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Gray Market’s Exploitation of Medicines

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November 16, 2015 12:00 PM

New York

New York

When there were only black and white market of medicines, now comes the emergence of gray market where illicit profiteers are ostensibly marketing competitive brands without regulatory approval. These products are seldom “counterfeit” per se, but are very often substandard. Since it can either be safe or hazardous, extra careful consumers are cautious of purchasing their medicines from these stores. However, there knows when you will be dealing with gray market.

These kinds of markets are illegal, yet are often permitted because of the lack of other resources. Those who mostly profit from products of gray market are the poor and less fortunate since they are offering cheaper medicines. In the case reported by Jakarta Post in Indonesia shows how a small independent pharmacy sets up a shop, got a license with a state board of pharmacy and then signs a contract with a primary wholesaler. The contract between the wholesaler and store states that they are to sell the medicines directly to consumer. However, this reported pharmacy sold some of their products to other retailers, who also have connection working in a fraudulent manufacturing company. Moreover, the authorities are even more concerned of the fact that these medicines can be sold in the gray market for five to six times within the day, making it more improbable to catch the culprit.

The Peterson Group, a non-profit organization campaigning against counterfeit medicines stated that the existence of gray market could be the main reason why fraud medicines exist. Yet, with the demand, the authorities cannot fully obliterate the illegal activities.

Gray pharmaceutical companies often take advantage of legal gaps, unwillingness to enforce existing laws and flexibility of operations. Criminals and terrorist organizations are known to seek out the weakest link among local jurisdictions. As capacity increases in one region, illicit syndicates and terrorists move on to expose the loopholes in the next.

A survey was generated where hundreds of comments from respondents who have a lot of complaints against their governments were conducted. These respondents feel unsupported by regulatory agencies that have not stepped in to control the gray market, betrayed by some pharmaceutical manufacturers or wholesalers who they presume may have sold medications in short supply to gray market vendors, perplexed regarding how gray market vendors know about pending drug shortages before hospitals do, outraged by the price gouging that accompanies the sale of these vital medications, and frustrated by the wasted time spent on unsolicited communications (telephone calls, emails, faxes) from gray market vendors.

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