International companies declare war on fake drugs

Zakki P. Hakim, The Jakarta Post/Jakarta

A man who had high blood pressure died of a heart attack. His insurance company suspected him of committing suicide because a post mortem showed had not taken his prescribed medicine. The company refused to pay the claim. After an investigation, it turned out the man had taken the drugs during the last months of his life -- but they were fakes.

The insurance company eventually paid his claim, said Parulian Simanjuntak, the executive director of the International Pharmaceutical Manufacturers Group (IPMG).

"Fake drugs in circulation in this country have reached an alarming level, they are a real threat to consumers," he told The Jakarta Post on Thursday after speaking in a seminar -- Fighting Counterfeiting for a Better Future -- held by the Indonesian Anti-Counterfeiting Society (MIAP).

MIAP groups leading international and domestic manufacturers including Aqua-Danone, Epson, Grundfos, IPMG, LVMH (Louis Vuitton) Fashion Group, Microsoft, Philips Electronics, Procter & Gamble, Sara Lee and Unilever. It is chaired by PT Unilever's Ian Barty.

Parulian told the seminar the annual turnover of counterfeit drugs in the country was worth about US$500 million, compared to the industry's total market size of about $2 billion.

The sales of fake drugs, he said, were equal to the combined annual sales of up to 50 pharmaceutical firms employing some 15,000 workers.

He said most fake medicines here were smuggled from China, and most fake drugs found in raids were pain killers, weight-loss or lifestyle drugs, such as those that helped impotency problems.

"Counterfeit drugs impact on jobs in the pharmaceutical industry and ruin a country's reputation, which could lead to declining exports," Parulian said.

MIAP deputy chairman Bambang Sumaryanto said an increasing number of manufacturers had joined the group and were complaining about a disturbing level of counterfeit products in this country.

"We are joining together to fight counterfeiting," he said.

Bambang said the widespread distribution of counterfeit products would end up hurting Indonesia's economy.

MIAP plans to conduct a joint study with the University of Indonesia's Institute for Economic and Social Research to assess the impact counterfeiting had on the economy and the business sector, he said.

"We expect to finish the study in mid-next year," Bambang said.

In the past decade drugs, food and beverages, fashion products, footwear, batteries, car parts, lubricant oils, cigarettes, computer hardware and electronic components, are some of the products known to have been counterfeited, comprising a total of 1,500 registered international brands.

Indonesia has laws to prosecute counterfeiters, however, most industry players have complained about weak law enforcement.

Businesses say fighting counterfeiters individually is costly and requires the constant monitoring of markets, especially for products like food and beverages and drugs.

"We have created MIAP to make people realize the dangers of using fake products. Publicity and advocacy are the most effective tools to fight counterfeiting," Parulian said.

While fake shoes might not be as deadly as fake drugs, counterfeiting meant Indonesia had lost potential markets that could have employed millions of workers, he said.