Will there be a black market in Covid vaccines?
2 December 2020
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Healthcare
1 December 2020
Government and Institutions
3 December 2020
Tax and Fiscal Policy
19 November 2024
When President Trump promoted the malaria drug hydroxychloroquine as a possible preventative treatment for COVID-19 in the spring, demand for the product jumped around the world. Similarly, when British doctors showed that the steroid dexamethasone could help combatting the disease, demand for it also spiked. But ongoing research shows that many of the medicines sold were not as claimed.
For years, the drugs industry has warned not to buy medicines from unlicensed sources online, and often this advice has been self-serving, since industry wants to prevent arbitrage from cheaper markets to more expensive ones. But there are undoubtedly bad actors on the web, and they know what to sell. Viagra is probably one of the most faked medicines online because many men want to buy it discretely, and will hence buy from sources not demanding prescriptions. They also may not inform authorities if the medicine fails to perform as expected.
In two pieces of peer-reviewed research, I demonstrated that a small amount (about 8%) of the Viagra bought over the web was bogus. “Bogus” can mean ineffective without harm but obviously not working as expected. But some contained heavy metal contaminants which, in the worst case, could kill. Of the four other popular medicines assessed with a handheld spectrometer (Lipitor, Zoloft, Celebrex, and Nexium) none of the products procured was fake or substandard. I followed this up recently to look at the quality of hydroxychloroquine and dexamethasone available for sale from international web sites based in Canada, Germany, India, Austria, Turkey and several other markets.
I procured samples from over forty web sites with more to come[1]. The findings so far are worrying. 16% of the dexamethasone and 18% of the hydroxychloroquine failed spectrometer testing. Most of these products were probably fake made by illegal enterprises rather than substandard production of legitimate manufacturers. Most of the fake products appear to have been made in China and Russia, although for nearly half of the products it is impossible to identify location of production. Regardless of where the fakes are made, they could prove injurious to health. The number of fakes is far higher than even with Viagra and suggests that there will be a problem when other cures and vaccines are available.
In normal times, you might argue this is just a case of “buyer beware”. But these are not normal times. The UK Government alongside many others has not covered itself in glory in its handling of the pandemic and allocation of new medicines and vaccines will not run smoothly. Some people may not want to take the new and apparently successful Oxford University-Astra Zeneca COVID vaccine. Others will be prepared to pay (perhaps under the table) to get it immediately. There will be shortages, there will be theft and diversion and there will be faking of this and other products.
As I found in this ongoing work, at least a dozen web sites which are linked to legitimate brick and mortar pharmacies in their respective countries say they sell hydroxychloroquine and dexamethasone but were unable to supply due to shortages. No doubt some patients may have been desperate enough to procure from unofficial channels and others may be desperate, or at least highly motivated, to get hold of other possible cures.
This is not an easy public policy problem to address. Obviously buying from legitimate sources is sensible, but it is possible to identify safe, cheaper sources of products from overseas. For example, in the US, where drug prices are the highest in the world, a group called pharmacychecker.com certifies specific foreign pharmacies as safe by undertaking the due diligence individuals have neither the time nor competence to do. Projects like this are a market-based solution to the issue of information asymmetry, which could otherwise result in market failure. They have proved a lifeline to thousands of drug consumers.
In addition, governments should also think about creating the right framework under which a legitimate market for Covid vaccines can develop. In the main, the rolling out of the vaccine will not be led by a market process. In the UK, it will be done via the NHS, and the vaccine will be allocated according to politically determined criteria rather than willingness to pay. And that is fair enough – but there is a case for creating a parallel “fast-lane” for the most impatient people, who might otherwise be driven to less trustworthy sources.
Dr Roger Bate is a member of the IEA’s Academic Advisory Council.
—
[1] The research was funded by the American Enterprise Institute in the US and by Dinesh Thakur in the UK and the US. Mr Thakur received a multimillion-dollar whistleblower award from US Food and Drug Administration in 2013 for exposing the fraud and dangerous drug production at the Indian drug company Ranbaxy, which was guilty of seven felonies and paid $500m to US Government. Mr Thakur has since supported efforts to improve drug quality.
For years, the drugs industry has warned not to buy medicines from unlicensed sources online, and often this advice has been self-serving, since industry wants to prevent arbitrage from cheaper markets to more expensive ones. But there are undoubtedly bad actors on the web, and they know what to sell. Viagra is probably one of the most faked medicines online because many men want to buy it discretely, and will hence buy from sources not demanding prescriptions. They also may not inform authorities if the medicine fails to perform as expected.
In two pieces of peer-reviewed research, I demonstrated that a small amount (about 8%) of the Viagra bought over the web was bogus. “Bogus” can mean ineffective without harm but obviously not working as expected. But some contained heavy metal contaminants which, in the worst case, could kill. Of the four other popular medicines assessed with a handheld spectrometer (Lipitor, Zoloft, Celebrex, and Nexium) none of the products procured was fake or substandard. I followed this up recently to look at the quality of hydroxychloroquine and dexamethasone available for sale from international web sites based in Canada, Germany, India, Austria, Turkey and several other markets.
I procured samples from over forty web sites with more to come[1]. The findings so far are worrying. 16% of the dexamethasone and 18% of the hydroxychloroquine failed spectrometer testing. Most of these products were probably fake made by illegal enterprises rather than substandard production of legitimate manufacturers. Most of the fake products appear to have been made in China and Russia, although for nearly half of the products it is impossible to identify location of production. Regardless of where the fakes are made, they could prove injurious to health. The number of fakes is far higher than even with Viagra and suggests that there will be a problem when other cures and vaccines are available.
In normal times, you might argue this is just a case of “buyer beware”. But these are not normal times. The UK Government alongside many others has not covered itself in glory in its handling of the pandemic and allocation of new medicines and vaccines will not run smoothly. Some people may not want to take the new and apparently successful Oxford University-Astra Zeneca COVID vaccine. Others will be prepared to pay (perhaps under the table) to get it immediately. There will be shortages, there will be theft and diversion and there will be faking of this and other products.
As I found in this ongoing work, at least a dozen web sites which are linked to legitimate brick and mortar pharmacies in their respective countries say they sell hydroxychloroquine and dexamethasone but were unable to supply due to shortages. No doubt some patients may have been desperate enough to procure from unofficial channels and others may be desperate, or at least highly motivated, to get hold of other possible cures.
This is not an easy public policy problem to address. Obviously buying from legitimate sources is sensible, but it is possible to identify safe, cheaper sources of products from overseas. For example, in the US, where drug prices are the highest in the world, a group called pharmacychecker.com certifies specific foreign pharmacies as safe by undertaking the due diligence individuals have neither the time nor competence to do. Projects like this are a market-based solution to the issue of information asymmetry, which could otherwise result in market failure. They have proved a lifeline to thousands of drug consumers.
In addition, governments should also think about creating the right framework under which a legitimate market for Covid vaccines can develop. In the main, the rolling out of the vaccine will not be led by a market process. In the UK, it will be done via the NHS, and the vaccine will be allocated according to politically determined criteria rather than willingness to pay. And that is fair enough – but there is a case for creating a parallel “fast-lane” for the most impatient people, who might otherwise be driven to less trustworthy sources.
Dr Roger Bate is a member of the IEA’s Academic Advisory Council.
—
[1] The research was funded by the American Enterprise Institute in the US and by Dinesh Thakur in the UK and the US. Mr Thakur received a multimillion-dollar whistleblower award from US Food and Drug Administration in 2013 for exposing the fraud and dangerous drug production at the Indian drug company Ranbaxy, which was guilty of seven felonies and paid $500m to US Government. Mr Thakur has since supported efforts to improve drug quality.
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