China: Update on Drug Counterfeiting

Although China is making efforts to improve piracy and counterfeit drug enforcement mechanisms, pharmaceutical companies must still be extremely careful in the Chinese market. In fact, currently several large US pharmaceutical companies are facing significant challenges dealing with counterfeit drugs in China. The China State Intellectual Property Office (SIPO) has used a lot of anti-piracy rhetoric to convince foreign drug companies that it will crack down on drug counterfeiters; however, the reality has been quite different. Although SIPO conducted several publicized raids on counterfeit drug makers in the fall of 2005, fake drugs are still a rampant problem in China.

In fact, several large pharmaceutical companies are currently dealing with counterfeit drug problems in China. Pfizer has stated that a large percentage of their drug Viagra sold in China is counterfeit. In response to the rampant drug counterfeit problem and the ineffective enforcement of counterfeiters in China, many foreign pharmaceutical companies have invested in their own resources to combat the problem. Companies like Pfizer have installed entire counterfeit legal departments in charge of issuing complaints to the Chinese government and bringing any counterfeit issues to Chinese court. Many multinational drug companies have seen more success in combating counterfeiters with these new internal departments.

In the past, drug counterfeiters developed poor quality fakes, but today drug counterfeiters in China are producing high quality drugs. With the new sophistication of drug piracy in China, foreign drug companies must remain focused and determined in order to combat the problem.