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European pharmaceutical sector loses €10.2 billion every year to fake medicine

03 Oct 2016, 12:16 pm

The EU pharmaceutical sector loses €10.2 billion a year, or 4.4% of sales, to counterfeit medicine the European Union Intellectual Property Office (EUIPO) has said.

These lost sales translate to around 37,700 jobs lost across the sector, with a further 53,200 lost due to the knock-on effect on other sectors, the EUIPO said.

Government revenue worth an estimated €1.7 billion is lost in the form of corporate tax, household income tax and social security contributions due to the fake goods, it said.

In the UK, the report estimates that €605 million, or 3.3% of the UK pharmaceutical sector’s sales is lost annually as a result of counterfeiting, with 2,940 direct jobs lost. In Germany the estimates say that over €1 billion, or 2.9% of sales are lost, and 6,951 direct jobs, while in France the figures are €1 billion, or 3% of sales, and 3,667 jobs.

EUIPO director, António Campinos said: "We know through analysis done by the World Health Organisation (WHO) that both generic and innovator medicines are falsified, from cancer treatment products to inexpensive pain treatments. These fakes can be toxic and pose a serious danger to health. Our report shows that they also have a serious impact on the economy and on jobs. Our aim is that our data and evidence-based studies will help policymakers as they devise responses to the challenge of combatting fake pharmaceuticals."

Earlier this week EU customs authorities reported that they had seized five million more counterfeit items in 2015 than in the previous year, an increase of 14%.

More than 40 million products suspected of violating intellectual property rights were detained at the EU's external borders in 2015. The goods are estimated to be worth nearly £650 million, the European Commission said.

However, intellectual property law expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said at the time that these figures underestimate the true level of the crime: "Counterfeiting remains a massive problem and no one knows the true scale of it. Given the size of the EU economy and the many channels to the EU single market, I suggest the value is at least 10, if not 100, times bigger than the reported figure."