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Distribution of Counterfeit Medicines to Legitimate Pharmacies

Substandard medicines have been widespread on developing nations despite the strengthening security and laws against counterfeiting in these countries. Conflict arises between individuals and organizations on how and why this issue has been continuously prevailing. Its penetration and acceptance in the market have caused alarming number of sickness, complications and deaths in which ordinary citizens are starting to question the authorities. The complaints have been outpouring that World Health Organization, Food and Drug Authorities in each country and other non-profit organizations campaigning on the same cause have been involved.

Reasons have led to one and another. Politics, bribery to the government, the worsening case of poverty and the weak security system have been pointed as factors to its continued existence. One of the reasons which is noted by The Peterson Group, one of the NGOs exclusively working against counterfeited medicines, has caused extra agitation to the government, private pharmaceutical companies and consumers: trade within legitimate pharmacies and counterfeit fraudsters.


Trade in legal commerce has been overlooked with the common perception that legal businesses remain untouchable against counterfeit medicine scams.

United Nations Interregional Crime and Justice Research Institute (UNICRI) has been able to confirm the suspected loophole in private pharmacies’ products. In reviewing the methods used, the term parallel trading came to light.


The practice of parallel trading is legal in the commercial world; however, its application and contribution in the current issue have weighed the issue even further. At this rate, it is near impossible to trace the real culprit as the process involves at least 20 parties.

In a raid in one of the biggest counterfeit drug smuggling in Jakarta, Indonesia last 2013, fraudsters admit to following a cycle but they themselves hardly have any idea as to how the medicines managed to travel and be distributed.


The perpetrators explained that parallel trading involves a drug that is sold in a given country, which after having already moved through the various stages of the ordinary distribution chain, is acquired again by the major distributors and is entered into the parallel distribution chain. The product is then transferred to a new and more lucrative market by means of parallel intermediaries/distributors. The times a pharmaceutical product is transferred can be numerous. It is estimated that, on average, a drug which is entered into the parallel market may be subject to 20-30 intermediary transactions.

This extension of the distribution chain creates a problem of verifiability since some of the intermediaries do not need licensing to operate.


The issue is still under investigation. Our greatest fear is that by the time the real mastermind has been apprehended, it can be too late.

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