Resident Fellow Roger Bate

Suresh Sati, a large and cheerful man from a small city in northeastern India, has been hunting down counterfeit goods for more than half his 49 years. From the moment I meet him at my hotel in Delhi, I can tell that he enjoys his work. Most days, Sati makes the rounds visiting his undercover agents, who live near the main wholesale markets in Delhi, where most fakes are traded. They pass on news and rumors about new dealers and crooked police. As we set off down the road toward one of the city's sprawling markets, Sati smiles nostalgically as he recalls his first anticounterfeit raid, back in 1981, on a small-scale outfit manufacturing knockoff tv antennas. His work has changed a great deal since then; his targets today are far better financed, organized, and dangerous. These days, Sati runs a company called "The Protector," which leads raids for multinational corporate clients. His bread-and-butter work: hunting for fake drugs.

Back in his basement office the next day, in an unremarkable building in residential Delhi, Sati offers me a glimpse of what he is up against. He lays out the samples of phony drugs he has collected from recent clandestine purchases and the previous week's raid. He places two vials of liquid erythromycin, an antibiotic used to treat bacterial infections, on the table in front of me. One vial is the real thing; the other contains water from a Delhi tap. "Which one is the fake?" Sati quizzes. I can't say. They look absolutely identical.

During the past decade, trafficking in counterfeit drugs has become one of the world's fastest-growing criminal enterprises. The World Health Organization (WHO) estimates that more than 30 percent of medicines on sale in parts of Africa, Asia, and Latin America are fakes. By 2010, the global turnover for phony pharmaceuticals is projected to be $75 billion, a 90 percent increase since 2005. A sharp increase in drug seizures also points to a mounting crisis. In 2006, the European Commission reported that customs agents intercepted 2.7 million counterfeit drugs at EU borders--an increase of 384 percent from a year earlier. . . .

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Roger Bate is a resident fellow at AEI.

Reproduced with permission from FOREIGN POLICY, www.ForeignPolicy.com, #168, September/October 2008. Copyright 2008 by Washingtonpost.Newsweek Interactive, LLC (WPNI), a subsidiary of The Washington Post Company.