TEXT OF TODAY'S STORY

Some products that are pirated are relatively harmless. No one's gonna die from a bootleg copy of Brokeback Mountain. But counterfeit prescription drugs - that's another story. Although its rare, they can wind up on the drugstore shelf without you knowing it.

Ashley Milne-Tyte has our story.

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In 2002 Long Island teenager Tim Fagan had a liver transplant. Afterwards, he was put on a drug called Epogen to combat anemia. Fagan's father, Kevin, says one night he and his wife were woken out of a sound sleep by their son's piercing screams . . . .

KEVIN FAGAN: . . . We went running into the bedroom . . . Tim was just writhing in pain, in the bed, going into like almost like a full body seizure.

Turns out the Epogen they'd bought from CVS was counterfeit.

As for how this could happen, right now there's no system-wide method for tracking drugs as they move through the supply chain. Counterfeiters can exploit that weakness and dilute real drugs or swap them for fakes.

What happened to the Fagans is pretty rare. Counterfeit drugs are estimated to make up 1% of US drug sales -- not all cause such a dangerous reaction. Still, it's enough to worry drug makers.

Purdue Pharma makes the painkiller Oxycontin. It's now piloting an electronic tracking system. Each bottle the company ships to Wal-Mart and wholesaler HD Smith contains a radio frequency ID tag. It has a unique number so when it arrives at its destination . . .

AARON GRAHAM: You place the bottle at the end of the RFID gun, pull the trigger . . . [blip-blip noise] . . . and you get a read.

Aaron Graham is the company's chief security officer. He shows me how when he passes an RFID reader or gun over the label, the gun's screen fills with information, including a multi-digit number.

AARON GRAHAM: . . . And then it tells you where to call to get verification that that number is authentic, that it's a Purdue RFID electronic code, and then we at Purdue can tell you where that product originated and where it should be today in the supply chain.

Sounds good. But . . .

JOHN THERIAULT: Is RFID you know a magic bullet that's gonna solve this tomorrow? The answer's absolutely not.

John Theriault heads security at Pfizer, which makes Viagra. The company has tagged all bottles of Viagra that ship in the US. But Theriault says only one of the wholesalers Pfizer ships to has invested in the technology to read the tags.

JOHN THERIAULT: You have to understand that for RFID to work, there has to be technology deployed throughout the entire supply chain from the manufacturer to the point of sale. And that technology is currently expensive; it currently does not exist throughout the entire supply chain.

For now, he says, Pfizer is limiting the number of times a drug can change hands. It now requires wholesalers to buy drugs directly from Pfizer or from other wholesalers to whom Pfizer sells directly. Theriault says until RFID is industry wide, tightening up the supply chain is the most effective way to clamp down on counterfeit drugs.

— Ashley Milne-Tyte

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SERIES: THE PRICE OF PIRACY

Keeping counterfeit drugs off shelves
Ashley Milne-Tyte looks at efforts to prevent counterfeit prescription drugs from reaching consumers.

Organized crime steering the piracy ship
Making and selling counterfeit goods is no longer a cottage industry. And with huge profits on the table, organized criminal gangs from around the globe have moved in. Stephen Beard reports.

The real costs — and benefits — of piracy
Personal finance expert Chris Farrell tells host Scott Jagow if American companies can't beat product pirates, they should join them.

Following the counterfeit profit chain
Organized criminal gangs are behind much of the world's product piracy. Author Tim Phillips talks with host Lisa Napoli.

Even your medicine isn't immune to counterfeiters
As Chinese president Hu Jintao visits the US this week, Marketplace's special series on intellectual property piracy continues with a look at how counterfeit pharmaceuticals have entered the American supply chain.

Piracy has long been a dickens of a problem
The United States may be pointing the finger at China over piracy, but as Stephen Beard reports, the US has its own piracy skeletons in its closet that can be traced back to Charles Dickens' experience.

Piracy hits auto parts industry
Counterfeit goods are seeping into the US economy in ways you might not think. As Scott Tong reports, the auto parts business has been hit hard by knock-offs.