I really don't know the particulars of this case, what the money flow was or whether the strips in this case were exact functional copies. There were legitimate wholesalers and pharmacies in the loop apparently. The end result may very well have been lower prices at the pharmacy, or the money may have been pocketed by a single middle man. There may even have been some black market diversion of the product.
There were no injuries reported, according to the article, although the risk is obvious. The problem was discovered by the manufacturer of the proprietary strips, not by the consumers.
It would not necessarily be out of the "goodness of his heart" that someone would provide exact functional copies. It would not be good business to have consumers injured or killed. My understanding of the patent process is that the complete chemical structure of patented drug products must be disclosed. That makes patent breaking (and generics and "legitimate" knock-offs) very feasible. Then with Chinese labor, no marketing budget (stealing the trademark), no FDA, no standards...you get my point.
All I am saying is that I never see the thing you suspect (that the counterfeit products are completely bogus) addressed. Here is a link where Johnson and Johnson says that the test results are "erratic." They don't say that the strips are just completely non-functional. That raises the probability in my mind that the strips are actually patent and trademark infringements, perhaps not subject to the quality control of the patent/trademark owner/licensee, but not mere fakes.
http://www.jnj.com/news/jnj_news/20061017_101807.htmThe articles on counterfeits never seem to address this issue. Perhaps the MSM think it is irresponsible to say "Yes, the counterfeits contain the same patented technology, but they have erratic quality control." If they did, there might be a large shift to buying the Chinese stuff in or out of the pharmacy by a lot of poor people, not just in the U.S., but worldwide. It would sort of be the drug equivalent of Napster. The music is pirated, but it sounds fine.
Counterfeiting is wrong and illegal in more than one way. But I would like to be told what is actually going on. Is it China countenancing the breaking of our patents, or is it mere fraud, or what?