On Tuesday, 20 May 2008, the United Arab Emirates, Nigeria, Ghana, Gambia and Tunisia introduced a draft resolution (A61/A/Conf. Paper No 1) on counterfeiting.
While counterfeiting medicines is an important public health problem, and as traditionally defined, is a criminal enterprise that should be subject to tough legal sanctions, the resolution is problematic.
Specifically, the resolution may create the impression that substandard medicines (brand or generic) can usefully be described as counterfeits. What is wrong with this? First, the larger issue of substandard medicines is not confined to counterfeits. There are substandard products sold by brand name and generic drug manufacturers, where there is no criminal intent to deceive anyone about the contexts or origin of the products. Second, not all counterfeits are of low quality.
The word counterfeit is highly emotive, and can be misleading if used to describe issues that have nothing to do with counterfeits.
There is also sometimes a mistaken impression that all infringements of intellectual property can be characterized as counterfeits. Disputes about the infringement of intellectual property rights are broader than those limited cases involving counterfeits. A recent example of confusion over this topic was a recent assertion that Switzerland was a major source of counterfeit medicines. According to Swiss officials, this assertion actually referred to a case involving a dispute over alleged patent infringement, an area of much complexity and controversy, not usefully described as counterfeiting.
In 1992, the WHO defined a counterfeit medicine as: “a medicines which is deliberately and fraudulently mislabelled with respect to identity and/or source. . . . According to WHO definition, what makes a drug/medicine counterfeit is the deliberate or intentional (criminal) nature of the mislabelling of a product.”[fn1]
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[*fn1] “Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging. (http://www.who.int/medicines/services/counterfeit/faqs/05/en/index.html)
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Although the term counterfeiting has different definitions around the world, it is often defined as a TRADEMARK INFRINGEMENT.
For example, the United States Federal Food, Drug and Cosmetics Act defines a counterfeit drug as
“a drug which, or the container or labelling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, of device or any likeness thereof, of a drug manufacturer, processor, packer, or distributor, other than, the person or persons who in fact manufactured, processed, packed, or distributed such drug and which thereby falsely purports or is represented to be the product of, or to have been packed or distributed by, such other drug manufacturer, processor, packer, or distributor.”
A drug manufacturer (brand or generic) that does not” deliberately and fraudulently mislabel with respect to identity and/or source” is not a counterfeiter, even if there are other concerns over product quality or possible infringements of patents.
The WHO should contribute to efforts to ensure that medicines meet appropriate standards for quality. This will include cases of substandard brand, generic, or counterfeit medicines. Normally, this would focus on measures to improve and strengthen national regulatory programs. There is also an important role for the WHO pre-qualification program, which at present is under resourced and limited to only medicinal products used for HIV/AIDS, malaria, tuberculosis and for reproductive health.
The role of the WHO in policing counterfeits is an area that should be distinguished from the more general role of ensuring the quality of medicines. However, whether intentional or not, the resolution in some ways suggests the term counterfeit is a unifying term for addressing concerns over the quality of medicines.
While there are cases of counterfeit goods being placed in commerce, and it is important to curb such activity, the term “counterfeit” should not be used to describe all activities that may constitute an unauthorized manufacture or use of a medicine.
Items which are similar to other goods, including goods of inferior quality which are sold for a lower price, should not be considered counterfeits, unless there an intent to deceptively represent the content or origins.
Generic drugs that do not falsely use another firm’s brand name or trademark are not counterfeits. Unauthorized uses of a product that are allowed by law, such as products made under legitimate limitations and exceptions to patents, or generic medicines that are off-patent or legitimately licensed under voluntary or non-voluntary licenses, are not counterfeit products. Not all infringements of patents or other intellectual property rights can be usefully described as counterfeits, and often the issue of what constitutes infringement is a matter of controversy, particularly, but not only, in the area of patents, where issues concerning patent validity and relevance are quite difficult, or where the relationship between rights and exceptions to rights are complex.
It is important to differentiate between counterfeiting (i.e fake goods) and the importation of legitimate stock at a lower price, as “grey market” parallel traded goods that are acquired legitimately in one market, and resold legally under under the exhaustion of rights doctrine in another market. There is a tendency by some to conflate the two issues in order to stigmatize the practice and ignore the benefits of parallel trade. Restrictions on parallel trade can lead to anti-competitive behavior, and by facilitating market segmentation and price discrimination, lead to higher prices for consumers in markets that have a lack of competition.
The resolution could be improved by providing a paragraph that outlines in concrete terms the acts that are not covered by the term counterfeit. It also could be improved by language that says that not all quality issues involve counterfeiting, and that the WHO needs to do more in *other* areas to ensure that medicines are of appropriate quality, including (1) strengthening national drug regulation efforts and (2) expanding the WHO qualification program, which now is limited only to AIDS, TB, Malaria and family planning products.