• The Counterfeit Debate over Counterfeit Medicines

    October 12, 2010

    Or how an ethical issue emerging from the poor rule of law in developing countries is used by manufacturers of patented pharmaceuticals in their propaganda war against generic drug manufacturers in the US and Europe.


    The hazard for patients and healthcare posed by counterfeit medicines is a problem, which has gained considerable publicity in the last 25 years. A large number of legal or semi-legal pharmaceutical manufacturers in countries with underdeveloped regulatory systems and inadequate capacity for government control take advantage of the increase in the international exchange of goods and internet trade. Mediators from across the world contribute to the distribution of counterfeit copies of popular medicines. We are not talking about parallel trade authorized in Europe but about free seekers of fast and easy profits in the illegal distribution of medicines.


    There is no international law definition of “counterfeit medicine” and the working definition of WHO is generally used: “А counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. 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.” (see


    The manufacture and distribution of counterfeit medicines can and does affect both brand name pharmaceuticals and generic pharmaceuticals. The genuine author and manufacturer remain obscure and do not have the authority to produce the forged copy. This is why we prefer the definition that counterfeit medicines are trademark medicines not manufactured by the holder of the trademark or without the holder’s permission.


    The major global criticism to WHO today is not so much about the inoperative definition but about the high priority focus on the counterfeit medicines campaign instead of on the strengthening of the regulatory procedures and ensuring high quality, safe and efficient pharmaceuticals. Things have gone so far that a big shipment of Indian generic pharmaceuticals for Latin America was withheld in Rotterdam by the Dutch police, inaccurately applying the European Border Measures Regulation, due to suspicions for counterfeit medicines trade instigated by Merck Sharp & Dohme. (See http://digital.findpharma.com/nxtbooks/advanstaruk/pee_digest_20100609/#/4).
    The negative consequences are in the aspects of law, healthcare and economy. The first type of consequence is associated with the lack of a functional international law mechanism for control and law enforcement in many countries and with the reliability of the huge amount of information. It almost seems as if WHO officials, in an agreement with Big Pharma (like in the swine flu fraud when billions of dollars were swiped from dozens of countries’ national budgets in what was essentially a highway robbery,) have left rule-making and law administration to the mercy of national court systems. In countries with developed brand name pharmaceuticals, magistrates are inclined to favor their own corporate groups, and magistrates in developing countries are often corruptible in favor of those groups.


    The second serious consequence is the high and immediate risk counterfeit pharmaceuticals pose to the life and health of patients who take them. Those are “medicines” without an active ingredient, with an active ingredient in a smaller quantity than is indicated on the packaging, with unstable active ingredient, with decay products exceeding safety standards, with inappropriate pharmaceutical formulation or a formulation which does not ensure adequate release, and many other fraudulent deviations.


    The third consequence is a result of the violation of patent rights held by manufacturers of patented pharmaceuticals or of the copyright and trademarks owned by generic manufacturers. In this case counterfeit medicines fully match the original drug’s specifications – that is, they cover all quality criteria and therefore are copies of the generic products, but have not been duly registered. In such cases there may not be a direct hazard to patients’ life and health. However, substantial loss or opportunity costs are incurred by pharmaceutical companies which abide by the law and adhere to international agreements.


    Regardless of what specific harmful consequences counterfeit medicines have, the problems they create must be widely publicized and the persons benefitting from their illegal manufacture and trading must be handled with any possible means provided by law, including through incriminating manufacture, by the competent authorities in developing and developed countries.


    But how do patented pharmaceutical manufacturers make use of the great discontent with counterfeit medicines in their propaganda campaigns against generic manufacturers?


    It is customary to accept innovative, or patented, pharmaceutical manufacturers as inventors of new pharmaceuticals who invest substantial amounts of their profit into scientific research. This myth, created and sustained by their powerful PR-agents in the previous century, is intended to divert public attention from the shamelessly large profits of corporate groups towards the socially pleasing area of research and development.


    A large number of the new molecules are in fact discovered in universities or in small, private and independent laboratories sponsored by governmental public or private foundations. Big Pharma buys these molecules, completes the research and development work with a significantly reduced risk, registers the product under their ownership, and markets it on a monopolistic price. Their work is of course crucial for the emergence of a new medicine, but the main financial risks associated with its development are in one way or another undertaken by society, not by the marketer.


    It is those financial risks and expenses which form the basis of the exaggerated claims made by “original” drug manufacturers regarding the high prices and prolonged patent protection for their medicines. Modern pharmaceutical companies constitute enormous corporate groups with overblown marketing structures financed by stock markets. No corporate group spends more than 7% of its gross income on research and development, and none spends less than 45% of its gross income on marketing and market penetration. In other words, 45% is being spent to explain to the public the innovative way in which this 7% is spent. Hard-pressed by the requirement to report results for each quarter and by the increased amount of distributed dividends, in reality Big Pharma cannot afford to make risky investments in scientific endeavors – from being inventors and manufacturers they change to being vendors.


    The generic manufacturer, on the other hand, creates and registers medicines with quality and safety equivalent to the brand pharmaceuticals. There is no difference between regulatory requirements for the two types of products, although of course the brand one is initially determined as a reference one. Moreover, generic medicines sometimes comply with higher criteria at registration, because it is done at least 20 years after the launch of the patented pharmaceutical, and accumulated scientific data and experience during this period lead to higher requirements for the product. The task of a generic manufacturer is to achieve equal quality and efficacy and bring the price of the medicine to the necessary minimum without a risk to its safety of manufacture and use. The socially valuable role of generic manufacturers is to drive down the cost of treatment of patients and thus save on personal and public resources.


    Today Big Pharma is pressed by an increase in marketing expenditure and dwindling profits as a consequence of fewer new molecules reaching the market and the “me too” products they themselves produce. To slow these tendencies, the brand manufacturers organize public campaigns to hinder the penetration of generic pharmaceuticals on the market, like the unwarranted stirring of the counterfeit medicines debate in Europe, where such debate is non-existent. All sorts of fabricated stories and perfunctory tricks are employed in attempts to extend patent and other protections, like data exclusivity of patented products, and to restrict governmental and health organizations’ influence over their prices. They aim to undermine public and medical specialists’ confidence in generic medicines. The most powerful forum covertly attending to this aim is IMPACT
    (http://www.who.int/impact/en/index.html). A number of developing countries voiced their explicit protest against the lack of distinction between counterfeit and generic medicines during the last World Health Assembly which took place in Geneva in May 2010 (see the incomplete working document WHO/ACM/1, 4 May 2010, WHO).


    Non-public attacks against the influx of generic medicines are quite bluntly featured in spoken communication between corporations and medical specialists – from the vulgar “…those are no good. They’re whipped up in some dirty basement…” to the refined “term” “generic copies”. The negative effect is accomplished by manipulating the unfavorable social attitude towards the idea of a “copy” and using it with regard to generic products. All too often companies’ “concern” with the life and health of the people lead them to compare their product against generics and illegal copies, the latter two being lumped together with only “copies” mentioned in the discussion, while the issues of price, registration and quality are completely left out.


    It is very important that we as citizens be aware that a generic product, whether it is referred to as a copy or not, is legally registered and of known quality which, if not higher, is at least equal to the brand name counterpart’s. Medical specialists are not authorized to make public assessments of the “copy’s” quality and efficacy, referring by “copy” to generics. They are only obliged to notify the Bulgarian Drug Agency (BDA) in the stipulated manner if a specific medicine is under suspicion. BDA is obligated by law to make assessments of the quality and efficacy of any medicine.


    It is also very important that we as citizens know for whom and to what purpose we spend our public and private funds. Know whether we spend enormous amounts of money to pay for marketing expenses and the multimillion-dollar bonuses of Big Pharma executives, or for the “discovery” of new molecules, which we have already paid for through public funding of scientific research and through the monopolistic prices charged throughout the 20 years’ duration of patent protection. Or whether we make regular insurance contributions for an accessible and quality treatment!