfeit*"), ("supply chain*"), ("resilien*"), ("risk*"), and ("medicine*"). SLR focused on three online databases (Web of Science, Scopus, Proquest) and studies published in last 15 years, since counterfeit and resilience themes have significantly grown in recent years (LYBECKER, 2008;PEREIRA et al, 2014;KAMALAHMADI;PARAST, 2016), especially in medicine supply chain (LYBECKER, 2008). Moreover, the review was limited to published peer-reviewed journal articles to ensure the high quality of this paper (DENYER; TRANFIELD, 2009). ...
... The following words were elaborated to define constructs, key-words and strings: ("counterfeit*"), ("supply chain*"), ("resilien*"), ("risk*"), and ("medicine*"). SLR focused on three online databases (Web of Science, Scopus, Proquest) and studies published in last 15 years, since counterfeit and resilience themes have significantly grown in recent years (LYBECKER, 2008;PEREIRA et al, 2014;KAMALAHMADI;PARAST, 2016), especially in medicine supply chain (LYBECKER, 2008). Moreover, the review was limited to published peer-reviewed journal articles to ensure the high quality of this paper (DENYER; TRANFIELD, 2009). ...
... Counterfeit medicines are becoming increasingly prevalent in the global market since the last decade (Liang, 2006;Lybecker, 2007). Although there is a small probability of counterfeit medicines in developed countries, Australia is not safe or excluded from illegal entries of such medicines (World Health Organization, 2008). ...
... While there are many studies done in this area (e.g. Moken, 2003;Liang, 2006;Lybecker, 2007), there is a dearth of research from the consumers perspective (Bian and Veloutsou, 2007;Staake, Thiesse, and Fleisch, 2009;Veloutsou and Bian, 2008). Moken (2003) conducted a study in China and found two overarching issues with respect to counterfeit medicines (Lybecker, 2008;Wyld, 2008). ...
Article
This study investigates consumer perception on generic prescription medicines (GPM) in Australia. Specifically, it examines how consumer concern and consumer knowledge about counterfeit medicines influence attitudes towards generic prescription medicine and willingness to pay more for branded prescription medicines. Data were collected using mail surveys and 281 usable responses were analyzed by using SPSS and AMOS to test the hypotheses and model fit. The consumer concern was found to be a significant predictor of attitude and willingness to pay more for branded prescription medicines but consumer knowledge is an insignificant predictor. Implications of the study and the corresponding recommendations are presented and discussed.
... Counterfeit medicines are becoming increasingly prevalent in the global market since the last decade (Liang, 2006;Lybecker, 2007). Although there is a small probability of counterfeit medicines in developed countries, Australia is not safe or excluded from illegal entries of such medicines (World Health Organization, 2008). ...
... While there are many studies done in this area (e.g. Liang, 2006;Lybecker, 2007;Moken, 2003), there is a dearth of research from the consumers perspective (Bian and Veloutsou, 2007;Staake, Thiesse and Fleisch, 2009;Veloutsou and Bian, 2008). Moken (2003) conducted a study in China and found two overarching issues with respect to counterfeit medicines (Lybecker, 2008;Wyld, 2008). ...
Article
This study investigates consumer attitudes towards generic prescription medicines in Australia. Specifically, it examines how a number of antecedents (e.g. consumer concern, consumer knowledge, consumer trust, perceived risk, subjective norms, and facilitating conditions) influence attitudes and behavioural intention towards buying generic prescription medicines. Some moderating (e.g. price differential) and mediating (e.g. attitudes towards generic prescription medicines) variables are also tested. The Theory of Planned Behaviour (TPB) and Neutralization Theory will be used to explain the underlying relationships between the variables proposed in the research model. A number of implications for businesses will be discussed, suggestions for future research are reviewed and the main contributions of the study will also be delineated.
... This quantitative research also confirms Yang et al.'s (2004) case study findings that firms should combine different strategies to maximize anti-piracy effectiveness. Lybecker (2007), using mathematical modeling, examined the effectiveness of preventive strategies against pharmaceutical patent counterfeiting in developing countries. Specifically, she examined the strategies -adopting new technologies, enforcement, monitoring supply chain and educating consumers and healthcare professionals -and their effect on the cost, value and enforcement of anti-counterfeiting measures. ...
... There is a lack of empirical evidence about whether these strategies against piracy are effective. Although two studies Lybecker, 2007) tested their effectiveness, the results are not definitive as to which strategy is better than others in tackling piracy. For example, pricing strategy may not work for high-tech firms due to high R&D costs and the high cost of marketing to increase product awareness (Yang, Sonmez, Bosworth, 2004). ...
Article
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This paper advances the existing knowledge of anti-piracy strategies by proposing an open source strategy (OS strategy) to alleviate software piracy based on a qualitative, case-based, exploratory study of eight software firms operating in China. The paper shows that the OS strategy is conditionally adoptable, depending on how users are willing to pay for services (market conditions); how critical and complex software is required for upgrading and modifications (software conditions); and how firms can avoid resources overloading and/or shortage (firm conditions). The paper also identifies several new indicators to assess the effectiveness of the OS strategy against piracy. Managerial implications about how to improve business in piracy-ridden environment are discussed.
... Similar to this, in other developing countries, some researchers noticed that poor and most vulnerable people are more likely to purchase cheaper, may be counterfeit, versions of relatively expensive genuine lifesaving drugdwith variable health risk ranging from inconvenience to treatment failure of their, otherwise, treatable diseases to fatality. [38][39][40] This irrational purchase decision seems to contradict the interviewees' observation that Sudanese consumers strongly link price and quality, with high price meaning high quality and vice versa. Nevertheless, this is a common belief among consumers worldwide. ...
Article
Background: The counterfeit drug trade has become widespread and has developed into a substantial threat to both the public's health and the pharmaceutical industry. Objectives: The aim of this study was to seek insights into the determining factors of counterfeit drug purchases among health policy makers and community pharmacists in a developing country. Methods: In-depth qualitative interviews with Sudanese policy makers and community pharmacists were undertaken in 2 Sudanese states, namely Khartoum and Gadaref. A semistructured interview guide was developed by incorporating information from existing literature. A purposive sample of knowledgeable policy makers and community pharmacists was interviewed. Results: Thematic content analysis of the interviews identified 8 major themes: understanding the term "counterfeit drug," presence of counterfeit drugs in the Sudanese market, vulnerability to counterfeit drugs, price-quality inference, awareness of societal consequences of counterfeit drugs, subjective social norms, difference in vulnerability according to demographic characteristics, and education pertaining to counterfeit drugs. Unaffordability of medicines and desperate need were emphasized by both policy makers and community pharmacists as major influencing factors that increased consumers' vulnerability to counterfeit drugs. Conclusions: This study concluded that high prices and the unaffordability of medicines have a major role in increasing vulnerability to counterfeit drugs, in addition to lack of knowledge about counterfeiting and the implications of use of these products. Because very limited studies have been conducted in developing countries to explore perceptions about counterfeit drugs, the present study provides information from which policy makers and key stakeholders in the supply chain can benefit.
... distributors and resellers) and public agencies about how detrimental counterfeiting is and educate to autonomously distinguish between authentic and counterfeit products (Stevenson and Busby, 2015) (1) Unsuitability for average users: these measures cannot be applied for those goods for which costumers cannot be educated to autonomously distinguish genuine from counterfeit products (e.g. drugs, wine) (Lybecker, 2007) (2) No protection against upstream counterfeiting: these measures do not educate customers to recognize if unfair practices occurred before the product is sold ...
Article
Purpose The purpose of this paper is to contribute to the debate on blockchain (BC) adoption for preventing counterfeiting by investigating BC systems where different options for BC feeding and reading complement the use of BC technology. By grounding on the situational crime prevention, this study analyses how BC systems can be designed to effectively prevent counterfeiting. Design/methodology/approach This is a multiple-case study of five Italian wine companies using BC to prevent counterfeiting. Findings This study finds that the desired level of upstream/downstream counterfeiting protection that a brand owner intends to guarantee to customers through BC is the key driver to consider in the design of BC systems. The study identifies which variables are relevant to the design of feeding and reading processes and explains how such variables can be modulated in accordance with the desired level of counterfeiting protection. Research limitations/implications The cases investigated are Italian companies within the wine sector, and the BC projects analysed are in the pilot phase. Practical implications The study provides practical suggestions to address the design of BC systems by identifying a set of key variables and explaining how to properly modulate them to face upstream/downstream counterfeiting. Originality/value This research applies a new perspective based on the situational crime prevention approach in studying how companies can design BC systems to effectively prevent counterfeiting. It explains how feeding and reading process options can be configured in BC systems to assure different degrees of counterfeiting protection.
... blets and packaging to make imitation more costly; they have also invested in radio-frequency identification and other technologies to secure their distribution channels from infiltration (Wertheimer 2008; Lybecker 2008). Despite these efforts, losses from counterfeiting are estimated to be in the order of $45 billion (US) annually (Lybecker 2008). Lybecker (2007) reports that counterfeiting remains a pervasive problem " impacting nations of every size and income level and drugs of every description. " ...
Article
The question as to how society should support pharmaceutical ('pharma') innovation is both pertinent and timely: pharma drugs are an integral component of modern healthcare and hold the promise to treat various debilitating health problems more effectively. The productivity of the pharma research and development enterprise, however, has declined since the 1980s. Many observers question whether the patent system is capable of providing the appropriate incentives for pharma innovation and point to several promising alternative mechanisms. These mechanisms include both 'push' programs - subsidies directed towards the cost of pharma research and development - and 'pull' programs - lump-sum rewards for the outputs of pharma research and development, that is, new drugs. This article reviews the evidence suggesting why our current system of pharma patents is defective and outlines the various alternative mechanisms that may spur pharma innovation more effectively.
... Unfortunately, the illegal trade in counterfeits has now extended to herbal drugs which are mostly used in developing countries [37]. Counterfeiting is also conceded as a major threat to pharmaceutical firms and these firms are now employing various strategies to combat counterfeiting including partnership with governments and health advocates [25,45]. ...
Article
Full-text available
. The illicit trade in counterfeit antimalarial drugs is a major setback to the fight against malaria. Information on public awareness and ability to identify counterfeit drugs is scanty. Aim . Therefore, the present study aimed at assessing public awareness and the ability to identify counterfeit antimalarial drugs based on simple observations such as appearance of the drugs, packaging, labelling, and leaflets. Methodology . A cross-sectional study was conducted using interviewer administered structured questionnaire and a checklist. Respondents were required to spot the difference between genuine and counterfeit antimalarial drugs given to them. Data was analysed using SPSS version 20. Results . The majority of respondents, 163 (55.6%), were able to distinguish between genuine and counterfeit antimalarial drugs. Respondents with knowledge on health effects of counterfeit drugs were more likely to identify genuine and counterfeit drugs than their counterparts ( P = 0.003 ; OR = 2.95; 95% CI: 1.47–5.65). The majority of respondents, 190 (64.8%), perceived the presence of counterfeit drugs to be a big problem to the community. Conclusions . A substantial proportion of respondents were able to distinguish between genuine and counterfeit antimalarial drugs. Public empowerment in identifying counterfeit drugs by simple observations is a major step towards discouraging the market of counterfeit drugs.
... This latter is extremely difficult to be copied since it is fabricated from a type of display using light diffraction generating three-dimensional image pattern. Despite its importance and immense impact on public health, studies evaluating pharmacists and public knowledge about counterfeit medicines are limited ( Shahverdi et al., 2012, Ivanitskaya et al., 2010, Assi et al., 2016, Lybecker, 2007, Pál et al., 2015, Desai et al., 2015, Tipke et al., 2008, Sengaloundeth et al., 2009. ...
Article
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The Knowledge about the use of counterfeit medicines in Lebanon is still very limited. Thus, the objective of this study was to evaluate the degree of awareness of counterfeit medicines among the Lebanese population and the harm associated with their consumption. A cross-sectional study based on a questionnaire survey has been applied where a semi-structured survey questionnaire was distributed, between June 2017 and May 2018, among 750 participants from 98 Lebanese areas to assess their awareness regarding counterfeit medicines. Seven hundred and four participants completed the questionnaire. 55.4% purchased medicines regularly. The main sources of medicines were pharmacies (52.6%), government clinics (16.3%) and private clinics (8.7%). The most common purchased medicines were lifesaving ones (80%). In the majority of cases (71.9%), participants could not identify the manufacturer country. Overall, 46.2% of the participants were aware of counterfeit medicines. 5.4% of the participants experienced self-reporting adverse effects, among which 89.5% of cases were reported to pharmacists or other authorities. Despite the risk, 4.7% of participants were willing to buy a potential counterfeit medicine. In fact, 56. 4% of the participants associated low harm level with the use of counterfeit medicines. Despite their awareness of counterfeit drugs-associated risks, the majority of participants tend to buy them again. Informative public health campaign and health professionals training, to prevent counterfeit medicines-associated harms, should be implemented.
... 11 Douglas and Guell (2004) use US and Canadian data to argue that the DWL in the US market for a large number of drugs is at least 25% of sales. 12 Lybecker (2003) claims that counterfeits may constitute up to 10% of the global market for pharmaceuticals. ...
Article
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Because pharmaceutical markets function poorly, the patent system does not effectively stimulate drug research and development. Instead, it induces large amounts of research into drugs with relatively little incremental therapeutic value, while providing inadequate incentives to innovate in some areas of great therapeutic value. At the same time, patents result in high prices which exclude many users from access to potentially life-saving therapies. In this paper, I propose a novel reward system for pharmaceutical innovation, in which innovators are rewarded based on the incremental therapeutic benefits of their innovation. This would align innovators' incentives with social objectives, and lead to the best possible allocation of research investment. With rewards paid directly to innovators, patents could be compulsorily licensed to enable competitive pricing, thus solving problems of drug access. Government expenditures on rewards could be largely funded through reduced expenditures on patented drugs, and pharmaceutical innovators could continue to earn a healthy return on their investments.
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The United States has been pushing for foreign patent protection through free trade agreements and the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). A gravity model using panel data from 1993 to 2007 suggests that foreign patent protection has not significantly increased the United States' trade of pharmaceuticals. Other factors are strong determinants of the United States exports of pharmaceuticals. In particular, a developing country's participation in the U.S. President's Emergency Plan for AIDS Relief (PEPFAR) significantly increases U.S. exports.
Article
We pursue the previously-noted association between brands and counterfeiting one step further to examine the relationship between brand positioning and anti-counterfeiting, based on a study of 130 well-known foreign brands in China. We test hypotheses about managerial perceptions as to the effects of different brand positioning strategies on the effectiveness of their actions to counter counterfeiting, in other words, whether branding positioning can help to stop counterfeiting, limit damage to firms and maintain brand reputation. Our findings confirm that brand positioning affects anti-counterfeiting effectiveness. Specifically, product reliability and customer services are compatible with efforts to stop counterfeit production, but innovative technologies and product features and functions appear to exacerbate the problem.
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Prior research has examined consumer intentions to purchase fakes, branding strategies and anti-counterfeiting actions, but little attention seems to have been paid to the role of consumers’ ability to discern fakes and branding strategies against counterfeiting. This article, thus, based on a study of 128 multinational managers’ experience in China, examines these inter-relationships. As a result, we address how knowledgeable and experienced managers in branding, consumer consumption and anti-counterfeiting effort perceive consumers’ ability to discriminate fakes from originals interacts with branding strategies, and how such relationship influences the effectiveness of anti-counterfeiting effort. Our findings suggest that consumer discrimination itself has no significant effect on anti-counterfeiting success. However, it significantly interacts with branding strategies to predict a means to mitigate brand damage. That is, consumers’ ability to discriminate fakes from originals appears to undermine efforts to mitigate brand damage from counterfeiting, at least in China when branding is based on improving product features or advertising and promotion. However, if branding emphasises after sales service, consumers’ ability to discriminate was found to enhance firms’ ability to limit counterfeiting damage to brands. Such interactions, however, did not help stop counterfeiting, except that branding based on reliability appears to have such a positive effect.
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Background The counterfeiting of anti-malarials represents a form of attack on global public health in which fake and substandard anti-malarials serve as de facto weapons of mass destruction, particularly in resource-constrained endemic settings, where malaria causes nearly 660,000 preventable deaths and threatens millions of lives annually. It has been estimated that fake anti-malarials contribute to nearly 450,000 preventable deaths every year. This crime against humanity is often underestimated or ignored. This study attempts to describe and characterize the direct and indirect effects of counterfeit anti-malarials on public health, clinical care and socio-economic conditions. Methods A search was performed using key databases, WHO documents, and English language search engines. Of 262 potential articles that were identified using a fixed set of criteria, a convenience sample of 105 appropriate articles was selected for this review. Results Artemisinin-based combination therapy (ACT) is an important tool in the fight against malaria, but a sizable number of patients are unable to afford to this first-line treatment. Consequently, patients tend to procure cheaper anti-malarials, which may be fake or substandard. Forensic palynology reveals that counterfeits originate in Asia. Fragile drug regulations, ineffective law-enforcement agencies and corruption further burden ailing healthcare facilities. Substandard/fake anti-malarials can cause (a) economic sabotage; (b) therapeutic failure; (c) increased risk of the emergence and spread of resistant strains of Plasmodium falciparum and Plasmodium vivax; (d) an undermining of trust/confidence in healthcare stakeholders/systems; and, (e) serious side effects or death. Conclusion Combating counterfeit anti-malarials is a complex task due to limited resources and poor techniques for the detection and identification of fake anti-malarials. This situation calls for sustainable, global, scientific research and policy change. Further, responsible stakeholders in combination with the synthesis and supply of next generation malaria control tools, such as low-cost anti-malarials, must promote the development of a counterfeit-free and malaria-free future.
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The effectiveness of drugs is directly related to the quality thus quality evaluations of medications throughout the production process and distribution are very essential. Counterfeit medications are known to have poor quality as the medications are in the market without the consent of the regulatory body. A total of 11 samples of paracetamol tablets were collected from kiosks, one from each sub city of Addis Ababa, Ethiopia except Addis Ketema where Merkato (the biggest open market in Africa) is located in which two sampling sites were selected. The tablets were assessed for different quality parameters; weight variation, friability, diameter, thickness, assay, disintegration and dissolution using compendial methods. The weight variation, friability, diameter and thickness results were in accordance with the British Pharmacopeia for all samples. The samples also comply with the BP disintegration requirements except a sample from Bole sub city, Paracetamol EPHARM (2110743). The dissolution profiles of the two brands (Asmol and Kelvin) and a generic Paracetamol, EPHARM were evaluated and the results show that all the samples investigated were within the limit set by the Pharmacopeia. All of the samples passed the assay test except Asmol (B0523). In general, the results are in accordance with the previous quality evaluation studies done for Paracetamol tablets obtained from legal markets thus the source of the medication in the illegal vendors might not be necessarily from counterfeiting. This could be due to the fact that Paracetamol tablets are relatively cheaper than other medicines and are over the counter (OTC) products. However, quality evaluation of medications available in the illegal markets in Ethiopia as well as law enforcement should be done to protect the society from counterfeited drugs.
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This article reports the findings of two studies that were designed to determine the effectiveness of several anticounterfeiting strategies on the counterfeit purchasing behavior of the participants, through a mixed methods research approach. In Study 1, in-depth interviews were conducted with 50 consumers of counterfeit brands in order to investigate their attitudes. Drawing on the results, which revealed four different consumer types (struggle, spurious, indifferent, and liberated), Study 2 was undertaken with a further 128 consumers (32 from each type) to further define each group's type and identify the best anticounterfeit strategies suited to each. The findings suggest that counterfeit purchasing may be reduced if a specific strategy is adapted to suit each typology. Overall, positive rather than negative strategies were found to be more effective for the struggle and spurious consumers compared with indifferent and liberated consumers. The findings also reveal that the acquisition of affordable genuine merchandise may be the key to preventing counterfeit purchasing.
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Substandard/counterfeit antimicrobial drugs are a growing global problem. The most common substandard/counterfeit antimicrobials include beta-lactams (among antibiotics) and chloroquine and artemisin derivatives (among antimalarials). The most common type of substandard/counterfeit antimicrobial drugs have a reduced amount of the active drug, and the majority of them are manufactured in Southeast Asia and Africa. Counterfeit antimicrobial drugs may cause increased mortality and morbidity and pose a danger to patients. Here we review the literature with regard to the issue of substandard/counterfeit antimicrobials and describe the prevalence of this problem, the different types of substandard/counterfeit antimicrobial drugs, and the consequences for the individuals and global public health. Local, national, and international initiatives are required to combat this very important public health issue. Copyright © 2015, American Society for Microbiology. All Rights Reserved.
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Eine Vielzahl an Studien legt dar, dass die Möglichkeiten des gewerblichen Rechtsschutzes alleine nicht für ein effektives Schutzsystem in Unternehmen vor Produkt-, Marken- oder Konzeptpiraterie ausreichen. Vielmehr ist ein breites Spektrum an juristischen, technologischen, politischen und managementorientierten Instrumenten in einem integrierten Schutzsystem zu konfigurieren. Hierbei treten Probleme im Kontext der Strategiedefinition, Maßnahmenwahl und Informationsgewinnung bei Pirateriefällen auf. Neben Wissensdefiziten bezüglich entsprechender Schutzmöglichkeiten sind insbesondere Fehler in der Betrachtung bzw. die Nichtbeachtung spezifischer Ressourcen und Kompetenzen bei der Maßnahmenselektion und dem Instrumenteneinsatz zu beobachten. Ziel des vorliegenden Beitrags ist somit die Untersuchung der Ansatzpunkte des Ressource- bzw. Competence-Based-View (RBV/CBV) zur Generierung einer Schutzkompetenz als Erklärung unternehmerischer Potenziale im Kampf gegen (Produkt-) Piraterie. Hierfür werden in einem ersten Schritt die Erklärungsinhalte des RBV/CBV erarbeitet. Anschließend wird mittels einer qualitativen empirischen Untersuchung die grundlegende Ausarbeitung der Schutzkompetenz vorgenommen.
Article
Counterfeit drugs can hurt patients and harm the pharmaceutical industry. In 2006, the International Medical Products Anti-Counterfeiting Taskforce expressed a need to generate more and better data to calculate a worldwide prevalence of counterfeiting. This review analyzes field test data that were published in the time-frame January 2007 to December 2016, were accessible via Pubmed, and which addressed the prevalence of counterfeit drugs. Based on the 41 studies identified, it is still not possible to make a reliable statement about the prevalence of counterfeit drugs due to the heterogeneity of the results. To make further progress in this area, both the quantity and quality of documented field tests should be increased. Without a differentiated analysis considering therapeutic class, source and country of counterfeit drugs, it will remain difficult to identify the root causes of market infiltration and useful points of attack to combat them. Studies with high sample power and randomized sampling, packaging inspection and detailed chemical analysis will be necessary to correctly identify (even professional) counterfeit samples. The classification system presented in this review should help to calculate not only the prevalence of counterfeit drugs but also the risks to the patient associated with different types of counterfeited medicines.
Purpose The purpose of this paper is to analyze how companies develop mitigation capabilities in their supply chains in order to reduce the negative impacts of counterfeiting. Design/methodology/approach Five cases with two types of supply chain are analyzed: B2B (clothing, footwear and toys) and B2C (automotive). Data gathering was based on interviews, while secondary data were obtained directly from trade associations. Findings Companies presented different levels of proactivity for counterfeiting resilience. Companies with a lower level of appetite for risk are more proactive and have a broad number of mitigation capabilities. These companies develop intelligence that is required for combating counterfeiting and the capabilities needed for addressing its ex ante and ex post phases. Research limitations/implications The research examines a complex and controversial subject about which there is limited information. The case studies are limited to Brazilian companies and the local subsidiaries of foreign companies. Therefore, the specific context may influence the study findings and reduce their generalizability. Practical implications Mitigation capabilities enable companies to minimize the negative impact of counterfeiting and make companies more resilient to counterfeiting activities. The findings indicate that when managers allocate resources in earlier phases of counterfeiting, losses are lower. Originality/value This study shows the development process of mitigation capabilities in the ex ante and post-disruption phases of counterfeiting.
Article
Objectives Counterfeit/falsified medicines (CFM) have serious public health consequences in both developed and less developed countries. The study aimed to assess public awareness and views towards CFM in Lebanon. Methods The study used convenience sampling and was based on cross‐sectional surveys of the public that took place in different regions in Lebanon, using two questionnaires (Q1 and Q2). Key findings A total of 849 participated in the study (464 Q1 and 385 Q2). The majority (93.4%) of respondents reported being aware of the term CFM, and television was the source of awareness for 84.4% of respondents. Additionally, 28.9% of respondents did not know how to compare CFM to their original, 19.6% did not answer the question, and only 3.7% reported that the original medicine would have the hologram on the package. Respondents reported the best way to avoid buying CFM would be via a trustworthy pharmacist (83.4%). The majority (83.1%) disagreed that CFM were as good as the originals, and 46% agreed that the original medicines were highly priced, and CFM were of better price value. Moreover, respondents reported agreeing that pharmacists who dispensed CFM were unprofessional (81.3%) and unethical (83.1%). Conclusions The awareness, experiences and views of respondents showed the perceived risk that CFM have on public health and the need to develop continuous awareness and educational campaigns about the safety and efficacy of medicines. Additionally, this study highlighted the need for the government and regulatory authorities to apply and enforce the law against counterfeiters.
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No presente trabalho analisa-se o abuso de esteroides anabólico-androgênicos sob a perspectiva jurídico-penal. Utilizando uma metodologia dedutiva, e com análise de posicionamentos doutrinários, jurisprudenciais e de dispositivos legais, verificou-se que o doping nos esportes como uma forma de melhorar as habilidades físicas em busca de fama e bem-estar encontrou a antiga obsessão humana de conseguir uma imagem corporal mais atraente. Daí, portanto, o declínio de determinada incriminação sobre alguns comportamentos em nome dos princípios fundamentais do direito penal.
Conference Paper
The presence of substandard and falsified (SF) medical product at a significant level has become one of the threat to public health in Indonesia. BPOM as National Regulatory Authority in Indonesia has developed and implemented a policies to prevent, detect and act towards SF medical product. Nevertheless, these policies implementation has not effective to eliminate the threat. This study aimed to explore the gap exists in the policy implementation and develop a strategy using collaborative stakeholder approach among government institution and non-government organization. The study analyzes fact and data gathered by using in-depth interviews qualitatively involving 7 participants from two different categories. As a result, there are two main factors: 1) A different perception amongst the participants and 2) An obstacles to the policy implementation. Participants from non-government organization agreed that to eradicate SF required stakeholder collaboration to overcome the challenges. Furthermore, this study proposed an SF task force nationally model to empower the stakeholder’s capacity, especially civil society, by implementing the science-technology-society concept. Through this model, the task force can mobilize resources response to every SF medical problems.
Article
Consumption of quality-assured medicines is expected to maintain or improve population health. Yet in a number of situations, what is realized is lower health benefits or magnified safety risks. Recognizing the public health implications of safety risks or medication-related harm, and that some types of harm are avoidable, the World Health Organization has initiated the third Global Patient Safety challenge on Medication Safety. Under the term "Medication Without Harm", this Challenge aims to assess the scope and nature of avoidable medication-related harm, create a framework for intervention and develop national guidance and tools to support safer medication use. The global target under the Challenge is to reduce the level of severe avoidable medication-related harm by 50% over a five-year period or within the next five years. Given a higher morbidity and mortality due to medication-related harm in low-income countries, this paper evaluates what needs to be done in low-income countries in order to achieve the global target. The ideal solution advocated requires that health planners in each low-income country determine what fraction of safety risks or harm can be prevented; and the relationship between number or frequency of avoidable harm or safety risks and the resource costs of treatment or prevention. In the absence of such information, this paper discusses a number of prevention strategies that might help; arguing that the period over which avoidable medication-related harm can be reduced by 50% will depend on whether significant continuous investments in health-system strengthening are made prior to and within that period.
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This chapter examines piracy and the possible corporate strategies against it. First, it explains how IP can lose its market value due to obsolescence, imitation, or infringement. Second, I discuss piracy as a concept and a typology with ever-increasing activities. Third, the chapter details the impact of piracy on the key stakeholders: countries, companies, and consumers. Next, it explores a combination of reasons derived from political economy, culture, businesses, and consumers to explain the causes behind the prevalence of piracy. Finally, it recommends corporate actions and appeals to external assistance for the prevention, cure, and alleviation of piracy.
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There is growing universal concern regarding counterfeit medications. In particular, counterfeit antimicrobial drugs are a threat to public health with many devastating consequences for patients; increased mortality and morbidity and emergence of drug resistance. In addition, physicians treating these patients lose their confidence in the medications used and report high levels of bacterial resistance. The problem with fake and suboptimal medications got worse with the advent of the World Wide Web; a significant proportion of medications that are sold through Internet pharmacies is counterfeit. Various initiatives of the WHO (the International Medical Products Anti-Counterfeiting Taskforce) are hopefully going to tackle this very important public health issue. In this article, we review the available evidence in peer-reviewed articles and World Wide Web information resources regarding the issue of counterfeit antimicrobials.
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This study investigates the returns to R&D for 100 new drugs introduced into the United States during the decade of the 1970s. In contrast to prior studies, it incorporates several significant structural changes that have occurred in the pharmaceutical industry during the 1980s. These include higher real drug prices and a greater degree of generic competition. A major finding is that the return on R&D for the average new drug is approximately equal to the 9 percent industry cost of capital. However, the performance of new drugs introduced during the latter half of the 1970s was markedly better than that of early 1970s introductions. This latter finding is consistent with the more rapid rate of industry growth in real R&D expenditures. The study also finds that the variation in returns is highly skewed, with only the top 30 drugs covering mean R&D costs on a fully allocated basis. Finally, it is shown that real drug price increases in the 1980s were necessary for the average new drug introduction to recover its R&D costs.
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After the economic crisis of the early 1980s, developing countries adopted new policies regarding intellectual property protection only as a result of a coercive U.S. strategy, consistent with a neorealist explanation based on power. Targeted countries have complied only on paper, not in practice, however. In contrast, hegemonic powers have not employed overt coercion in the area of antitrust policy, consistent with interpretivist neoliberalism, which emphasizes learning and voluntarism. A nuanced analysis of power and ideas is necessary to account for the differences between the cases. The different mechanisms through which the new policies have been adopted suggest different prospects for these new policies.
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We study the positive and normative effects of counterfeiting, i.e., trademark infringement, in markets where consumers are not deceived by forgeries. Consumers are willing to pay more for counterfeits than for generic merchandise of similar quality because they value the prestige associated with brand-name trademarks. Counterfeiters of status goods impose a negative externality on consumers of genuine items, as fakes degrade the status associated with a given label. But counterfeits allow consumers to unbundle the status and quality attributes of the brand-name products, and alter the competition among oligopolistic trademark owners. We analyze two policies designed to combat counterfeiting: enforcement policy which increases the likelihood of confiscation of illegal items, and the imposition of a tariff on low-quality imports.
Article
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This paper offers a discussion to the question of why there are strong pressures on developing countries for introducing and/or reinforcing patent protection to pharmaceutical drugs. Patent protection is a crucial policy for sustaining growth in the research and development intensive pharmaceutical industry of developed countries. For legal and economic reasons, patents sustain high drug prices, which in turn provide rents to undertake further research and development, which in turn allows the invention of new drugs, etc., etc. In recent years, increasing drug safety regulations discussed in the paper, have eroded incentives for developing new drugs by the pharmaceutical industry in developed countries. Furthermore, competition from the generic drug companies has increased quite significantly. Restoring effective patent protection in industrial countries and pushing developing countries to introduce/strengthen their patent policies has become a critical component for sustaining growth of the multinational pharmaceutical companies. How developing countries will respond and how the multilateral trade negotiations intellectual property are still to be seen.
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The idea behind patent policies is to increase the output of commercially useful innovations by creating a transitory propertyy right that allows the inventor to appropriate part of the returns from his invention. In developing countries, two types of considerations need to be addressed before adopting/strengthening patent policies. First, there are issues of designing an appropriate patent system and this includes considerations of administrative efficiency, the impact on government expenditures, and the legal administration of intellectual property rights. Second, and more fundamentally, the investments that patent incentives trigger in research and development are one of many uses for scarce savings. Returns to investments protected by patents depend on the productivity of the inventive process and the industrial applicability of innovations. In situations where the innovative processes might be low, care should be taken that scarce investment resources are not wasted in unproductive research and development endeavors. The paper also argues that in unstable and protected economies, the social returns of patented innovations might be low. The analysis suggests a sequencing of policies where patent protecion should be strengthened once developing countries have achieved a level of savings compatible with investments in risky research and development projects, relative economic stability and competition through open market policies.
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The potential for parallel trade in the European Union (EU) has grown with the accession of low price countries and the harmonisation of registration requirements. Parallel trade implies a conflict between the principle of autonomy of member states to set their own pharmaceutical prices, the principle of free trade and the industrial policy goal of promoting innovative research and development (R&D). Parallel trade in pharmaceuticals does not yield the normal efficiency gains from trade because countries achieve low pharmaceutical prices by aggressive regulation, not through superior efficiency. In fact, parallel trade reduces economic welfare by undermining price differentials between markets. Pharmaceutical R&D is a global joint cost of serving all consumers worldwide; it accounts for roughly 30% of total costs. Optimal (welfare maximising) pricing to cover joint costs (Ramsey pricing) requires setting different prices in different markets, based on inverse demand elasticities. By contrast, parallel trade and regulation based on international price comparisons tend to force price convergence across markets. In response, manufacturers attempt to set a uniform ‘euro’ price. The primary losers from ‘euro’ pricing will be consumers in low income countries who will face higher prices or loss of access to new drugs. In the long run, even higher income countries are likely to be worse off with uniform prices, because fewer drugs will be developed. One policy option to preserve price differentials is to exempt on—patent products from parallel trade. An alternative is confidential contracting between individual manufacturers and governments to provide country—specific ex post discounts from the single ‘euro’ wholesale price, similar to rebates used by managed care in the US. This would preserve differentials in transactions prices even if parallel trade forces convergence of wholesale prices.
Article
Until recently the most infamous internationally known example of fake drug dealing was Graham Greene's fictional account of a British fake penicillin peddler who was eliminated in the sewers of postwar Vienna in The Third Man .1 Unfortunately, malevolent dealings in counterfeit drugs are very much a contemporary reality. Notorious recent real examples include neomycin eye drops and meningococcal vaccine made of tap water; paracetamol syrup made of industrial solvent; ampicillin consisting of turmeric; contraceptive pills made of wheat flour; and antimalarials, antibiotics, and snake antivenom containing no active ingredients.2 3 4 5 6 7 8 9 In a recent survey of pharmacies in the Philippines, 8% of drugs bought were fake (quoted by Wondemagegnehu2). A countrywide survey in Cambodia in 1999 showed that 60% of 133 drug vendors sampled sold, as the antimalarial mefloquine, tablets that contained the ineffective but much cheaper sulphadoxine-pyrimethamine, obtained from stocks that should have been destroyed, or fakes that contained no drug at all. 3 4 In another recent survey, 38% of tablets sold in five countries in mainland South East Asia as the new antimalarial artesunate were fake.5 Artesunate is …
Many doctors know the story of "Mr. Wright," who was found to have cancer and in 1957 was given only days to live. Hospitalized in Long Beach, Calif., with tumors the size of oranges, he heard that scientists had discovered a horse serum, Krebiozen, that appeared to be effective against cancer. He begged to receive it. His physician, Dr. Philip West, finally agreed and gave Wright an injection on a Friday afternoon. The following Monday, the astonished doctor found his patient out of his "death bed," joking with the nurses. The tumors, the doctor wrote later, "had melted like snow balls on a hot stove." Two months later, Wright read medical reports that the horse serum was a quack remedy. He suffered an immediate relapse. "Don't believe what you read in the papers," the doctor told Wright. Then he injected him with what he said was "a new super-refined double strength" version of the drug. Actually, it was water, but again, the tumor masses melted. Wright was "the picture of health" for another two months --until he read a definitive report stating that Krebiozen was worthless. He died two days later. Doctors who know this story dismiss it as one of those strange tales that medicine cannot explain. The idea that a patient's beliefs can make a fatal disease go away is too bizarre. But now scientists, as they learn that the placebo effect is even more powerful than anyone had been able to demonstrate, are also beginning to discover the biological mechanisms that cause it to achieve results that border on the miraculous. Using new techniques of brain imagery, they are uncovering a host of biological mechanisms that can turn a thought, belief or desire into an agent of change in cells, tissues and organs. They are learning that much of human perception is based not on information flowing into the brain from the outside world but what the brain, based on previous experience, expects to happen next.
Article
In earlier papers, I found that the strength or weakness of a country's system of intellectual property protection seems to have a substantial effect, particularly in high-technology industries, on the kinds of technology transferred by many US firms to that country. Also, this factor seems to influence the composition and extent of US direct investment there, although the size of the effects seems to differ from industry to industry. The present paper extends these results in two ways. First, the analysis is expanded to include Japanese and German firms, which, of course, are responsible for massive direct investment in developing countries. Second, an econometric model is constructed to estimate the effects of the strength or weakness of intellectual property protection in a developing country on the amount of US direct investment there. The findings indicate that, in relatively high-technology industries like chemicals, pharmaceuticals, machinery, and electrical equipment, a country's system of intellectual property protection often has a significant effect on the amount and kinds of technology transfer and direct investment to that country by Japanese and German, as well as US firms. Also, when a variety of relevant factors are held constant in an econometric model, the effects of such protection on US foreign direct investment are substantial and statistically significant.
Article
The American research-intensive pharmaceutical industry is the world's most successful and competitive and one of the crown jewels of the U.S. industrial base. Among the principal reasons for its success is an unparalleled commitment to research and development, which in turn yields an impressive array of advanced biomedical therapies. Intellectual property protection is a cornerstone of the industry's existence. Like other industries, such as computer software and audio/video recordings, a major portion of the industry's cost of production is incurred in the development stage, rendering unauthorized copying both easy and profitable. The GATT Uruguay Round and the North American Free Trade Agreement have set high standards for pharmaceutical and other industries' intellectual property protection. Unfortunately, there will be delays until numerous countries implement these standards. These delays harm both the industry worldwide and individual countries where patent protection would attract investment and stimulate research and development.
Article
Policy makers and analysts require a better understanding of the effect, if any, that a developing country's system of intellectual property rights protection has on the transfer of technology to that country through foreign direct investment. Based on a combination of survey data, interview studies, and statistical analysis, the paper finds that the strength or weakness of a country's system of intellectual property protection seems to have a substantial effect, particularly in high-technology industries, on the kinds of technology transferred by many US firms to that country. Also, this factor seems to influence the composition and extent of US direct investment there, although the size of the effects seems to differ from industry to industry. The statistical analysis is only a beginning; further efforts should be made to refine and extend the results. Also, our findings pertain entirely to US direct investment; it would be worthwhile to extend the coverage to Japanese and European investment. -from Author
Article
This paper estimates the changes in prices, profits and social welfare arising from increased patent protection for pharmaceuticals in a number of developing countries. Two market structures are proposed and comparisons are made between the situations where there is no patent protection and after the introduction of patent protection. The monopolist model of the post-patent market structure is refined by introducing a Nash-Bertrand duopoly, with non-patentees acting under compulsory licences and the same comparisons made. Lags between the adoption of legislation and its impact are discussed and the effects of retroactive legislation compared with non-retroactive patenting. Prices of patented drugs in three countries are then compared and possible price changes discussed. Finally, for larger countries, or a group of small countries, the effects of patent protection are calculated for the same scenarios and the incentives for increased research and development examined. The paper concludes that the effects of patent protection are sensitive to assumptions about market structure and price elasticity.
Article
AbstractA system of exchange for marketing pharmaceuticals to developing countries is described, identifying the key conflicts among its constituents. A research agenda for marketing is suggested, involving both systemic characteristics and exchange behaviours. A framework for public policy appropriate for governments in the developing world is proposed.RésuméUn système d'échanges pour les études de marché des produits pharmaceutiques dans les pays en voie de développement est décrit, identifiant les conflits clés parmi ses constituants. Un agenda de recherche pour les études de marché est suggéré intégrant les caractéristiques systématiques et les échanges de comportement. Un cadre de politique publique convenable pour les gouvernements dans les pays en voie de développement est proposé.
Article
This paper surveys the state of international patent systems and discusses the economic effects and problems caused by differences in international patent rights, focusing particularly on technology creation, diffusion, transfer, industry, and trade issues. The paper also evaluates the merits of harmonizing or standardizing international patent regimes so as to mitigate the adverse economic effects of regime differences. The conclusion reached is that internationally coordinating some minimum standards for patent laws and procedures would be a practical solution to some of the high transactions costs that differences in international patent regimes impose on world trade and technology diffusion.
Article
Product and trademark counterfeiting in the People's Republic of China is now the most serious counterfeiting problem in world history and continues to be on the rise. Industry estimates put losses in the billions, if not tens of billions, of dollars per year. A recent trend is a sharp increase in the export of counterfeit products from China to countries and territories abroad, indicating that China has become the source of a counterfeiting problem that threatens trademarks of multi-national companies doing business in China on a global basis. The unprecedented magnitude and severity of the counterfeiting problem raises a number of immediate questions. How did such a problem arise in the span of little more than a decade and what is being done to improve the situation? The origins of the counterfeiting problem can be traced to several interrelated sources: China's rapid economic growth, including the rise of a consumer economy and the introduction of famous brands into China's markets; an economic and political system in transition; and a nascent legal system that is unable to anticipate and control the many new problems generated by swift social and economic changes. The Article explores each of these sources and shows how they have contributed to the rise of the counterfeiting problem. In particular, the Article focuses on the most serious barrier to effective enforcement against counterfeiting in China today: local protectionism or the tendency of local governments to protect counterfeiters and infringers on the basis that such economic activity is helpful to the local economy. No real progress can be made against counterfeiting unless the PRC makes a political commitment at the highest levels of government. A firm political will is necessary because there are serious political and social costs associated with any real crackdown on counterfeiting. Such political will does not seem be forthcoming in the near future. None of the major relevant actors, PRC government authorities, brand owners, or the United States government (and other foreign governments) appear to be ready to push for a political commitment from the top echelons of the PRC. China's WTO accession, which requires compliance with TRIPS, does not appear to change the status quo as the counterfeiting issue has not been raised as part of the WTO and TRIPS compliance negotiations. For the foreseeable future, it seems unlikely that there will be a dramatic improvement in China's counterfeiting problem -- rather there is a possibility that the problem might get worse despite all of the efforts of brands owners. To date, counterfeiting does not seem to have harmed the development of China's economy and its efforts at modernization. All factors of importance to the Chinese -- overall growth of the economy, the influx of foreign investment, and the rise in consumer wealth and spending -- show that China continues to be on course despite a counterfeiting problem that has no parallels in history. History and conventional wisdom indicate that no nation can reach high levels of modernization and industrialization without strong protection for intellectual property. To date, this lesson does not seem applicable to China and it remains to be seen whether China can defy history.
Article
The counterfeiting of trademarks, brands, and other forms of intellectual property in the People's Republic of China ("PRC") is now the most serious counterfeiting problem in the history of the world and appears to be still on the rise. Estimates put the losses from counterfeiting suffered by trademark and brand owners doing business in China in the billions or even tens of billions of dollars per year. The unprecedented severity and magnitude of the counterfeiting problem raises a number of immediate questions. How did a problem of this magnitude arise, and what measures are being undertaken to improve the current situation? This Article examines counterfeiting in China, its origins, and problems in enforcement. It also provides some suggestions for alleviating the problem, and concludes with some observations about the future of counterfeiting in China. This examination is timely because of the seriousness of the problem, the increased attention given to counterfeiting, and China's on-going efforts to bring existing laws into conformity with the World Trade Organization's Agreement on the Trade Related Aspects of Intellectual Property as part of the negotiations to bring China into the WTO.
Article
To what extent would the rate of development and introduction of inventions decline in the absence of patent protection? To what extent do firms make use of the patent system, and what differences exist among firms and industries and over time in the propensity to patent? These questions are in need of much more study. This paper, which reports the results of an empirical investigation based on data obtained from a random sample of 100 U.S. manufacturing firms, provides new findings bearing on each of these questions.
Book
Analytical and empirical work in economics is paying increasing attention to the vital questions of encouraging innovation and diffusing information in a world where creativity and knowledge lie at the foundation of economic progress. There are numerous complex and fascinating problems for economists to grapple with in the general area of technical change and growth. These range from deep mathematical treatments of the nature of economic growth in the presence of non-rival knowledge goods, to extensive empirical analysis of the role of information acquisition in economic development, international trade, and public economics. Inevitably, this attention to the growing importance of the knowledge economy places growing emphasis on the determinants of innovation and learning, especially intellectual property rights (IPR). A burgeoning wealth of economics literature seeks to understand the dynamic incentive effects of IPR, the problems they raise for competition, their significance for international technology transactions, and how they fit into broad strategies for economic development. In this environment, one would expect that economics departments would begin to offer courses dedicated to studying such issues specifically within the context of IPR. Certainly, the formal study of IPR has become central in law schools and management programs in business administration colleges. However, they have yet to take on a significant role in the curriculum of economics departments in the United States, either at the undergraduate or graduate level.
Book
The increasing use of activist unilateral policies by the United States to open foreign markets or deter unfair trading practices is highly controversial. This study reexamines the arguments for and against reciprocity and retaliation in light of actual experience since the early 1980s, especially the more aggressive use by the United States of section 301 of the Trade Act of 1974, which gives the president broad authority to retaliate against "unjustifiable, unreasonable, or discriminatory" foreign trade practices. It analyzes the advantages and disadvantages of these policies and the circumstances under which they are likely to succeed or fail. The study contains an empirical assessment of all section 301 cases concluded between 1975 and 1993. It also provides detailed case studies of various trade conflicts including the Super 301 negotiations involving Japan, Brazil, India, Taiwan, and Korea, financial services disputes with Japan and the European Union, the US-EU conflict over oilseeds, and the US-Japan beef and citrus negotiations.The authors recommend against the future use of Super 301 and urge that the United States pursue a strategy of aggressive multilateralism in the new World Trade Organization.
Article
Artesunate is a key antimalarial drug in the treatment of multidrug- resistant Plasmodium falciparum malaria in southeast Asia. We investigated the distribution of counterfeit artesunate tablets by use of the validated, simple, and inexpensive Fast Red TR dye technique. We also aimed to identify distinguishing characteristics of the fake drugs. Of 104 shop-bought "artesunate" samples from Cambodia, Laos, Myanmar (Burma), Thailand, and Vietnam, 38% did not contain artesunate. Characteristics such as cost and physical appearance of the tablets and packaging reliably predicted authenticity. The illicit trade in counterfeit antimalarials is a great threat to the lives of patients with malaria. The dye test will assist national malaria control authorities in urgently needed campaigns to stop this murderous trade.
Article
The research and development costs of 93 randomly selected new chemical entities (NCEs) were obtained from a survey of 12 U.S.-owned pharmaceutical firms. These data were used to estimate the pre-tax average cost of new drug development. The costs of abandoned NCEs were linked to the costs of NCEs that obtained marketing approval. For base case parameter values, the estimated out-of-pocket cost per approved NCE is $114 million (1987 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a 9% discount rate yielded an average cost estimate of $231 million (1987 dollars).
Article
Major criticisms of pharmaceutical marketing are summarized and industry responses identified. Analysis of this industry case study highlights ethical issues in marketing and the broader problem of harnessing enterprise to ensure quality of life and public good. A social control of business model is presented and the limits of corporate social responsibility delineated.
Article
Millions of the world's poor have no access to life-saving drugs. Neither the public nor private drug distribution system caters for their needs. The Third World poor suffer from the unequal distribution of limited public health resources and dangerous sales pressures in the rapidly expanding and largely uncontrolled commercial markets. They lack purchasing power to influence the dynamics of the market which is characterized by a high turnover in profitable, but inessential products and expensive brand-name drugs. Comprehensive national drug policies to rationalize both public and private sectors and improve the availability of essential drugs are urgently needed.
Article
Drug availability, distribution and control are major concerns in health development. In contending that the concern in Nigeria now is as much with the availability of, as well as the dangers in drugs, this essay examines the 1990 paracetamol poisoning which resulted in the death of 109 children. It is explained that this tragedy, and others before it, are more fully understood within the context of a seemingly free-for-all drug scene on the one hand, and a health care system which excludes the majority on the other. The implication of this "drug swindling", of which the paracetamol tragedy is a part, are discussed. We conclude that whereas more meticulous self regulation will most certainly provide a greater safeguard against recurrence, the war on counterfeit and poisonous drugs can hardly be won without consumer initiative and more effective regulatory system.
Article
Public attention and debate recently have focused on access to treatment of acquired immunodeficiency syndrome (AIDS) in poor, severely affected countries, such as those in Africa. Whether patents on antiretroviral drugs in Africa are impeding access to lifesaving treatment for the 25 million Africans with human immunodeficiency virus infection is unknown. We studied the patent statuses of 15 antiretroviral drugs in 53 African countries. Using a survey method, we found that these antiretroviral drugs are patented in few African countries (median, 3; mode, 0) and that in countries where antiretroviral drug patents exist, generally only a small subset of antiretroviral drugs are patented (median and mode, 4). The observed scarcity of patents cannot be simply explained by a lack of patent laws because most African countries have offered patent protection for pharmaceuticals for many years. Furthermore, in this particular case, geographic patent coverage does not appear to correlate with antiretroviral treatment access in Africa, suggesting that patents and patent law are not a major barrier to treatment access in and of themselves. We conclude that a variety of de facto barriers are more responsible for impeding access to antiretroviral treatment, including but not limited to the poverty of African countries, the high cost of antiretroviral treatment, national regulatory requirements for medicines, tariffs and sales taxes, and, above all, a lack of sufficient international financial aid to fund antiretroviral treatment. We consider these findings in light of policies for enhancing antiretroviral treatment access in poor countries.