US embassy cable - 05TAIPEI2742

UNCLAS SECTION 01 OF 02 TAIPEI 002742 
 
SIPDIS 
 
STATE PLEASE PASS TO AIT/W AND EAP/RSP/TC 
 
STATE ALSO PASS USTR FOR WINELAND/WINTERS/FREEMAN 
REF: TAIPEI 1033 
 
E.O. 12958: N/A 
TAGS: KIPR, ECON, ETRD, TW, IPR 
SUBJECT: COUNTERFEIT PHARMACEUTICALS SOLD ON INTERNET 
 
1.  SUMMARY:  PROMPTED BY AN INVESTIGATIVE NEWS 
REPORT THAT INTERNET SALES OF THE POPULAR WEIGHT 
LOSS DRUG REDUCTIL (MANUFACTURED BY ABBOTT 
LABORATORIES) INCLUDED COUNTERFEIT PRODUCTS, 
SPECIAL AGENTS OF CRIMINAL INVESTIGATION BUREAU 
RAIDED A RESIDENCE IN TAIPEI COUNTY MAY 24 AND 
ARRESTED ONE SUSPECT. THE SUSPECT TOLD POLICE THAT 
SHE HAD BOTH PURCHASED AND SOLD THE PRODUCTS 
ONLINE AND WAS UNAWARE THAT THEY WERE COUNTERFEIT. 
ABBOTT'S TAIWAN MANAGER ESTIMATED THAT AS MUCH AS 
20 PERCENT OF REDUCTIL SALES IN TAIWAN COULD BE 
COUNTERFEITS.  END SUMMARY. 
 
PRESS BREAKS THE COUNTERFEITING CASE 
------------------------------------ 
 
2. ON MAY 24, THE UNITED DAILY NEWS REPORTED THAT 
COUNTERFEIT REDUCTIL, A POPULAR WEIGHT LOSS DRUG, 
WAS BEING SOLD OVER THE INTERNET.   JOURNALISTS 
DISCOVERED THAT A 26 YEAR-OLD NURSERY WORKER, 
IDENTIFIED AS CHANG MEI-TING, CLAIMING TO BE A 
NURSE, PARTICIPATED IN ONLINE DISCUSSIONS ABOUT 
HEALTH AND WEIGHT LOSS AND OFFERED TO SELL 
REDUCTIL PURCHASED ABROAD AT BELOW TAIWAN MARKET 
PRICES.   THE ONLINE DISCUSSION REPORTEDLY REACHED 
OVER 50,000 INTERNET USERS. 
 
LOOKS JUST LIKE THE REAL THING! 
------------------------------- 
 
3.  JOURNALISTS BOUGHT REDUCTIL FROM CHANG AND 
SENT THEM TO DEPARTMENT OF HEALTH (DOH), TAIPEI 
CITY GOVERNMENT, AND ABBOTT LABORATORIES SERVICES 
(TAIWAN) CORP. FOR TESTING.  THE RESULTS OF THE 
TEST INDICATED THAT THE REDUCTIL SOLD BY CHANG DID 
CONTAIN THE SAME ACTIVE INGREDIENT (SIBUTRAMINE) 
CONTAINED IN GENUINE REDUCTIL, AND AT CLOSE TO THE 
SAME DOSAGE (14.64MG, AS COMPARED TO 15MG.) 
HOWEVER, THE DIRECTOR OF DOH'S TESTING CENTER 
IDENTIFIED THE PRODUCT AS COUNTERFEIT BASED ON THE 
COLOR OF THE CAPSULE.  IN ITS PUBLIC REPORT, DOH 
EMPHASIZED THAT COUNTERFEIT PHARMACEUTICAL 
PRODUCTS COULD CONTAIN A FULL DOSAGE OF ACTIVE 
INGREDIENTS BUT STILL BE COUNTERFEIT AND WERE NOT 
RELIABLE. 
 
4. THE TESTS CONDUCTED BY ABBOTT LABORATORIES 
SERVICES (TAIWAN) CORP. FOR 3 REDUCTIL CAPSULES 
SOLD ON THE INTERNET SHOWED THAT THE ACTIVE 
INGREDIENT CONTAINED IN EACH CAPSULE EXCEEDED THE 
5 PERCENT VARIATION TOLERANCE LEVEL SET BY THE 
AUTHORITIES, PROVING THAT THE REDUCTIL SOLD ON THE 
INTERNET WAS A COUNTERFEIT PRODUCT.  THE MANAGER 
OF ABBOTT LABORATORIES SERVICE CO. (TAIWAN) 
IDENTIFIED THE REDUCTIL SOLD ON THE INTERNET AS 
USING ABBOTT'S GERMAN PACKAGING BUT CONTAINING 
PILLS THAT RESEMBLED ABBOTT'S AMERICAN PRODUCT. 
 
HOW TO USE THE INTERNET TO MAKE BIG BUCKS! 
------------------------------------------ 
 
5.  SUSPECT CHANG MEI-TING TOLD INVESTIGATORS THAT 
SHE PURCHASED THE COUNTERFEIT REDUCTIL FROM AN 
INTERNET CONTACT, WHO TOLD HER THAT THE PRODUCT 
WAS A PARALLEL IMPORT FROM LICENSED FIRMS IN 
AUSTRALIA AND GERMANY.  CHANG SAID SHE PURCHASED 
REDUCTIL FROM HER INTERNET SUPPLIER AT A PRICE OF 
NT$2,000/PER 28 CAPSULES (ABOUT US$62) AND SOLD AT 
PRICES OF NT$2,800-3,000/PER 28 CAPSULES (US$90) 
OVER THE INTERNET.  MARKET PRICE OF GENUINE GOODS 
IS NT$4,000/PER 28 CAPSULES (US$125). 
 
6.  CLAIMING THAT THEIR PRODUCTS ARE PARALLEL 
IMPORTS IS A COMMON TACTIC AMONG COUNTERFEITERS. 
ABBOTT LABORATORIES SERVICE (TAIWAN) CO. AND 
EXPERTS FROM TAIWAN'S NATIONAL YANG MING 
UNIVERSITY TOLD THE PRESS THAT PRODUCERS OF 
COUNTERFEIT PRODUCTS COULD IMPORT GENERIC BULK 
PHARMACEUTICALS TO MAKE AND PACKAGE CAPSULES IN 
TAIWAN. 
 
FAKE DRUG SALES ON INTERNET=SERIOUS PENALTIES 
--------------------------------------------- - 
 
7.  A SPOKESMAN FOR THE DEPARTMENT OF HEALTH NOTED 
THAT SALE OF PHARMACEUTICALS OVER THE INTERNET WAS 
ILLEGAL IN TAIWAN.  A FINE OF NT$30,000-150,000 
(ABOUT US$1000-5000) CAN BE IMPOSED ON VIOLATORS 
IN ACCORDANCE WITH THE PHARMACEUTICAL AFFAIRS LAW. 
MOREOVER, A PERSON SELLING COUNTERFEIT OR 
PROHIBITED PHARMACEUTICALS WILL BE SUBJECT TO A 
JAIL SENTENCE OF NOT MORE THAN 7 YEARS AND/OR FINE 
OF UP TO NT$5 MILLION (US$156,000).  IN ADDITION 
TO THE PUNISHMENT STIPULATED IN THE PHARMACEUTICAL 
AFFAIRS LAW, THE SUSPECT COULD ALSO FACE FRAUD 
CHARGES.  PAAL