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Pirate Nation

Pirate Nation

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Published by: Okelay on Feb 17, 2013
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Patent rights typically cause the price of pharmaceuticals to triple.

- Deng et al. (1996)

And there’s winners and there’s losers / But they ain’t no big deal
‘Cause the simple man baby pays for the thrills, the bills / The pills that kill

- John Cougar Mellencamp, ‘Little Pink Houses’

136Digital Piracy in Asia

Today, any attacks on counterfeiting lead quickly to pirate pharmaceuticals.

Bootleg shoes may fall apart, but pirate drugs can kill, the media say. Literature on
fakes (mainstream as well as respected journals) is almost exclusively negative.

Television coverage often features port authorities, undercover buyers and big
pharma representatives talking of consumer harm and governments unable to plug
the leaks. Naturally, such coverage turns immediately to bogus consumables. Products
people rely on to make them healthy and to stave off disease.
However, even counterfeit drugs’ dangers need more thorough investigation
than buying into branded drug companies simply declaring that pirate pills can kill.

Bottled water from the purest Artesian wells can kill. Dolphins can kill. The important

question is how they kill. While media coverage often focuses on pills containing boric
acid or trace particles of other dangerous chemicals, what fake pills do not contain
begets the greatest harm.

Poorer nations remain rife with malaria, tuberculosis and AIDS. When fake pills

contain no or (worse) only trace active ingredients, the sickness claims a far higher
death toll, with ‘rough, yet conservative estimates’ of up to 700,000 deaths worldwide

each year (Harris et al., 2009: 23). Countries react with tighter inspections or more
investigations into counterfeiting rings. Both are symptoms of the same disease,
however: a lack of affordable pills from reliable sources. So the victims die from
inaction, not action, since the overwhelming majority of those deaths – all but a
handful – are due to ineffective drugs, not poisonous drugs.
The consequences of demonizing the counterfeit drug trade remain minimal: who
would argue for those profiting from selling ineffective drugs to the sick poor? The

real potential harm, however, is tying reverse-engineered or hacked drugs in with
all other counterfeits. Few sources differentiate between fake pills and pirated pills.

So when the mainstream media, medical journals and government authorities all

condemn counterfeit pills in unison, the din is hard to ignore.

Big pharma often remains mute about both the extent of fakes and any benefit of
reverse-engineered drugs. Both dilute their premium pill market: the former through
causing consumer wariness, where ‘they’re [big pharma] often the first people to

identify fakes, but there’s a disincentive for them to declare that because it destroys

their market’ (Marshall, 2009) and the latter through generic drugs, which ignore

patents in order to offer cheap versions of premium drugs.

137Digital Piracy in Asia

Pfizer in particular paints itself into the patent corner; much of their research and

development focuses on patentable or currently patented drugs, with little regard for
drugs no longer protected. Yet these are the drugs that developing nations desperately
need. If big pharma shows no interest, however, this leaves a powerful vacuum for
either fakes or reverse-engineered drugs. The former are deadly through inertness,
but the latter often give hope where little exists.
Mainstream media has no qualms about adopting an inclusive viewpoint
that lumps fake pills with pirate pills. When CNBC’s show Crime Inc. began their
programme entitled ‘Counterfeit Goods’ with the line: ‘This criminal underworld

puts our economy and our lives in peril’ (Todis, 2010), no one expected to hear about
the lives reverse-engineered drugs have saved. The programme has John Clark, Vice

President and CSO of Pfizer, talking about how bootleggers care only about money,

and not the safety of the drugs. How they ‘have no regard for the health and safety

of the end customer. They’re just looking for the money’. This seems somewhat

duplicitous given big pharma’s own death toll because of abuse, medication errors
and side effects, but it certainly edges out any arguments for pirate pills that help

people. How ‘In India, Brazil, Argentina, Thailand, Egypt, and China, private and state-

run enterprises are ignoring international patent laws written in the interests of

profit, churning out generic versions of vital drugs at a fraction of the cost, saving and
improving millions of lives as a result’ (Mason, 2008: 63).
In the same vein, Ghana’s non-profit pharmaceutical advocacy group mPedigree

produced counterfeit drug documentary If Symptoms Persist. It calls fake pill makers
‘merchants of death’ and ‘criminal masterminds’ who are ‘not the type to repent

of their foul deeds’ (If Symptoms Persist, 2008). Again, the programme makes no

mention of illegal generic pills.

Generic drugs in India provide a fine example of how a too-inclusive view of
pill piracy can cause harm. In 1970, then-Prime Minister Indira Ghandi dropped

patent coverage on ‘products’ and left ‘process’ coverage to stimulate an economy
too dependent on foreign chemicals for farming and medicine. The result was a
boom in reverse-engineering and generic drug sales, as well as cheaper pesticides.
This remained in effect until India reinstituted pharmaceutical patents in 2005 as

a provision of the Trade-Related Aspects of Intellectual Property Rights (TRIPS)
agreement. During that time, India made between 70–80 per cent of the ingredients

138Digital Piracy in Asia

in US generic drugs and around 60 per cent of those for brand-name drugs (McNeil,

2000). So, while the USA and other developed nations benefited from cheap skilled

labour, India reverse-engineered all drugs, patent protected or not, for widespread
generic sales in-country.
Obviously, big pharma disliked India reverse-engineering their patented pills

and selling them at marginal prices. But the reason more than 20,000 drug makers

sprouted in India was that making generic drugs of patented pills still obeyed Indian

law. And while the industry claimed losses of $100 million a year, when the average

outlay for healthcare per Indian rang in at about $10 a year, it is easy to see why
knock-offs did well (McNeil, 2000). ‘India’s drug prices were among the highest in the

world,’ wrote Donald McNeil Jr in 2000. ‘Now they are among the lowest. Access to
drugs is one reason that average life expectancy has risen to 64 today, just as cheap

pesticides based on foreign formulas are part of the reason India now feeds itself.’
This does not sound like the ‘merchants of death’ who ‘have no regard for the

health and safety of the end customer’. But some still see reverse-engineering as

simple piracy, a view expressed in an article by the conservative, corporate-funded

American Enterprise Institute. They free big pharma from any shortfalls in needed

medicine and instead claim ‘rather, Indian patent law is what constricts India’s drug

market’ (Bate, 2007). Indeed, tighter patent coverage and pulling back the reins on

generic, reverse-engineered medicine might stimulate research and development in
India by foreign markets. What this new coverage will mean for effective drugs getting

to poor people remains unknown. But big pharma cannot spend billions on research

and still sell drugs as cheaply as pill pirates while pleasing their investors.

As long as the media portray large pharmaceutical companies as the victims of pill

piracy, however, rhetoric about the evils of reverse engineering and generic drugs will

prove successful. But realistically, either big pharma makes lots of money or it loses

lots of money; the two are mutually exclusive. They cannot treat unrealized income

from poorer countries as losses to piracy. And yet, is it moral or ethical to withhold

from these countries not only the data necessary to reproduce lifesaving drugs,
but also the ability to reverse engineer these drugs? It is one thing to refuse to give
something away, even if this means that many people will lose their lives. It is another
to manoeuvre prospering IP policies toward greater controls in nations that reverse
engineer or pirate drugs that help citizens, especially when such an impoverished

139Digital Piracy in Asia

market would not benefit rights-holders to begin with. As McNeil writes: ‘It is only

when the newest molecules, often made in the same factories, are sold in countries

where a patent has not yet expired, that a “generic manufacturer” becomes a “pirate
counterfeiter”’ (McNeil, 2000).

Importantly, one cannot compare big pharma’s good works with doing nothing
at all. That will always make them appear heroic, kind and concerned only for the
welfare of the less fortunate. Instead, we must compare what they are doing with

what they could do. Not while going bankrupt, surrendering their IP or firing all
their employees, but while still preserving an effective, profitable business. As Indian
Minister of Health Dr Javid A. Chowdhury said: ‘If they can offer an 80 per cent

discount, there was something wrong with the price they started off with’ (McNeil,

The result of universal negative action against all pill piracy continues the game
of information keep-away. While no one wants ineffectual drugs mixed with lifesaving
antibiotics, the recourse becomes big pharma’s excuse for falling back on and trying
to extend patent coverage. The brand becomes the safety against fake drugs, so the
brand receives vast and growing protections, no matter what the costs. What bolsters
brand enforcement for the sake of excising ineffectual counterfeits, companies can
then use to combat reverse engineering.
People must understand the difference between pirate pills with no or bad
ingredients, and those that are reverse engineered and simply ignore patents.
The former can be a problem, the latter’s only ‘evil’ is in depriving corporations

of potential profit. If that is a result of saving lives, then few indeed would lump
such efforts in with piracy. That so many echelons of journalism and scholarship

display a universal opposition and negative regard for pill piracy reveals that even
the terms have grown too collective. Such stories typically leave out any caveats to
including reverse engineering in with drug counterfeiting or pill piracy driven only

by profit motive. When coverage of bogus drugs seeps with claims that pill profits

fund organized crime and terrorism, one can only infer that failing to separate

counterfeiting for profit from reverse engineering is by design; that the agenda of
media coverage of this problem is to present no separation between brand hijacking,

counterfeiting, reverse engineering and the basest crimes imaginable.

140Digital Piracy in Asia

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