Uncovering Ghost Pharmacies: A Case of Counterfeit Drugs

By Anuj Choudhary Dec 01, 2023

The online pharmacy market in India is growing rapidly, but it also faces many challenges and risks, such as the presence of fake or substandard drugs, lack of proper regulation and oversight, and potential harm to consumers' health and safety. This article pertains to a case where a ghost pharmacy was selling counterfeit drugs of a reputed pharmaceutical company.

The case began when we received a complaint from the audit committee of Pharma & Co. (name changed for confidentiality), a leading manufacturer of generic drugs in India. The company had received several complaints from customers and consumer forums about the quality and efficacy of their drugs, which were purchased online from a website owned by Health & Co. (name changed for confidentiality). The customers claimed that the drugs did not work as expected, caused adverse reactions or had different packaging and labels than the original products.

The audit committee was puzzled, as their sales register showed that they had never sold any product to Health & Co., which claimed to be an online pharmacy that sourced drugs directly from manufacturers. They suspected that Health & Co. was either selling counterfeit drugs or diverting drugs from their authorized distributors. They hired us to conduct a forensic investigation and find out the truth.

Our investigation involved the following steps:

  • Evidence Collection: We visited the website of Health & Co. and ordered a portion of the drugs that were allegedly manufactured by Pharma & Co. We also collected samples of the same drugs from the physical pharmacies that were authorized by Pharma & Co.
  • Labelling: A glaring divergence emerged upon comparing packaging and labelling between the two sources. The Health & Co. drugs exhibited disparities in batch numbers, expiration dates, barcodes and holograms. Moreover, their packaging fell short of Pharma & Co.'s quality benchmarks.
  • Scientific Tests: We ordered chemical and physical tests on the drugs from both sources and found that the drugs from Health & Co. had different composition, potency and purity than the drugs from the physical pharmacies. The drugs from Health & Co. were either diluted, adulterated or contained wrong or harmful ingredients. Some of the drugs also surpassed their expiration date or were entirely devoid of active components.
  • Unravel the Supply chain: We traced the origin and supply chain of the drugs from Health & Co. and found that they were not sourced from Pharma & Co. or any of their authorized distributors. Instead, they were procured from a network of illegal manufacturers and suppliers, who operated from various locations across the country. These entities used fake or stolen licenses, invoices and documents to evade detection and regulation.
  • Website Forensics: We analyzed the website and the online transactions of Health & Co. and found that they were not registered or licensed as an online pharmacy in India. They also did not comply with the rules and regulations of the Drugs and Cosmetics Act and Rules of India, such as requiring a valid prescription, verifying the identity and credentials of the customers and the doctors, and maintaining proper records and documentation. The website also had several errors, such as spelling mistakes, grammatical errors and broken links.
  • Analytics and Digital Forensics: Utilizing data analytics and digital forensics, we unveiled the identities and operators of Health & Co. and their network. Their tactics included fraudulent identities, multiple bank accounts and proxy servers, effectively hiding their true identities and whereabouts. Connections with organized crime groups further deepened the intrigue.

Based on our findings, we concluded that Health & Co. was a ghost pharmacy selling counterfeit drugs for Pharma & Co. and other pharmaceutical companies. This posed a serious threat to the health and safety of the consumers, as well as the reputation and revenue of the legitimate manufacturers. We reported our findings and evidence to the audit committee of Pharma & Co., who then took legal action against Health & Co and their associates. With the help of Pharm & Co., we also informed the relevant authorities, such as the Central Drugs Standard Control Organization, the Food and Drug Administration and law enforcement, who then shut down the illegal manufacturing and supply units and arrested the culprits.

As preventive measures, we suggested the following recommendations to Pharma & Co.:

  • Strengthen internal controls and monitoring systems to prevent and detect any diversion or leakage of their drugs from their authorized distribution channels.
  • Enhance packaging and labelling features to make them more secure and tamper-proof, and to use advanced technologies, such as RFID tags, QR codes and blockchain, to track and trace their products throughout the supply chain.
  • Educate customers and stakeholders about the risks and dangers of buying drugs from unauthorized or unverified online sources, and to encourage them to verify the authenticity and quality of their products before using them.
  • Collaborate and coordinate with other pharmaceutical companies, industry associations, regulators and law enforcement agencies to share information and best practices, and to combat the menace of counterfeit drugs and ghost pharmacies.

The unravelling of Health & Co.'s sinister operations serves as a clarion call for heightened vigilance in the pharmaceutical realm. Safeguarding the integrity of medications and protecting the health of consumers necessitates a united front against counterfeit drugs and the enigmatic world of phantom pharmacies. 

It is important to note that the views expressed in the above article are strictly personal and do not reflect the opinions of any organization mentioned.