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Detecting counterfeit pharmaceutical drugs: A multi-stakeholder forensic accounting strategy

Dominic Peltier-Rivest (School of Business, Concordia University, Montreal, Canada)
Carl Pacini (College of Business, University of South Florida – Saint Petersburg, Saint Petersburg, Florida, USA)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 7 October 2019

763

Abstract

Purpose

This paper aims to analyze drug counterfeiting, explains its risk factors and operating and legal environments reviews recent legal cases and develops a multi-stakeholder prevention strategy that includes forensic accounting methods.

Design/methodology/approach

This is a theoretical study based on legal case studies and the best forensic accounting strategies.

Findings

Pharmaceutical drug counterfeiting is a fast-growing fraud that so far has attracted little attention from forensic accountants. A recent estimate projects that criminals collect around $75bn annually in illicit sales from counterfeit drugs (Bairu, 2015). Pharmaceutical counterfeiting also leads to the loss of lives when criminals use lethal chemicals in the manufacturing of fake medicines (Liang, 2006a; Brown, 2005). Because the detection of drug counterfeiting is extremely difficult after fake medicines have been ingested by patients, the strategy developed in this paper is based on early discovery by using reliable tracking technologies and inventory management controls in the supply chain, conducting effective regulatory and legitimate customs inspections, and increasing consumer awareness of basic forensic accounting tools.

Research limitations/implications

This paper extends previous research by integrating various factors into a single multi-stakeholder prevention framework.

Practical implications

The paper presents a synthesized, comprehensive view of the drug fraud epidemic and analyzes concrete steps that can be taken to protect the pharmaceutical supply chain to reduce the loss of lives and monetary injuries.

Originality/value

No previous research has analyzed this issue from a multi-stakeholder point of view and used forensic accounting tools to complement a prevention strategy. The drug counterfeiting prevention strategy developed in this paper addresses the supply side, the regulatory enforcement side and the demand side.

Keywords

Citation

Peltier-Rivest, D. and Pacini, C. (2019), "Detecting counterfeit pharmaceutical drugs: A multi-stakeholder forensic accounting strategy", Journal of Financial Crime, Vol. 26 No. 4, pp. 1027-1047. https://doi.org/10.1108/JFC-06-2018-0057

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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