Security expert says Internet pharmacy makes $150m from spam

A study of producers of 'spam' e-mail messages has found that the biggest operators in the illicit sector are making considerable profits from the sale of counterfeit or imitation drugs, according to research carried out in the USA.

Pat Peterson, the sponsor of the study, is an expert on anti-spam solutions and works for networking and communications technology and services giant Cisco Systems. He has spent 18 months examining the e-mails sent via Storm, a type of computer virus that allows a person's computer to be hijacked and secretly used to send mass e-mails.

One on-line pharmacy identified in the study - which claims to be based in Canada - had an annual turnover of $150m offering product which originated in Mumbai, India, or Shanghai, China, according to Peterson.

Among the study's findings is a shift from traditional fraud involving the offering of a service for the purpose of stealing a person's credit card details, to actually supplying a plausible imitation of the product.

Worryingly, in cases involving the most commonly-touted erectile dysfunction drug, Pfizer's Viagra (sildenafil citrate), it has become clear that some spammers are offering fake tablets containing between 100 per cent and 110 per cent of the active ingredient.

The reason why counterfeiters are willing to offer a relatively close copy is that more money can be made from repeat orders than from a one-off fraud, according to Peterson.

In the case of some branded medications, the price of the finished product, due to the factoring in of R&D costs by the legitimate manufacturer, is high enough to make the use of genuine ingredients viable.

Peterson's investigation led him to GlavMed, a Russia-based firm which, he claims, contracts manufacturing sites in China and India to produce copycat versions of blockbuster drugs, according to a report in the New York Times.

He likens the business practices adopted by the e-mail marketing operators as similar to those of Internet retailers Amazon and Dell Computers, with proper customer service divisions and supply-chain management.