On the trail of the world-wide web of fake lifestyle drugs

In the second part of our investigation, Severin Carrell reveals how eastern Europe is profiting from counterfeit pharmaceuticals

Undercover investigators for the world's largest drug companies are quietly hunting in the capital cities of eastern Europe, snooping around chemists, surfing websites and loitering on street corners.

High on the list of places to visit are Poland, Bulgaria and Turkey, where they are tracking down counterfeit drugs and back-street medicine factories which churn out millions of pounds' worth of fake pills every year.

It is a global industry now worth more than £20bn a year, a trade which is ruthlessly exploiting the internet and its lack of regulatory control. Dubious offers for "lifestyle" medicines such as Viagra now dominate unsolicited "spam" email adverts.

Many experts, including the World Health Organisation (WHO), believe the problem will get much worse. These three countries are all poised to join the European Union, and are havens for illegal drugs factories and smugglers. Their long frontiers border countries such as Russia that are notorious for the ready availability of fake drugs.

Poland is one of 10 countries that will enter the EU on 1 May, and Bulgaria and Turkey are not far behind. According to the WHO, that will make the EU even more vulnerable to the global trade in illegal pharmaceutical drugs.

Dr Eshetu Wondemagegnehu, the WHO's expert on counterfeit drugs, said the risks were "obvious". Similar problems have already been seen in Africa and Asia, where up to 25 per cent of drugs sold are fake or substandard. The EU's historically strict regulations would quickly be undermined by far laxer controls in new member states. "From the experience with tobacco smuggling in Europe, you can forecast that it can lead to more counterfeiting and more counterfeit drugs appearing in Europe," he said.

The medicines most likely to dominate this illegal trade are the lifestyle drugs that are already routinely faked in the US: the erectile dysfunction drugs such as Viagra and Cialis and slimming drugs such as Lipitor or Xenical. Genuine Viagra costs at least £7.65 per 100mg pill; many modern obesity "cures" can cost £1.65 per pill, and human growth hormones cost £900 per course. Their availability is tightly controlled by EU regulations, so fraudsters see these high prices as a great opportunity - selling cheaply made, adulterated, faked or placebo drugs can lead to swift, easy profits.

Pfizer, one of the few major pharmaceutical firms that will openly discuss the trade, now routinely finds fake Viagra in Poland, Russia and Bulgaria, where it has helped to close down three counterfeiting factories. Much of it comes from China and south Asia.

The internet offers drug peddlers the most valuable tool they have ever seen. Email security company Clearswift says Viagra and diet pill offers on the internet totalled 40 per cent of the spam sent to British email users last month.

In Britain, the government Medicines and Healthcare products Regulatory Agency (MHRA), now seizes about £3.2m-worth of illegally sold or fake Viagra a year. Its enforcement group gets some 10 to 15 complaints about dubious websites each month.

Although most are foreign-run, it has closed down seven internet operations and forced seven other sites to stop making illegal claims. Three website operators have been convicted for breaching the UK's strict rules on selling prescription medicines.

Yet Peter Lowe, a fraud expert at the Counterfeiting Intelligence Bureau, said the agency is only scraping the surface of the problem. "What the internet has done is enable counterfeiters to flog their products in high-value markets. The fact that they are coming into this country is a reality," he said.

Experts claim the MHRA's investigators privately admit that with extra resources, even more illegal internet operations would be closed down. However, the Royal Pharmaceutical Society, which polices Britain's chemists, continues to insist the problem in the UK is minimal and under control.

The National Criminal Intelligence Service is also cautious about the risks of a surge in drugs fraud. Its spokesman said there were immense fears that the collapse of the Soviet Union would see violent Russian mafia dominating organised crime in Europe, and that Albanian gangs threatened the UK. Neither has happened.

However, John Theriault, a former FBI executive who now runs Pfizer's global security operation, said the evidence of the impact of eastern European drugs fraud was already compelling.

"We've uncovered counterfeit pharmaceuticals in these countries and identified manufacturing operations in some of these countries," he said. "I would agree completely that the accession countries are going to contribute to the problem."