PHA-Exch> Counterfeit drugs

[Claudio Schuftan]

From: bala at haiap.org bala at haiap.org

*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 *deliberately* *and fraudulently
mislabelled* with 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.
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