Of the 200 allegations the OIG receives on average every year, 6% correspond to product issues.
While small compared to the 51% of allegations that concern fraud, the consequences of product theft, diversion and illicit re-sale can have significant impact.

For example,

product pilfering results in communities not receiving life-saving medicines or other health products such as mosquito nets that they are entitled to. It can result in people having to buy drugs they should have received for free.

It can also lead to people unwittingly buying sub-standard or counterfeit products that can endanger their health or lead to drug resistance.

Types of Wrongdoing Reported to the OIG

Types of
products impacted

OIG investigative findings from 2015-2017 show that a variety of Global Fund-financed health products are subject to wrongdoing or non-compilance, often as a result of a lack of controls or insufficient accountability. These issues can affect all health products, whether high-value medicines or low-value commodities such as condoms or mosquito nets.

Breakdown of product issues investigated by the OIG from 2015-2017

Outside of the formal public health sector there is often private market demand, usually in the form of illicit street markets or pharmacies.

For example,

rapid diagnostic tests for HIV are among products that are affected the most. This is perhaps due to the stigma and discrimination often attached to HIV. Rather than go to a health clinic to have an HIV test, some prefer to buy a test discretely from the black market.

These tests tend to be stolen downstream in the supply chain at weak points where there are fewer controls.

Other high value commodities such as anti-tuberculosis or anti-malarial drugs can also be stolen, often upstream from central warehouses, again because of a lack of controls.

OIG investigations in the last two years have shown that there there is a parallel market for strong antibiotic anti-tuberculosis medicines that are sold off-label as a ‘cure-all’ for other ailments such as headaches or skin disorders.

Case studies

TB drugs stolen and misused

TB medicine financed by the Global Fund was stolen from the national supply chain and resold illicitly on informal street markets. The TB medicine, a strong antibiotic, was being sold as a ‘cure-all’ for many different ailments. Not only did this represent a financial loss for the Global Fund but it also posed a real public health threat as misuse of TB medicines could increase TB multidrug resistance which is difficult to treat.

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Missing Stock Cover-Up

An OIG investigation revealed systemic theft of health products financed by the Global Fund and other donors from a central warehouse. Stock levels were manually adjusted in the computer system to cover up the missing products.

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