Increasingly sophisticated counterfeit-drug networks make headway in Uganda.

Uganda has a serious problem of falsified and substandard pharmaceuticals. The growing sophistication of the networks manufacturing and disseminating such drugs is leaving authorities struggling to keep up, hampered by limited resources and capacity as well as widespread corruption.

According to reports from representatives of Uganda’s National Drug Authority (NDA) – which regulates human and animal medicines and is therefore at the front line of the fight against counterfeit drugs – around 10% of the country’s medicines are estimated to be falsified.¹ This is in line with World Health Organization (WHO) estimates that on average 1 in 10 medical products in developing countries is substandard or falsified.² However, the Anti-Counterfeit Network, a civil-society organization working in Uganda and Kenya, has estimated that the true figure is closer to 50%.³ This is consistent with estimates by Uganda’s National Bureau of Statistics that about 54% of goods (including pharmaceuticals) sold commercially in Uganda are counterfeit, making pharmaceuticals just one element of a larger problem.⁴ These variations raise doubts about the extent to which national and international stakeholders understand the issue.

The impacts of counterfeit medicines are enormous, particularly in sub-Saharan Africa. The WHO has reported that the region accounts for 42% of worldwide cases of counterfeit drugs,⁵ and according to modelling from the London School of Hygiene and Tropical Medicine, this leads to around 116 000 preventable deaths per year from malaria alone.⁶ Antimalarials, along with painkillers and contraceptives, are among the most common counterfeit medicines in Uganda.⁷

Terminology relating to this issue is contested. Some governments (including India’s) and civil-society groups (such as Doctors without Borders) have argued that the term ‘counterfeit’ – rather than the World Health Assembly-adopted ‘substandard and falsified’– is politically loaded, as it refers more specifically to infringement of pharmaceutical corporations’ intellectual property rights – rights that are often enforced to keep medicine prices high at the expense of patients in developing countries.⁸ However, the term ‘counterfeit’ is widely used by Ugandan institutions and civil society to refer to falsified and substandard medicines of all kinds – in particular by the NGO the Anti-Counterfeit Network. Therefore, while the political concerns around the term ‘counterfeit’ are valid, we use the term here in line with the terminology used by organizations working in Uganda.

Current response

The NDA launched a spate of operations aimed at unlicensed drug vendors in the latter half of 2019,⁹ resulting in the closure of 1 526 pharmaceutical outlets and the seizure of pharmaceutical goods worth approx­imately 2 billion Ugandan shillings (US$550 000) since July (see Figure 7).¹⁰ However, while spot checks of drugs outlets, closures and confiscations create an image of action on the part of the NDA, they do not necessarily indicate success. Very few arrests have been made in connection to illicit supplies, and no successful prosecutions have been reported.¹¹ While outlets found to be selling counterfeit goods are issued closure notices, it is unclear what follow-up action is taken or what happens to the vendors themselves.

Many vendors in the counterfeit drugs market also may be unaware of the source of their medicines. Even when they are complicit, they are typically low-level operators, lacking significant knowledge of the operations of the networks that manufacture and transport the counterfeits into Uganda, limiting the impact of any arrest.

Figure 7 Outcomes of seven operations reported by the Ugandan National Drug Authority (NDA), May–November 2019

NOTE: These are the results of individual operations and therefore do not reflect the totals cited in the text for the aggregate number of inspections, closures and seizures conducted by the NDA. US dollar estimates of the value of products seized are based on NDA estimates reported in Ugandan shillings.
SOURCES: Stories posted on the Uganda National Drug Authority website, 7 June–29 November 2019; see www.nda.or.ug.

The Ugandan government has also strengthened its anti-counterfeit fight by establishing the Anti-Counterfeit Goods Act in 2017. However, critics have argued that the law does not define counterfeiting clearly enough and is not effectively enforced.

President Yoweri Museveni endorsed the use of blockchain technology to improve transparency in pharmaceutical supply chains following a meeting with the CEO of MediConnect, a start-up that develops blockchain technology to track prescription medicines, in July 2019.¹² However, as the lack of technical knowledge and equipment currently are major challenges facing anti-counterfeiting authorities such as the NDA, border force and Uganda’s National Bureau of Standards (UNBS), this kind of high-technology approach may prove difficult to implement.

The NDA and the Ugandan Ministry of Health, in partnership with global agencies such as Interpol, have been instrumental in establishing a better understanding of the counterfeit drugs problem, but they are hindered by a lack of technical capacity to develop credible data and by the protection of illicit players by corrupt actors in government and, to a lesser extent, the private sector. This has hampered attempts to map out the structure of the market, identify key stakeholders, understand the scale of the problem, and pinpoint any regulatory weaknesses that facilitate the growth of this illicit market.

Criminal networks supplying counterfeit medicines to Uganda

Law-enforcement officials, civil-society organizations, pharmacists and doctors interviewed for the Risk Bulletin held a general view that counterfeit medicine has flooded the Ugandan market.¹³ The drugs are produced primarily in India, followed by China and Thailand. They are often marketed in Uganda as products of Europe or India, trusted points of origin for pharmaceuticals. Although some packaging is apparently done in the country of manufacture, the bulk is believed to be done in China, even for drugs manufactured in Thailand or India.¹⁴ This is due to the speed at which counterfeit packaging is reportedly manufactured and shipped from China – when genuine pharmaceutical companies have changed branding design to differentiate their products from counterfeits, the illicit market has reacted extremely quickly to copy the new design.

There is also a problem of ‘para-importation’, whereby genuine drugs destined for different regions of the world, and therefore tailored to the diseases relevant to these regions, are shipped to Uganda and then misused. In addition, drugs imported from the EU then have their expiry date changed; this can mean that by the time they are purchased they have expired and are ineffective. Networks manufacturing counterfeits and transporting them into Uganda infiltrate the distribution systems of major pharmaceutical chains, exploiting these to disseminate counterfeits across the country.

The apparent prominence of India as a source of counterfeit drugs reflects the fact that Indian suppliers dominate imports of genuine pharmaceuticals and medical equipment to Uganda. According to the United Nations COMTRADE data for 2018, Uganda imported US$281 million of pharmaceutical products, US$161 million of which came from India.¹⁵ The reliance on imports rather than domestic production is a continent-wide phenomenon. Analysis from the consulting firm McKinsey in 2019 found that Africa as a whole imports between 70% and 90% of its medicines, and the continent has 375 medicine-producing companies for a population of 1.3 billion people, in contrast to 5 000 and 10 500 producers in China and India, respectively, both of which have populations of roughly 1.4 billion.¹⁶

In April 2019, a report from the US Trade Represent­ative accused India of being a major supplier of counterfeit pharmaceuticals, estimating that up to 20% of drugs sold on the Indian market are counterfeit and a threat to patient safety.¹⁷ Academic papers analyzing Indian-produced medication, including antimalarial drugs, raised concerns about high levels of counterfeit products as far back as 2012,¹⁸ at which point the downstream risk to East African countries reliant on Indian imports was already highlighted.¹⁹

Interviews conducted for the Risk Bulletin suggest that Indian criminal suppliers are heavily involved with, if not totally in control of, fake drugs exported to Uganda, and collude with immigration, health and regulatory officials.²⁰ The market is reportedly moving further underground and growing in sophistication, with the Anti-Counterfeit Network tracking a shift in the last two years in the quality of counterfeit packaging, making it increasingly difficult to distinguish from genuine products.²¹

Widespread corruption across government bodies associated with the import, dissemination and quality review of pharmaceuticals enables the illicit industry to flourish. Government officials working in regulatory bodies such as border control and the national standards authorities are seen as closely involved with the trade. ‘Illicit trade in counterfeit drugs in Uganda is a very organized structure,’ remarked one local expert working on countering counterfeits.²² Once the drugs clear the border, they are transported to pharmacy out­lets in Kampala, where drug inspections are evaded by paying off inspection officials.

Whenever any raids on businesses or other entities believed to be active in counterfeit pharmaceuticals are planned, intelligence shared with law-enforcement agencies by civil-society organizations is consistently leaked. Raids repeatedly find recently abandoned premises, or businesses devoid of counterfeits, despite strong intelligence regarding their involvement. This suggests widespread corruption among law enforcement. Considerable political and financial influence is required to sway officials in multiple regulatory bodies – such as the UNBS and the Uganda Revenue Authority, suggesting that powerful government officials could be involved in the counterfeit pharmaceutical trade.

The counterfeit-drug trade adapts to seasonal demand. ‘If an immunization is being rolled out, there are more counterfeits there. Or a season for a particular illness will mean more counterfeits,’ explained one Anti-Counterfeit Network representative.²³ Counterfeiters do not engage in production of drugs that take a long time to sell: ‘They have the calendar, they know demand and what is going on.’ This enables networks to focus on fast-moving products. Malaria and cancer drugs are currently produced the most. During a recent Hepatitis B virus outbreak, drug counterfeiters increasingly offered Hepatitis B vaccines.²⁴ This is believed to have been made possible with the help of officials within the NDA.

The counterfeit-medicines trade in Uganda involves sophisticated networks that counterfeit genuine brands and exploit corrupt connections to avoid oversight. The relevant authorities, hampered by a lack of technical know­­­­ledge and resources, and undermined by widespread corruption, rely predominantly on inspections of outlets and confiscated stocks for their understanding of the illegal trade. This provides limited insight into the higher-level actors supplying this trade and the corruption that facilitates it. In the task of investigating an illicit drug supply with complex global supply chains and political protection, the Ugandan government faces an uphill task.

Notes