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Underworld Inc - Fake Pharma


The real manufacturers

Yet another topic we need to address is the fact that most active substances (i.e. the molecule that actually produces the medical effect - also called API's) are now shipped from China, India or Pakistan. The first instinct of any person in a "developed" country is to wince. Yet, it should not be like that. These three countries have massive organic chemical industries which produce massive amounts of actives which are then shipped all over the world for Generics and Brand Leaders alike to use. You have probably been using active compounds from those three countries for more than a decade now without even knowing it.

But what happens when you have a massive manufacturing capacity selling at a rock-bottom price but all recognizable generics and brand leaders have already completed their purchases? Well, you sell to anyone without too many questions. And this links with our previous differentiation between copies and fakes. Medication produced with these actives, even if manufactured in home-made settings, still contain active substances with the same quality that your brand leader uses. They are not fakes but a lesser quality copies.

Although it is true that the less formal the pharmaceutical formulation process the higher the room for error, it is also true that manufacturers of API's do not know their clients. As such they send them the very same quality of drug that any other "legal" formulator would get. In general terms, if the quality of the API is good enough for the "legal" formulator it is certainly good enough for the "illegal" one. And so these API's that are so hotly chased by "custom officers" who are "fighting a merciless opponent motivated by profits with a genuine contempt for consumers" most of the time are the exact same ones that you are buying in your pharmacy!

The death epidemic

According to the documentary one study shows that 100.000 people die each year from fake pharma. A lot right? Well, let's assume for a second that that's correct. Let's see the numbers in regards to world population:

Fake pharma: 0.001%

Traffic accidents: 0.02%

Famine: 0.05%

Wars: 0.13%

Natural causes: 0.95%

Are you bored yet? The amount of deaths due to "fake pharma" is not even a blip in the radar screen. But let's say that this number is far too low. Let's say that it is 1 million as the Interpol says (because they don't have a vested interest in inflating those numbers…). This would raise the percentage to about 0.013% or about the same as wars. A lot right? Well, it so happens that this number is more or less identical to the percentage of deaths that occurs world-wide due to the use of "legal" medications! This is telling us that the safety profile of so-called "fake pharma" is identical to the safety profie of "legal pharma"!!! What this is telling us is that all those deaths due to "fake pharma" are actually death due to misuse of medication in the same manner as "legal" medication is misused! Geee…what a surprise! NOT!

But this is not really the point. What we would like to know is how many lives were saved per year due to the existence of counterfeit pharmaceuticals? How many people are alive today because they can afford to buy counterfeits but not "legal" medications? We don't know. And why we don't know? Because there is a vested interest in not knowing. Big Pharma and Generics need the government supporting their monopoly hence they don't want to know. Politicians need to support Big Pharma and Generics monopolies so they don't want to know.

Throwing numbers in the air without being able to estimate the risk/reward ratio is pointless but what we suspect very strongly is that counterfeit medications produce a disproportionate wellbeing when compared to their potential risks. This is so because its use is widespread in "non-developed" countries where "legal" medication is simply too expensive.

The dark side

So far we have analyzed only the positive side of counterfeit medications, but is there a darker side? Sure there is! Absolutely. There are many documented cases of people who have been severely injured or who have died due to true "fake pharma"; the type of pharma that either contains no active, insufficient active, or toxic substances. They do exist and they are real. No questions about them and this situation is indeed serious. But, again, we need to look at the bigger picture. What is the percentage of true "fake pharma" to counterfeit pharma? We don't know. Why don't we know? Because neither governments nor Big Pharma is releasing those numbers. And why would they choose not do so? Would this censorship be beneficial to their cause? We strongly suspect that yes. If the amount of true fake pharma would be substantial, you can bet your fiat money that Governments and Big Pharma would exploit this information until the end of time. Big Pharma is big on PR and have the money to back it up. Politicians are big on PR when is a "just" cause. Yet, there is very little if any statistical, reliable information about this phenomenon. Why? What would compel Governments and Big Pharma to shut up? Simple. Dismally low numbers. If the real numbers are ridiculously small (as we suspect) that would legitimate counterfeit pharma as a viable solution. But this would affect Big Pharma's bottom line and votes during election. Not a convenient scenario. And so instead of providing objective statistics so that the real threat could be evaluated, we get the opposite; silence and gross exploitation of individual horror stories. Hummm…. how convenient, n'est-ce pas?

And there you have it. Governemnt action through obscurity. You are not allowed to know the objective truth about counterfeit pharma. All you are allowed to know are incidental horror stories and the methods to protect pharmaceutical profits wrapped in fuzzy explanations and ghostly ethics propped by "law and order" muscle.

In a Libertarian system any person manufacturing fake pharma would become liable to the full extent of the damage. Furthermore, as countries would not exist there would be no paperwork issues. Recovery agencies would simply track down the culprits mercilessly regardless of where in the world they would be located. This exorbitant amount of owed money would act as the best deterrent against fake pharma. Why risk losing everything if honest manufacturing processes would allow you to make a good living?


Then we have the issue of how profitable counterfeit pharma can be. A Pfizer official stated that criminals realized what a "treasure trove counterfeits represent in terms of profits; its ungodly". Humm… considering that the revenue Pfizer is making with only one drug (Viagra - 1.6 billion USD/year) it is difficult to figure out what "ungodly" means. Of course, this person also threw in a 200 billion dollars a year as a counterfeit market value, but if one considers that the global market is worth about 1.1 trillion dollars, this number is not that large (18%). Besides, such a large number is highly suspect coming from a person hired to eliminate counterfeits working for one of the largest Big Pharma companies.

The truth is this. Is counterfeit pharma profitable? Undoubtedly. Is it very profitable? Absolutely. Does it matter? Not at all. Why not? Because at the end of the day counterfeit pharma is doing what politicians and pharmaceutical companies have been saying in their PR marathons that they will do and it never happens; the socialization of medicine prices (as expressed in politically correct terms). For you and me this means low, low prices.

Look, it's not difficult to understand. Counterfeit pharma provides medications to many people at prices their can afford. Governments don't want to do this because they are protecting Pharma. Pharma companies don't want to do this because they are protecting their profits. The only ones willing to do this are counterfeiters and so they do. Do they collect large profits? Sure! But who cares! Look, if you are a person dying in the outskirts of Bangladesh because you cannot afford a Brand Name antibiotic, do you actually care what is the profit level of a counterfeiter if they can provide you with a fully active copy for a price you can afford? Of course not!

Not totally fake

One of the most interesting statements of a Pakistani counterfeiter is that their product is not "totally fake" and that it works 50% of the time. Of course, this person is a barely literate worker who probably does not have an accurate idea of his statement. This statement is later corrected by his boss the "chemist" who states that given the ingredients he can produce anything. However, let's take it at face value. Let's say that a counterfeit medication works only 50% of the time.

Did you know that pharmaceutical companies routinely "donate" expired medications to third-world countries so that they may write them off from taxes? Did you know that active ingredients in medication do not cease to have effects on the expiration date? What an expiration date is, is simply the date by which the amount of active is guaranteed to be over a certain limit. Medications are like timers counting backwards from 100. For example, at expiration date a medication may reach 90 which means that the medication is still 90% effective. Yet, we throw that medication away. Why? Because we have been taught to do so. Yet, other people in poor countries continue to use that medication for a very long time. All they do is increase the dosage. It works! And so the concept that a given medication only works 50% of the time is not something alien but simple routine in those regions. Although and to be honest, we have reasons to believe that that number (50%) is quite a low estimate. If counterfeiters are using the correct ingredients (and most do) there is no reason for the efficacy to be in the order of 90% or higher. Molecules don't simply disappear overnight. This suspicion seems to be correct because we are not seeing an epidemic of people dying throughout the world for consuming counterfeit pharma. If the counterfeit pharma is indeed worth 200 billion a year, we should be seeing massive problems, yet we are not. The only problems we are seeing are the decreasing profits from Pharma.


We hope we have shown that the so-called fake pharma is not the problem but the solution to problem of market management by politicians. What counterfeit pharma really is, is simply the free market trying to reassert itself for the benefit of all. And yes, there are risks with counterfeit pharma but those risks greatly outweigh their benefits. At the end of the day we need to remember that everything we do is risky and that includes taking medications.

We don't need more regulations and more enforcement, which brought us here to this situation. What we need is market freedom and lack of interference. However, as politicians cannot have jobs whose job description reads "Do Nothing", asking them to step aside is a non-starter. Politicians won't step aside, but we can. We can step aside and ignore them. We have the power to change our situation, not them. We have to evolve, not them.

No one is safe

This episode concludes with an ominous warning: no one is safe. And for once we agree! No one is safe from the shenanigans that governments and Phrama are playing. No one is safe from the efforts to keep profits as high as possible. No one is safe from the lack of affordable medication that governments and Pharma are still to deliver any time soon… real soon now… No one is safe from the manipulation of public opinions and nobody is safe from governments manipulating free markets. Indeed, no one is safe!

Unless you like regulations. Unless you believe in enforcement. Unless you agree that about 20% of world population lacking access to essential medications is OK. If this is so, then you are lucky indeed since you will have more of the same for the foreseeable future until the entire system disintegrates. We sincerely hope you enjoy the ride. Just one thing, when you are older and cannot afford life-saving medications, don't come begging to us. We told you so. Repeatedly. In advance.

Note: please see the Glossary if you are unfamiliar with certain words.

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