Non-Environmental Cost-Benefit News

Call it a consciousness-raising session on counterfeiting, not of money but of products.


Officials at all levels of government have been driving home the point that counterfeits show up across the marketplace at a staggering cost to legitimate companies and taxpayers, and in some cases even raise a hazard for consumers.


Last month the New York City comptroller's office weighed in. It issued a report estimating counterfeiting cost the city and state $2.6 billion in tax revenue last year -- about $1 billion of that amount lost to the city alone. The tax-dollar drain, the report says, "significantly affects the city's ability to deliver essential services."


In the fiscal year that ended Sept. 30, counterfeit goods valued at $138 million were seized at the country's borders, according to Daniel Baldwin, an acting assistant commissioner in U.S. Customs and Border Protection, a bureau of the Department of Homeland Security. While it tries to keep counterfeit goods from entering the country, Baldwin says, "our priority mission is to stop terrorism." So the bureau has added incentive, he says, to work more with industry and international law enforcement agencies to curb counterfeiters.


Brian Monks doesn't have to be told the impact of counterfeiting. He has been fighting it since 1996 when Northbrook, Ill.-based Underwriters Laboratories started a formal program to work with law enforcement officials to protect the "UL" seal, which shows products meet UL standards.


One check by staff, for example, led to a UL warning last January about an unspecified number of lamps sold nationally at Big Lots stores. The lamps bore counterfeit UL holographic labels, the warning said, and posed a possible shock hazard.


The U.S. Food and Drug Administration calls counterfeiting of medications "particularly insidious." An FDA report last February says the counterfeits "may closely resemble legitimate drugs yet may contain only inactive ingredients, incorrect ingredients, improper dosages, sub-potent or super-potent ingredients, or be contaminated." The FDA says the problem in the domestic drug supply is growing. Counterfeit investigations by the FDA ranged from four to six in each year from 1997 to 2000; they have numbered at least 20 annually from 2001 to 2003. To help combat counterfeiting, the FDA last month issued guidelines to encourage the industry to voluntarily expand research and use of technology called radio frequency identification. The day the FDA made its announcement, Pfizer said it would start shipping Viagra with the tags by the end of next year. Viagra was chosen because it is one of the most widely counterfeited drugs.




by Henry Gilgoff