Tech by VICE

How Drug Cartels Counterfeit Pills

"These groups operate like terrorist organizations."

by Alexandra Ossola
Sep 19 2014, 5:10pm

Image: Shutterstock

The two people charged by the FBI last week with drug counterfeiting and smuggling weren't part of a well-known cartel. They weren't selling methamphetamine or cocaine. The pair, named Marla Ahlgrimm and Balbir Bhogal, were a pharmacist and a pharmacologist, indicted for "conspiring to supply at least four million misbranded and counterfeit pharmaceuticals" to American customers of a Costa Rica-based pharmaceutical company.

Drugs are considered counterfeit when the product itself is made using illegitimate ingredients, or a drug is passed off as a legitimate when it wasn't produced by a pharmaceutical company, Roger Bate, a visiting scholar at the American Enterprise Institute in Washington, DC, who has published extensively on the topic, told me.

Counterfeit drugs are becoming an increasingly large problem worldwide. True numbers are hard to nail down, but the Centers for Disease Control estimates that 10 to 30 percent of all drugs are counterfeit in developing countries where manufacturing laws are difficult to enforce. In the US this number is reported to be only 1 to 2 percent. These drugs can contain too much, too little, or none of the active ingredient in the medication. For people unlucky enough to take one, the effects can range from nothing (if a drug is just a dud) to an allergic reaction to poisoning and even death.

Bag of seized counterfeit Viagra. Photo: US Customs and Border Protection

The Ahlgrimm and Bhogal case sheds some light into where these drugs are coming from and how they're getting into the hands of American consumers: Per the Bureau:

…From June 2007 through May 2010, Ahlgrimm and Bhogal, who is a dual U.S. and Indian citizen, allegedly arranged for the manufacture in India of millions of tablets of controlled substances, including alprazolam and phentermine, and prescription drugs, including carisoprodol and counterfeit Viagra.

When someone in the US would place an order with the Costa Rican pharmaceutical company, the FBI statement continues, the pair would fill the orders themselves with the smuggled meds and send them to the customers. From production to sale, it was probably a pretty small operation. "It can be like a mom-and-pop operation," Bate said. "But a lot are huge entities."

The operations producing illegal meds can be small, run out of basements and garages in India, or enormous and professional, operating under conditions that are nearly identical to those of the pharmaceutical companies. The small operations certainly outnumber the large professional ones, Bate added, "but if you consider the volume [of medications], of pills that get into the market, the number could be much closer." That's because the big operations have the capacity to make millions of pills per month in some cases, often with low-quality ingredients.

Counterfeit drugs are proliferating for a few different reasons. One is that regulators actually started looking, so they're finding more and more producers, Bate said. But a scarier reason is that the drug cartels previously making cocaine and heroin have switched to legal drugs.

"It's getting worse [in part because of] the war on drugs, meaning narcotics," Bate said. "If you're the Cali Cartel, it makes sense to get into pharmaceuticals," because the penalties for producing legal drugs are much lighter than those for narcotics. Plus, Bate adds, you have a new, larger market of people who will buy your product.

Making the drugs themselves isn't very hard. To get the chemical recipe for Viagra, one of the most widely counterfeited medications, anyone can see the patent that Pfizer initially filed in a document called a monograph, held at the US patent office. The steps for synthesizing the drug are even on Wikipedia. Pharmaceutical companies reveal this information, Bate said, because it guarantees that the government will protect this patent and won't allow any other companies to do exactly the same thing.

Then the manufacturers get their hands on the basic chemical ingredients, which vary in quality from true pharmaceutical grade to cheaper or even falsified versions. For the people mixing these chemicals, "there is the possibility that they will inhale things they shouldn't," Bate said. "If they're using some real [chemicals] and mixing them, it could blow up in their faces—like in Breaking Bad. But it's not very common."

The final mixture is then pressed into a pill, sometimes using real pill-pressing machines purchased easily on the international market, no registration required. But Bate, who has been on raids of counterfeit drug rings in the Middle East, has seen much more rudimentary machinery used for this purpose, including an Austrian printing press from the 1970s.

These groups operate like terrorist cells.

Some ingredients, though, can't be faked, and it's mostly those that affect a pill's appearance. Viagra's distinctive blue color is from titanium dioxide, and anyone who has ever taken Viagra knows this. If the pill's not blue, Bate said, no one would take it. "It's incumbent on counterfeiters to make a pill look right," Bate said.

Once a drug is made and looks legit, counterfeiters must try to get their product into the legal network. Small operations often have someone pretend to be a pharmaceutical wholesaler so he can sell the drugs to a pharmacist, who may or may not be complicit. In countries with old-fashioned reimbursement systems, like Egypt, pharmacists can sell back any drugs they didn't distribute to their supplier, so fakes sold to just one pharmacist can flood the warehouse of the real pharmaceutical company.

Major counterfeiters can't be quite so subtle, so they usually set up their own wholesaling operation, faking the paper trail and bribing regulators. "These groups operate like terrorist cells," Bate said, with the number of complicit individuals involved sometimes around 400 people, sometimes up to several thousand.

To slow the stream of bunk pills, government regulars have become more vigilant, carefully checking a drug's paper trail to check each step of the supply chain. That's much harder when drugs are ordered on the internet, which is why Ahlgrimm and Bhogal conducted their operation for three years without getting caught by the FBI. But Bate would like to see increased punishment for criminal negligence, for those companies that looked the other way and knowingly let counterfeits slip through the cracks.

"Of course, you don't want to sentence someone who just got duped [by counterfeiters], but it means they may not be monitoring the paper trail as well as they should," he said. "For the moment they get away with murder. The real risk isn't for the people making these products, it's for the people taking them."