The (bad) business model of counterfeit medicine

The (bad) business model of counterfeit medicine

01.25.12 | By Kaelan Hollon

As I've mentioned before, mixed methodologies is an instant triple shot of espresso for me - I love the way humanities can influence the sciences, and the other way around. This article about Freakonomics and the drug supply chain is a new take on what many involved in the pharmaceutical industry know: counterfeiting is a terrifyingly large and unfortunately booming business.

PharmaManufacturing blog makes a great point about the business model behind diversion and counterfeiting, and uses Freakonomics to analyze why fake drugs are a scary problem that just won't go away. It comes down to, per PM author Paul Thomas, reconfiguring the risk/reward model for counterfeiters. If it's consistently more profitable and not terribly risky for people to make fake drugs or divert the supply route of real ones, then counterfeiting will never go away. However, if we increase penalties for counterfeiting, that makes the counterfeiting market considerably less appealing for those who would put so many patients' safety at risk. Thus the scales start to tip back in favor of keeping patients safe from counterfeit drugs.

Any thoughts on other ways Freakonomics might influence pharmaceutical innovation?

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