Many of the drugs are cheaply made and don't contain the right chemistry, or are stored at incorrect temperatures, while others are deliberate fakes that have authentic-looking pills and packaging but contain only a small percentage of the active ingredient in each pill.
People in Cambodia are unknowingly using "improper drugs and fake drugs which create resistance," Duong Socheat, director of the nation's malaria control program said. The problem is fueled by the country's many informal pharmacies and merchants that don't have the proper training to provide the correct drug regimen, he said.
Of the drugs the country has confiscated, most were traced to China and Thailand, according to Socheat. India is also known to be a large manufacturer of counterfeit and substandard drugs.
There have been some attempts to crack down on the lucrative industry, such as putting in place greater penalties for counterfeiting, but without much effect, said Roger Bate, an economist at the American Enterprise Institute who researches counterfeit drugs.
"They do not regulate -- and cannot regulate -- things as well as the U.S. or Europe. It's not that they don't want to but they have a massive counterfeit problem and they don't have the money," Bate said.
Fake and substandard drugs of all kinds are a problem around the world, but the scale is difficult to gauge. The World Health Organization estimates that as much as 25 percent of the drugs sold in the developing world are counterfeit. A 2009 report from the International Policy Network found that fake tuberculosis and malaria drugs alone may kill about 700,000 people a year.
In Cambodia, the risks extend even beyond loss of life because the area of western Cambodia near the Thai border has historically been at the heart of development of resistance to antimalarials. Resistance to chloroquine surfaced there in the 1970s, followed by resistance to sulfadoxinepyrimethamine and mefloquine.
Recently, two independent studies carried out in western Cambodia found that early stages of resistance is developing for artemisinin, now considered the first-line treatment for malaria.
Being exposed to low levels, or incorrect dosing of a medication can help grow resistance. A 2006 study published in the American Journal of Tropical Medicine and Hygiene found that 68 percent of anti-malaria drugs found in Laos, Myanmar, Vietnam and Cambodia did not contain the correct amount of active ingredient.
Use of monotherapies can also breed resistance, leading to a World Health Organization ultimatum for artemisinin to only be produced and sold as part of combination therapy, called ACT. However artemisinin monotherapy, a fraction of the price of the combination therapy, has continued to be produced and sold as a cheaper alternative.
In Thasanh, Cambodia, the site of U.S.-funded resistance trials, researchers say patients have brought in a wide range of medications. Some are monotherapies, some are clearly just "fever packs," plastic baggies filled with a variety of pills not really intended for malaria, while others appear to be ACT but may not be the real thing.
In an effort to provide access to good quality malaria medications, and also decrease manufacture of fakes, monotherapies and cheaply made medications, the Global Fund and international partners are launching a $225 million program called the Affordable Medicines Facility - malaria, known as AMFm.
The program aims to flood pilot countries with cheap, high-quality malaria medications to reduce the use of improper or fake medications by patients, and to make the market less desirable for producers of the products.
"If there is an economic incentive for illegal production of a product in all likelihood it will happen," said Dr. Olusoji Adeyi, director of AMFm at the Global Fund.
"So by introducing into the market high quality drugs at rock bottom prices it will reduce the economic incentive for the producers and marketers of fake drugs."
Cambodia is the only non-African country among the 11 invited to participate, and was included because of its history with development of drug resistance, said Adeyi.
Once approved, each country will decide how to implement the program through the public and private sectors. If the drugs are not offered for free to the public by the country, they will be available for a small amount of money said Adeyi.
By negotiating with the manufacturers of ACT and subsidizing the cost of the medicine, AMFm would reduce the cost of ACT treatment for the buyer from about $6 to $10 down to 20 to 50 cents.
The group is moving quickly to start the pilot programs and is aiming to begin distribution in early 2010. But not everyone is convinced the scheme will work.
"I like the idea in principle but I have gone on the record as against it in practice as it currently stands," Bate said. There is not yet a complete understanding of how this intervention will affect the market in each country, he argues.
The United States has also not backed the plan yet, citing a lack of data showing the subsidies will work once implemented.
Adeyi counters that time is short and the pilot program is a smart way to move forward before any attempt at a larger roll out.
"As of today, collectively the global health community has tried many things to achieve universal access to malaria medication and collectively we have not succeeded," he said.
"If we stay on this track we will lose artemisinin [to drug resistance] ...we need to have open minds to a new approach."