Counterfeit Drugs pass through free trade zones

The International Herald Tribune reports on the shipping route that counterfeit drugs pass through before ending up in consumers hands.

Three months ago, when the authorities announced that they had seized a large cache of counterfeit drugs from Euro Gulf’s warehouse deep inside a sprawling free trade zone here, they gave no hint of the raid’s global significance.

But an examination of the case reveals its link to a complex supply chain of fake drugs that ran from China through Hong Kong, the United Arab Emirates, Britain and the Bahamas, ultimately leading to an Internet pharmacy whose American customers believed they were buying medicine from Canada, according to interviews with regulators and drug company investigators in six countries.

The seizure highlights how counterfeit drugs move in a global economy, and why they are so difficult to trace. And it underscores the role played by free trade zones — areas specially designated by a growing number of countries to encourage trade, where tariffs are waived and there is minimal regulatory oversight.

The problem is that counterfeiters use free trade zones to hide — or sanitize — a drug’s provenance, or to make, market or relabel adulterated products, according to anticounterfeiting experts.

Counterfeit Drugs is a $40 Billion market.