Counterfeit Drugs

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					Counterfeit Drugs

Dr K Balasubramaniam

A counterfeit drug is a legal and criminal issue which should not be mixed with quality and patient
safety. From a public health point of view, the WHO accepted quality control measures are the
only way to ensure the quality, safety and efficacy of a drug. Strengthening Intellectual Property
(IP) will never ensure these. What HAI has advocated and campaigned for is the strengthening of
drug regulatory (DR) systems in developing countries to ensure drugs in the market are safe,
effective and of good quality.

An effective DR system ensures that a public health focus frames the efforts to prevent the entry of
substandard, fake and spurious drugs. The problem facing developing countries is the lack of
effective DR systems. According to WHO statistics of the 191 member states, only about 20
percent have well developed DR system, about 50 percent have varying levels of developmental
and operational capacity and 30 percent have no DR system in place or very limited capacity.

The root causes of entry of substandard and fake drugs is the absence of effective DR system and
non availability of the required amounts of drugs to meet the total needs. The rational solution to
prevent entry of substandard and fake drugs is development and/or strengthening the DR system
and ensure the availability of drugs required to meet total needs. On the other hand the irrational
solution to prevent entry of fake drugs is to strengthen IP enforcement.

IP enforcement will be counter productive. There is at present international debates regarding the
negative impact of intellectual property rights (IPRs) on access to knowledge, public interest and
development. This was clearly underscored in the Report of the Commission on Intellectual
Property Rights entitled, "Integrating Intellectual Property Rights and Development Policy", and a
number of analytical studies published by the South Centre, Third World Network, MSF,
Knowledge Ecology International and HAI.

The Inter-governmental Working Group of Public Health and Innovation set up by the WHO was
to de-link patent protection from innovation in order to improve access to drugs. If in this scenario
where access to drugs is threatened by patent protection, any attempt to enforce IP infringement
will further deny people living in the developing countries access to drugs.

Why are the US, EU and the multinational drug companies (MNCs) negotiating an Anti-
Counterfeit Trade Agreement (ACTA) behind closed doors? This is a classic example of strategic
forum shifting from one forum to another in order to enforce strong patent protection. When the
negative impact of strong patent protection is presented with empirical data in one forum, they
shift to another as the following history of forum shifting demonstrates.

Till 1995 WIPO was the UN agency mandated to administer the Paris Convention (PC) on
Industrial Property Rights. The PC allowed countries to enact national patent laws which could
exclude process and product patents. The last diplomatic conference on the revision of the PC
began in the late seventies and went on to the early eighties in WIPO. There was a long and
protracted debate and consensus could not be achieved on the issue of compulsory licenses. The
US was the only country that voted against a compromise. The Revision could not proceed. The
US, EU took IPRs to the Uruguay Round of GATT Negotiations in 1987 which ended with the
TRIPS Agreement and setting up of WTO in 1995. Developing Countries supported by several
NGOs including HAI showed convincing evidence of the negative impact of TRIPS on access to
drugs. They eventually achieved victory with the adoption of the DOHA Declaration by the WTO
Ministerial council in 2001.

The DOHA Declaration underscored the rights of WTO member countries to make full use of the
safeguard provisions in the TRIPS agreement such as compulsory licensing and parallel importing
to protect and promote public health and to enhance access to drugs.

Having failed in the WTO the forum shifted back to WIPO. Developed countries introduced the
Patent Agenda into WIPO's work programme. Developing member states argued that the Patent
Agenda completely ignored the rights and interests of consumers and governments of developing
countries. The patent agenda focused attention to solve the problems faced by patent owners (the
MNCs) and administrators in national IP offices. The developing countries supported by NGOs
succeeded in introducing the Patent Development Agenda into WIPO's work programme.

The objective of the Patent Development Agenda is to ensure that developmental considerations
form an integral part of WIPO's work. When finally adopted in October 2007, WIPO General
Assembly also adopted a set of 45 recommendations to enhance this development dimension of
WIPO activities. In addition, the Member States approved a recommendation to establish a
committee on Development and Intellectual Property (CDIP). Thus the US, EU and MNCs failed
in the WIPO.

The present focus on counterfeit drugs and the Anti-counterfeit Trade Agreement (ACTA) is the
latest in the strategic forum shifting by the US, EU and the multinational drug industry to ensure
strict enforcement of intellectual property rights (IPRs). The US and EU are planning to use
ACTA to evaluate IP enforcement in developing countries against counterfeiting and piracy based
on estimated losses that their industries claim to exist according to their own surveys. But there is,
infact, a lack of reliable information and objective data as well as a universally accepted definition
of counterfeits and piracy that would allow a proper quantification of the magnitude and impact of
international trade in counterfeit drugs and pirated medicines and an adequate assessment of the
problem it poses. In order to assess this problem the WHO has developed the following definition
of counterfeits. "A medicine which is deliberatelyand fraudulently mislabelledwith respect to
identity and /or source. Counterfeiting can apply to both branded and generic products and
counterfeit products may include products with correct ingredients or with the wrong ingredients
without ingredients, with insufficient active ingredients, or with fake packaging".

In the WHO definition, counterfeits clearly apply only to "mislabelling"of medicines and only to
those situations in which the mislabelling is carried "deliberately"and "fraudulently". Thus it
excludes those situations in which there are legitimate disputes about the trade mark status of a
label and the burden of proof is with the accuser. On the other hand IMPACT (International
Medical Products Anti-counterfeiting Task Force) a WHO initiative, gives "new definition" of
counterfeit medical product. A medical product is counterfeit when there is a false representation
in relation to identity, history or source. This applies to the product, its container or other
packaging or labelling in formations.

Counterfeits can apply to both branded and generic products. Counterfeit may include products
with correct ingredients/components, with wrong ingredients components, without active
ingredients with incorrect amount of active ingredients or with fake packaging", by avoiding the
terms, "deliberately and fraudulently" relieving the investigators of the onus of proving voluntary
possession of counterfeit medical products and transferring the burden of proving their good
intentions on those found in possession of counterfeits. This is a traversity of the normal forms of
justice where the guilty person has to prove he is innocent and not guilty.

Member States should ask the WHO why IMPACT, changed its original definition. The new
definition is designed to assist MNCs to get their IPRs strongly protected. On the other hand the
developing countries will face more problems to get access to life saving drugs.

WHO appears to initiate IP enforcement through its initiative IMPACT which is supported by the
International Federation of Pharmaceutical Association (IFPMA), representatives of WTO, WIPO,
OECD and Interpol. Conspicuously there are no representatives from G77, the grouping of
developing countries and civil society organizations. IMPACT tends to be industry oriented and to
blurs the distinction between counterfeits on the one hand and generics, parallel trade and
compulsory licensing which are legitimate business practices, on the other. This is similar to the
drug industry argument that compulsory licensing, is patent theft, piracy or counterfeit whereas
compulsory licensing is legal under national legislation and TRIPS Agreement.

The strategy behind the whole issue seems to be to casually mix every thing together including
piracy, compulsory licensing, parallel imports and generics under the single banner of the emotive
term "counterfeit" use it to frighten consumers, harness the power of public health safety concerns,
link it with IP protection and enlist public sector support in enforcing private rights meaning that
taxpayers dollars would be used to protect private rights

This is illustrated in the presentation Dr V Reggie of WHO Geneva gave to WHO/SEARO, New
Delhi on 7th August. The presentation was entitled "Counterfeits Kill!" The graphic shows a
venomous hooded cobra ready to strike! This will certainly frighten consumers. However, it is
not factually correct. The two definition of "Counterfeit" given in the presentation includes
medicines with the correct ingredients. These counterfeits will certainly not kill. Therefore a
sweeping title is misleading; another statement refers to "the 'perfect copy' myth without defining
what a perfect copy is. This is blatant thinly veiled attempt to equate generics with "perfect copy"
and thereby call quality and safety of generics into question. Another department in the WHO
actively promoted the use of generics. When experts within WHO disagree where do the general
public go?

The presentation quite correctly, states that not all substandard drugs are counterfeit. Therefore a
system to monitor infringement of IPRs and to strictly enforce patent protection to keep
counterfeits out of the market can never weed out all substandard drugs from this market. It is also
accepted that strict enforcement of IPRs will reduce access to life saving drugs. Implementation of
ACTA will, therefore lead to two dangers (i) Inability to remove all substandard drugs from the
market (ii) reduce access to life saving drugs.

To remove counterfeits, the best solution is to remove the cause. In developing countries,
counterfeits enter the market because of the lack of required drugs. The solution to counterfeit is,
therefore, for the government to ensure the availability of the required supply of needed drugs at
affordable price by implementing the new WHO Global Strategy and Plan of Action on Public
Health Innovation and Intellectual Property approved at the WHA in May 2008. This should be
the priority for the WHO not to redefine counterfeit and call counterfeit a killer.

--
bala@haiap.org
Sri Lanka, October 2008

				
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posted:8/9/2011
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