Counterfeiting is likely and underpins organized crime.

The numerous cases of seizures, alerts and recalls of counterfeit medicines in almost all the regions of the world, corroborate the transnational scope of the phenomenon. This huge market and the level of organisation of the counterfeiting network supports the conclusion that counterfeiting is based on complex and sophisticated structures, often set and maintained by organised criminal groups. Counterfeiting is both a very lucrative and relatively low-risk illegal activity. This leads counterfeiters to act in coordinated ways -- adopting market behaviours, sophisticated methods of production and distribution and enter in the logic of industry and massive production. Counterfeiting is an organised criminal activity to the extent that it is depicted as a complicated network where numerous criminals undertake longlasting activities in order to make economic profits. There is serious evidence establishing links between counterfeiting and other forms of organised criminal activities such as drugs production and trafficking, trafficking in persons, arms trafficking and money laundering. The knot of this link is obviously economic benefit.

Criminal organisations are well aware of the economic profitability of counterfeiting medicines. According to the pharmaceutical company Pfizer (a company directly concerned about drugs’ counterfeiting as it manufactures and licences Viagra, one of the most counterfeited medicines worldwide) the difference in profitability when comparing the production of heroin with that of Viagra is remarkable -- namely, the production of 1 kg of heroin has higher costs and lower street value than the respective costs and profit entailed by the production and distribution of 1 kg of Viagra. In one case investigated by the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom, 100,000 counterfeit pills imported at the price of about 25 pence each were being sold for up to 20 pounds each, thus worth more than 1.6 million pounds in total141.

The reasons behind this strict interconnection between counterfeiting and other forms of organised crime can be briefly summed up in the following assumptions. There is a wide range of means and aims used by medicine counterfeiters that are compatible with other types of criminal activities. For example, medicine counterfeiters can use their installations and equipment to produce drugs and vice versa. What is more, counterfeiting can finance and be financed by other forms of organised crime and this activity can contribute to the increase of the exploitation of illicit and forced labour. Furthermore, illegal distribution and trafficking routes can be used for many purposes, allowing counterfeiters to avoid spending extra money and time in establishing new distribution networks.

Nowadays, organised crime is predominantly responsible for the magnitude of counterfeiting worldwide. As technology and sophistication of know-how are growing and becoming more complex in the globalised environment, organised criminal groups are, in turn, constantly endeavouring to find new ways to exploit these new technologies. They use and expand all possible means of information and communication and transform their modus operandi by taking advantage of all available technologies and opportunities. Hence, the knot among different criminal groups and their various activities is facilitated by the flows of communication, the boom of technology and the minimisation of physical distances. Like political, economic or social actors, organised criminal groups are “players” within the actual context. Structured in small or larger units and based on more or less flexible decisionmaking and operational cores, they constantly try to expand their illegal activities by engaging in old and new forms of crime, from trafficking of human beings, drugs and arms to corruption, money laundering, financial frauds, forgery and counterfeiting.

Investigations and cases worldwide have uncovered serious evidence demonstrating that organised criminal groups have expanded their illicit activities into the field of counterfeit medicines. Counterfeiting of medicines has become a highly profitable crime industry run by transnational criminal organisations, and is costing the international community a lot in terms of economic growth, industrial and commercial turnover, social development, improvement of people’s living conditions and human security, and has become part of the “obscure side of globalisation.”142 Consequently, any efforts to seek realistic solutions to control and reduce the phenomenon of counterfeit medicines would be aimless if the involvement of organised crime is not taken into account.

The constantly narrowing relationship between counterfeiting and organised crime is due to the significant expansion of the latter’s areas of activities. Organised criminal groups have entrenched themselves in so many illicit activities that they can no longer be identified by one type of crime. Apart from that, they have progressively started implementing various types of activities which are often similar to those previously considered as economic crimes143, such as counterfeiting.

The globalisation of markets has also had a strong impact on organised crime. Challenged by this market evolution, organised criminal groups that were traditionally local or regional in terms of geographical location and range of operation have intentionally expanded through the creation of links with other criminal groups in other geographical regions in order to better perform their illegal activities. The process of geographical internationalisation followed by a trend of decentralisation or delocalisation of their decisionmaking and operational cells have given them the opportunity of expanding the activities in which they were traditionally involved while offering them a range of numerous new opportunities through their new links and connections. In order to perform illegal activities such as human trafficking, criminal groups establish alliances with other similar criminal organisations, subdividing operational tasks and creating an actual illegal production/ distribution chain144. Hence, throughout the shipment of a cargo containing counterfeit products, for instance, the connection of the counterfeiters with criminal groups in each stopover of the cargo until its final destination can facilitate the whole transportation by means of intimidation, extortion and bribery and by using the local connections they have established.

By penetrating financial and regular product markets criminal groups have the opportunity to launder proceeds deriving for other crimes committed or income transferred to them for such purpose145. It has been proven that some organised criminal groups such as the Russian mafia, the Chinese triads, the Colombian cocaine traffickers, and the Mexican mafia are involved in counterfeit medicines’ production and trafficking. In his report entitled “Making a Killing”, Roger Bate quotes Francis Burnett of the Caribbean Industrial Research Institute who pointed out that many of those groups switched from narco-trafficking to the counterfeit drug trade due to the potential for high profits, and comparatively low risk (especially where regulations and enforcement are weak and sanctions are clement).146

Being a highly profitable crime and a source of big tax-free income, counterfeiting is nothing but one more “feed-gear” for organised criminal groups to receive more “funds” which can be then invested into other illegal activities. Under the same logic, profits generated by other illicit activities may also be used to feed counterfeiting. It is not rare that criminal activities are intermingled as, for instance, the exploitation of illegal immigrants’ labour for the production of fake products. Cases exist which have established the link between counterfeit medicines and trafficking of drugs due to similar practices adopted during their production and distribution. This can be particularly true for the production phase as the infrastructure and logistics needed for the production of fake medicines are very similar to those used for the production of drugs under the form of pills. By way of example, we can mention a case in Canada, where in 2008 the police seized a massive quantity of narcotics and counterfeit drugs at an illegal pharmaceutical laboratory in Quebec. The seizure, reported to be worth over 5 million USD, contained hundreds of thousands of ecstasy and methamphetamine pills as well as 35 kg of bulk powder which could be used to manufacture another 160,000 ecstasy pills. Furthermore, 25,000 fake Viagra tablets and 31,000 fake Cialis tablets were also seized during the raid147 .