Detecting counterfeit pharmaceutical drugs

Dominic Peltier-Rivest and Carl Pacini

Journal of Financial Crime, 2019, vol. 26, issue 4, 1027-1047

Abstract: Purpose - This paper aims to analyze drug counterfeiting, explains its risk factors and operating and legal environments reviews recent legal cases and develops a multi-stakeholder prevention strategy that includes forensic accounting methods. Design/methodology/approach - This is a theoretical study based on legal case studies and the best forensic accounting strategies. Findings - Pharmaceutical drug counterfeiting is a fast-growing fraud that so far has attracted little attention from forensic accountants. A recent estimate projects that criminals collect around $75bn annually in illicit sales from counterfeit drugs (Bairu, 2015). Pharmaceutical counterfeiting also leads to the loss of lives when criminals use lethal chemicals in the manufacturing of fake medicines (Liang, 2006a;Brown, 2005). Because the detection of drug counterfeiting is extremely difficult after fake medicines have been ingested by patients, the strategy developed in this paper is based on early discovery by using reliable tracking technologies and inventory management controls in the supply chain, conducting effective regulatory and legitimate customs inspections, and increasing consumer awareness of basic forensic accounting tools. Research limitations/implications - This paper extends previous research by integrating various factors into a single multi-stakeholder prevention framework. Practical implications - The paper presents a synthesized, comprehensive view of the drug fraud epidemic and analyzes concrete steps that can be taken to protect the pharmaceutical supply chain to reduce the loss of lives and monetary injuries. Originality/value - No previous research has analyzed this issue from a multi-stakeholder point of view and used forensic accounting tools to complement a prevention strategy. The drug counterfeiting prevention strategy developed in this paper addresses the supply side, the regulatory enforcement side and the demand side.

Keywords: Fake medicine; Drug fraud; Drug counterfeiting; Tracking technology; Customs border; Forensic accounting (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-06-2018-0057

DOI: 10.1108/JFC-06-2018-0057

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