Gilead Sciences Inc (GILD  ) faces a severe threat from the rise in drug counterfeiting, a global issue highlighted by the World Health Organization's staggering estimate of up to $431 billion in counterfeit drugs annually.

In the U.S. alone, incidents of counterfeiting surged by 17% in 2022, totaling 2,121 reported cases, CNBC noted, citing the Pharmaceutical Security Institute.

The company's commitment to combat this issue was underscored by filing a lawsuit in July 2021 against 161 defendants, including pharmacies and wholesale pharmaceutical distributors.

These legal actions accuse entities of involvement in altering Gilead's vital medications, such as Biktarvy and Descovy. Similar suits have been initiated by other pharmaceutical giants like Johnson & Johnson (JNJ  ).

The company's drug, Biktarvy, priced at $3,795 per package, became a target for counterfeiting.

Despite copays being lower for most patients or discounts available through patient assistance programs, the repercussions of counterfeit drugs remain a critical concern.

Gilead's battle against counterfeiting unfolded in a detailed account of discovering irregularities within its medication distribution chain.

The company found instances where authentic bottles of Biktarvy were tampered with, containing incorrect medications like Seroquel, an antipsychotic drug, endangering unsuspecting patients' lives.

In response to the legal actions, some distributors, like ProPharma Distribution, settled with Gilead for $3.3 million, while others, like Safe Chain Solutions, have vehemently denied the accusations.

Johnson & Johnson and Gilead have engaged the legal services of Geoffrey Potter, emphasizing the significance of these cases within the pharmaceutical industry.

Price Action: GILD shares are trading higher by 1.02% at $79.83 on the last check Monday.