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Should India allow use of Compulsory License as a common tool to improve access to medicines?

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Compulsory License (CL) is generally considered a very important provision in the Patent Act of a country to protect public health interest not only by the governments, but also by a large number of experts across the globe and the intelligentsia within the civil society.

The key objectives:

The key objectives of the CL provisions in the statute are to:

  • Rectify any type of market failure
  • Discourage abuse of a patent in any form by the patent holder

WHO hails CL provisions:

‘The World Health Organization (WHO)’ says that ‘the provision for Compulsory Licenses (CL) is a critical element in a health-sensitive patent law’. It emphasized that CL constitutes an effective mechanism to:

-     Promote competition

-     Increase affordability of drugs, while ensuring that the patent owner obtains compensation

for the use of the invention

-     Lack or insufficiency of working of patent

-     Remedy of anti-competitive practices

-     National emergency

-     Government use for non-commercial purpose

-     Other public interest grounds

WHO also recommends the use of CL for any “abuse of patent rights”. This is primarily to ensure that drug prices remain consistent with local purchasing power.

Even ‘UNAIDS’ have recommended the use of CL, as provided under the TRIPS Agreement, where countries have the right to issue such licenses.

Views of R&D based pharma companies:

It is well known that the provisions for the grant of CL other than national emergencies have been generally opposed by the research-based pharmaceutical industry on the grounds that they discourage investments on R&D.

Despite such opposition, most developed countries have CL provisions in their law, which the respective governments can use to promote competition and access to medicines.

Provisions for CL in TRIPS Agreement:

While TRIPS agreement does not limit the grounds or reasons for granting CL, countries can only use those grounds which are allowed by their own national legislation. The development of appropriate national legislation is therefore crucial.

TRIPs further states that the conditions under which a compulsory license is granted should be regulated in accordance with the TRIPs Agreement (Article 31), under a number of conditions aimed at protecting the legitimate interests of the right holder.

Examples of CL provisions in some important countries:

China: Quite close on the heel of grant of Compulsory License (CL) to Bayer AG’s expensive Kidney and Liver cancer drug Sorafenib Tosylate to the domestic Indian manufacturer Natco by the Indian Patent Office, as provided in the Indian Patent Law, China amended its own Patent Law allowing Chinese pharmaceutical manufacturers to make cheaper generic equivalent of patented medicines in the country not only during ‘state emergencies’, but also in ‘unusual circumstances’ or ‘in the interests of the public’.

U.S: Patent law does not provide for CL, which is allowed under the antitrust law. US has been granting CL to remedy anti-competitive practices and for governmental use, including national security.

Canada:  The country introduced CL for drugs, way back in 1923. Canada has granted number of CLs and a robust generic pharmaceutical industry exists in that country.

France: French law authorizes CL when medicines are “only available to the public in insufficient quantity or quality or at abnormally high prices”.

Israel: In Israel a CL can be granted, “if it is necessary to assure the public of a reasonable quantity of a product capable of being used as a medicament, to manufacture a medicament or a patented process for manufacturing a medicament.”

Brazil:  The country will grant CL in cases of “national emergency or public interest, declared by the Federal Executive Authorities. A temporary nonexclusive compulsory license can be granted if necessary. Brazil defines Public Health interest to include “public health protection, satisfying nutritional requirements, protection of the environment and other areas of fundamental importance to the technological or social and economic development of the country.”

Very few CLs granted between 1995-2012:

Despite having the provisions for the grant of CL in many countries, not many CLs have been granted across the world from 1995 to date. The details are as follows:

Country Medicine CL granted in
Israel Hepatitis B Vaccine October 1995
Italy Imipenem (antibiotic) June 2005
Italy Sumatripan Succinate (migraine) February 2006
Canada Oseltamivir (influenza) July 2006
Brazil Efavirenz (HIV/AIDS) May 2007
Thailand Erlotinib, Docetaxel (cancer) January 2008
India Sorafenib Tosylate (cancer) March 2012

Source: DNA, March 9, 2012

India joins the league in 2012:

Indian Patent Office granted a Compulsory License (CL) for Sorafenib Tosylate (Nexavar of Bayer Corporation) to Hyderabad based Natco Pharma Limited under the provisions of Section 84 of the Indian Patents Act. Nexavar is used for treatment for liver and kidney cancer.

The Compulsory License, first of its kind granted in India, enables Natco to sell the drug at a price not exceeding Rs. 8880 (US$ 178 approx.) for a pack of 120 tablets (one month’s therapy) against Rs. 284,428 (US$ 5,690 approx.) being the cost of Nexavar sold by Bayer before the CL was granted to Natco. The license is valid till the expiry of the patent on 2021.

The order on CL also makes it obligatory for Natco to supply the drug free of cost to at least 600 needy and deserving patients per year.

The grant of CL generated adverse impact from many developed nations of the world, as was expected by many.

However, welcoming the order Natco reportedly commented, “This opens up a new avenue of availability of life savings drugs at an affordable price to the suffering masses in India.”

Does grant of CL for non-NLEM products make sense in India?

Currently all government healthcare initiatives in India are focused on ‘The National List of Essential Medicines 2011 (NLEM 2011)’, be it drug price control, free distribution of medicines to all through government hospitals/health centers or even much hyped, ‘Universal Health Coverage’ proposal.

In this situation, another school of thought says that by granting CL to Natco for Sorafenib Tosylate (Nexavar of Bayer), which does not fall under NLEM 2011, hasn’t India diluted its focus on essential drugs? More so, when NLEM 2011 features quite a good number of anti-cancer drugs, as well.

The other side of the argument: Is CL a viable solution to improve access in the developing nations?

International Policy Network (IPN) in an article titled, “Compulsory licensing no solution to health problems in poor countries – say experts from India, Argentina, Canada and South Africa” stated that patents and other forms of Intellectual Property (IP) are an essential component in economic development of any emerging economy, which needs to be well protected by the governments.

The article further opines that any form of interference with IP by the grant of CL or even price controls will undermine investments and cause more harm than good. The paper, therefore, calls for stronger protection of IP across the world.

Yet another paper  titled, “The WTO Decision on Compulsory Licensing – Does it enable import of medicines for developing countries with grave public health problems”, states that flexibility of innovator companies to adjust prices according to purchasing power of the people of different countries is constrained by the following two reasons:

  • A genuine risk that medicines sold at lower prices in the developing countries will be re-exported to high income markets.
  • Many high income developed countries also regulate the prices of medicines at the national level. There is a high risk that these countries will use prices in the developing markets as external reference pricing.

Thus, the author argues, in both the above situations, patented medicine prices will be undermined in the most important markets, making it difficult for the research-based companies to use prices only of high income countries to fund R&D costs for the discovery of new medicines.

Fostering innovation in India:

The healthcare industry in general and the pharmaceutical sector in particular have been experiencing a plethora of innovations across the world, not only to cure and effectively manage ailments to improve the quality of life, but also to help increasing overall disease-free life expectancy of the population with various types of treatment and disease management options.

Innovation being one of the key growth drivers for the knowledge economy, the creation of an innovation friendly ecosystem in India calls for a radical change in our mind-set.

From process innovation to product innovation, from replicating molecules to creating new molecules- a robust ecosystem for innovation is the wheel of progress of any nation, and India is no exception. It is encouraging to hear that the Government of India is working towards this direction in a more elaborate manner its 12th 5 year plan.

However, the question that is being raised now: will frequent grant of CL vitiate the attempt of the government to create an innovative culture within the pharmaceutical industry in India. 

CL will not arrest increasing ‘OoP’ for healthcare in India:

While India is making reasonable strides in its economic growth, the country is increasingly facing constraints in proving healthcare benefits to a vast majority of its population with ballooning ‘Out of Pocket (OoP)’ expenditure of around 78 per cent of its population.

This is mainly because of the following reasons:

  1. Absence of ‘Universal Health Coverage’
  2. Lack of proper healthcare financing and insurance system for all strata of society
  3. Difficulty in managing the cost of healthcare even when the country is providing generic drugs for a sizable part of the world market

One finds some good initiatives though, for population Below the Poverty Line (BPL) and hears about the success of ‘Rashtriya Swasthya Bima Yojna (RSBY)’ and other health insurance schemes through micro health insurance units, especially in rural areas. It has been reported that currently around 40 such schemes are active in the country.

As the disease pattern is undergoing a shift from acute to chronic non-infectious diseases, OOP on healthcare will increase further.

Currently health insurance schemes only cover expenses towards hospitalization. Ideally, medical insurance schemes in India should also cover domiciliary or in-patient treatment costs and perhaps loss of income too, along with hospitalization costs, if India wants to bring down the OoP for its population or at least till such time the ambitious ‘Universal Health Coverage’ project gets translated into reality.

Greater focus of the Government in these areas, many believe, will help increasing access to essential medicines very significantly in India, rather than frequently granting CL, as is being envisaged by many, especially for drugs, which are outside NLEM 2011.

Access to patented medicines unlikely to be addressed effectively despite frequent grant of CL: 

As we know, access to healthcare comprises not just medicines but more importantly healthcare infrastructure like, doctors, paramedics, diagnostics, healthcare centers and hospitals . In India the demand for these services has outstripped supply. There is a huge short fall in ‘Healthcare Manpower’ of the country as demonstrated in the following table:

Target

Actual

Shortfall %
Doctors

1,09,484

26,329

76
Specialists

58,352

6,935

88
Nurses

1,38,623

65,344

53
Radiographers

14,588

2,221

85
Lab Technicians

80,308

16,208

80

Source: Rural Health Statistics 2011 in 12th Plan draft chapter

Thus, there is an urgent need to have a holistic approach with the ‘Universal Healthcare’ in developing adequate healthcare infrastructure, efficient delivery system for medical supplies and creation of a talent pool of healthcare professionals and paramedics, to ensure access to healthcare for all the citizens of the country.

Without all these how will the diseases be diagnosed and the patients be treated for ailments, frequent grant of  CL not withstanding? 

Conclusion:

Be that as it may, the prices of medicines in general and the patented drugs in particular will continue to remain highly sensitive in most parts of the world, if not all, which some astute Global CEOs of the pharmaceutical majors have already contemplated.

One of these Global CEOs very aptly commented, “Pharmaceutical industry, too, on its part, needs to metamorphose to strike a balance in delivering affordable and innovative medicines. It is unacceptable to hear of the US$1billion cost to develop a drug, which includes the cost of failure. We need to fail less often and succeed more often.”

He reiterated, “Pharma companies need to understand that just because you have a patent, people don’t suddenly have money in their pockets, or can afford American prices.”

In the same context another Global CEO said, “Our strategy is really to have affordable medicines because in emerging markets you do not have government reimbursement. So you have to have medicines that people can afford to pay for.…I do not want us to be a colonial company with a colonial approach where we say we decide on the strategy and pricing. If you have to compete locally then the pricing strategy cannot be decided in Paris but will have to be in the marketplace. People here will decide on the pricing strategy and we have to develop a range of products for it.”

Keeping all these developments in view, as I said before, the contentious issue of the price of medicines cannot just be wished away across the world, which is perhaps more relevant now than ever before.

This is irrespective of the fact whether the country provides likes of ‘Universal Health Coverage’ or is driven by OoP expenditure by the majority of its population. Gone are those days, as articulated by the above Global CEOs, when a single global price for a product will be acceptable by all the nations across the world. India seems to be moving to this direction cautiously but steadily. 

It appears, responsible pricing and effective working of patents are the only answers to respond to the CL issue in India.

Thus, I reckon, it does make sense for India to have the relevant provisions of CL in its Patent Act, not just to rectify any type of market failure, but also to discourage any possible abuse of a patent in any form by the patent holder in the country, as mentioned above.

However, it is also important for India to examine the potential negative impact of CL to foster innovation in the country and the global ramification of the same, including attraction of more ‘Foreign Direct Investments (FDI)’, which has been universally proved to be so important for the economic progress of any country, like India and China.

That said, while none can deny that all citizens of India should have access to affordable life-saving essential medicines, it appears rather impractical to envisage that routine grant of CL by the Indian Patent Office, as enumerated above by Natco et al, will be able to resolve the critical issue of improving access to essential medicines on a longer term basis in India.The decision for grant of CL, I reckon, should be taken in India only after exhausting all other access improvement measures.

As enumerated above, the use of CL as a common tool to improve access to medicines could prove to be counterproductive in the long run for India.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

The ruckus over Clinical Trials in India compels Government tightening regulations before flooring gas pedal for regional leadership

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The subject of Clinical Trials in India has created a huge ruckus, mainly for wide spread alleged malpractices, abuse and misuse of the fragile regulations of the country by the players in this field. The issue is not just of GCP or other clinical trial related standards but more of ethical mind-set and reported rampant exploitation of uninformed patients even in case of trial related injuries or death.

The Bulletin of the World Health Organization (WHO) in an article titled, “Clinical trials in India: ethical concerns” reported as follows:

“Drug companies are drawn to India for several reasons, including a technically competent workforce, patient availability, low costs and a friendly drug-control system. While good news for India’s economy, the booming clinical trial industry is raising concerns because of a lack of regulation of private trials and the uneven application of requirements for informed consent and proper ethics review.”

Damning report of the Parliamentary Standing Committee:

Recently the Department Related ‘Parliamentary Standing Committee (PSC)’ on Health and Family Welfare presented its 59th Report of 118 pages in total on the functioning of the Indian Drug Regulator – the Central Drugs Standard Control Organization (CDSCO) in both the houses of the Parliament on May 08, 2012.

The report begins with the following observations:

Medicines apart from their critical role in alleviating human suffering and saving lives have very sensitive and typical dimensions for a variety of reasons. They are the only commodity for which the consumers have neither a role to play nor are they able to make any informed choices except to buy and consume whatever is prescribed or dispensed to them because of the following reasons:

  • Drug regulators decide which medicines can be marketed
  • Pharmaceutical companies either produce or import drugs that they can profitably sell
  • Doctors decide which drugs and brands to prescribe
  • Consumers are totally dependent on and at the mercy of external entities to protect their interests.

In this prevailing condition, the committee felt that effective and transparent drug regulation, free from all commercial influences, is absolutely essential to ensure safety, efficacy and quality of drugs keeping just one objective in mind, i.e., welfare of patients.

Some critical findings on the Drug Approval Process:

The PSC in its report made, the following critical findings, besides others:

  • “A total of 31 new drugs were approved in the period January 2008 to October 2010 without conducting clinical trials on Indian patients.
  • Thirteen drugs scrutinized by the panel are not allowed to be sold in the United States, Canada, Britain, European Union and Australia.
  • Sufficient evidence is available on record to conclude that there is collusive nexus between drug manufacturers, some functionaries of CDSCO and some medical experts.
  • Due to the sensitive nature of clinical trials in which foreign companies are involved in a big way and a wide spectrum of ethical issues and legal angles, different aspects of clinical trials need a thorough and in-depth review.”

Proper Auditing of Clinical Trials are lacking:

It is sad that that adequate focus on the ‘Clinical Trial Registry’ and even ‘Auditing of Clinical Trials’ is currently lacking in India, which are considered so important not only to maintain the credibility of the studies, but also to demonstrate their scientific integrity and ethical values.

Unfortunately, there seems to be many loose knots in the current clinical trial policy, practices and guidelines in the country, which require to be tightened by the Government to make the system efficient and transparent in the national endeavor of establishing India as one of the most favored destinations for global clinical trials.

Health Ministry recently responded:

Facing this stark reality and pressured by the Parliament, the government has recently demonstrated its intention of tightening the loose knots in the following two critical areas:

  1. Permission to conduct Clinical Trial
  2. Compensation of the Clinical Trial victims

A. “Permission to conduct Clinical Trial in India’ – the draft notification:

In response to the prevailing conundrum, ‘The Ministry of Health and Family Welfare’ of the Government of India issued a draft notification on 17th July, 2012 seeking stakeholders’ views on the ‘Permission to conduct Clinical Trial’.

The draft notification says that the licensing authority after being satisfied with the adequacy of the data submitted by the applicant in support of proposed clinical trial, shall issue permission to conduct clinical trial, subject to the following conditions:

  1. Clinical trial shall be conducted in compliance to the approved GCP Guidelines.
  2. Approval of the ‘Ethics Committee’ shall be obtained before initiation of the study.
  3. Ethical aspects of the clinical trial as described in the “Ethical Guidelines for Biomedical Research on Human Participants” published by the Indian Council of Medical Research (ICMR), shall be fully complied with.
  4. Clinical trial shall be registered at Clinical Trials Registry of India (CTRI) before enrolling the first patient in the study.
  5. Annual status report on clinical trial viz. ongoing or completed to be communicated to the said Licensing Authority.
  6. Any ‘Suspected Unexpected Serious Adverse Reaction (SUSAR)’ occurring during clinical trial shall be communicated within fourteen calendar days to the Licensing Authority and to the other investigator(s) participating in the study.
  7. In case of study related injury or death, the applicant will provide complete medical care, as well as, compensation for the injury or death and statement to this effect shall be incorporated in the Informed Consent Document. The details of compensation provided shall also be intimated to the licensing authority.
  8. The premises of sponsor/Clinical Research Organization (CRO) and clinical trial sites shall be open to inspection by the officer of Central Drugs Standard Control Organization (CDSCO), who may be accompanied by an officer of the concerned ‘State Drug Control Authority’ to verify compliance to the requirements of Schedule Y, GCP guidelines and other applicable regulation.
  9. The sponsor/ CRO, investigators shall allow officers of CDSCO who may be accompanied by an officer of the concerned ‘State Drug Control Authority’, to enter with or without prior notice, any premises of sponsor/ CRO, clinical trial site to inspect, search and seize any record, data, document, books, investigational drugs etc. related to clinical trials and provide adequate replies to any queries raised by the inspecting authority in relation to the conduct of clinical trial.

This area of the clinical trial regulations will be finalized after taking into consideration of all the comments received from the stakeholders within the specified period.

B. ‘Compensation of the Clinical Trial victims’:

To address the pressing issues in this area Central Drugs Control Organization (CDSCO) in August 3, 2012, published an interim “GUIDELINES FOR DETERMINING QUANTUM OF FINANCIAL COMPENSATION TO BE PAID IN CASE OF CLINICAL TRIAL RELATED INJURY OR DEATH”

The document articulates as follows:

“Presently there is no specific provision under Drugs and Cosmetics Rules for payment of compensation in case of clinical trial related injury or death of the subject. However, the Good Clinical Practice (GCP) Guidelines for Clinical Trials of India under para 2.4.7 provides that the research subject who suffers physical injury as a result of their participation in clinical trials are entitled to financial or other assistance to compensate them equitably for any temporary or permanent impairment or disability subject to confirmation from Ethics Committee. In case of death, their dependents are entitled to material compensation. Guidelines further provide that it is the obligation of the sponsor to pay the compensation.”

Such concerns were also raised in the Parliament and other forums regarding payment of compensation in the cases of injury or death, related to clinical trials.

CDSCO’s interim guidelines now prescribe an interesting formula, which will be used to arrive at the financial compensation for all clinical trial related injuries and deaths.

To assess right compensation for clinical trial related injuries or deaths following parameters have been mooted in the document:

  • Age of the deceased
  • Income of the deceased
  • Seriousness and severity of the disease, the subject was suffering at the time of his/her participation into the trial.
  • Percentage of permanent disability.

Prior to the above new interim guidelines of the CDSCO, there was no standardization for the financial compensation either for clinical trial injuries or for that matter even death. In the past, such compensation was expected to be decided by the ‘Ethics Committee’ on case to case basis.

As stated above, the above formula has been indicated to be an interim measure before the final notification comes into force after taking into consideration all stakeholders’ comments and suggestions on this very important subject.

Drawing a comparison with China:

Driven by the stellar economic growth together with its booming pharmaceutical industry have enabled China to position itself as an emerging hub for global clinical trials. Following are some examples of the key growth drivers in the clinical research space of China:

  • A large diverse treatment naive patient population
  • Significant cost arbitrage
  • Recent improvements in the regulatory standards
  • Reverse brain drain of Chinese-born scientists educated in the west
  • Changing disease profile
  • Incentives to conduct clinical research in the country

However, linguistic and cultural barriers that affect patient reporting, enrollment and other medical practices in China could work as major barriers to the growth of Chinese clinical trial sector.

Clinical Trials: A ‘China – India’ comparison

It has already been reported  that India is ahead of China as most favored destination for global clinical trials, although the latter is quite close and breathing on the neck of India and could well even zoom past the former, if appropriate robust regulations and their effective implementation are still not ensured in India.

I. Majority of the Top 10 Pharma Companies conduct higher number of trials in India

Sr. No. Company

Clinical Trials in India

 Clinical Trials in China
1

Astra Zeneca

10

10
2

BMS

17

6
3

Eli Lilly

17

12
4

GSK

22

14
5

J&J

20

13
6

Merck

8

5
7

Novartis

9

6
8

Pfizer

16

5
9

Roche

5

14
10

Sanofi

15

13

Total

139

98

(Source: clinicaltrials.gov, 26 Oct 2007)

II. India leads China and Russia in Cardiology and Diabetes trials

Therapy India (%) China (%) Russia (%)
Cardiology 5.38 4.93 4.48
Diabetes 3.05 2.09 2.65
Neurology 0.90 0.90 3.62
Oncology 1.59 1.01 2.32

With the highest number of diabetic patients in the World and a very large population of patients with cardiovascular disorders, India has the potential to be the destination of choice for clinical trials in these two therapy areas, as we move on.

(Source: clinicaltrials.gov, 26 Oct 2007)

III. India has a greater % of phase II and III trials while China has more of Phase I and IV

Clinical Trials in India

Clinical Trials in China
Phase I

4%

 Phase I

7%
Phase II

16%

 Phase II

9%
Phase III

65%

 Phase II

51%
Phase IV

15%

 Phase IV

33%

(Source: clinicaltrials.gov, 26 Oct 2007)

IV. Of the total Industry sponsored trials only 3.5% are carried out in India and 2.63% in China

Company

Global Trials

India + China

Astra

231

20

BMS

148

23

Eli Lilly

238

29

GSK

347

36

J&J

461

33

Merck

213

13

Novartis

440

15

Pfizer

389

21

Roche

302

19

Sanofi

209

28

Total

2978

237

 

India 3.50%
China 2.63%
Global 93.87%

India and China’s share in the Industry sponsored Global clinical trial market is miniscule

Source: clinicaltrials.gov

Overall increasing trend of Clinical Trials Initiated in India:

The following table will substantiate the above point:

Year

No. Of Clinical Trials

1999

1

2000

0

2001

6

2002

6

2003

11

2004

26

2005

141

2006

206

2007

220

2008

295

2009

189

(Source: U.S. NIH, Pharmexcil Research)

India has the potential to accelerate its pace of growth significantly:

If robust regulatory measures are put in place, addressing serious concerns on the inadequacy of clinical trial regulations in India, together with uniform requirements for informed patients’ consent and appropriate ethics review, global pharmaceutical majors can be easily attracted to India for several reasons like:

  1. Technically competent and English speaking workforce,
  2. Patient availability and huge pool of naive patients
  3. Low costs and an improving drug-control system.

Thus, quite a number of criteria, as stated above, favor India to establish itself as a global hub for clinical research. Besides, availability of a number of government-funded medical and pharmaceutical institutions with state-of-the-art facilities could be very useful for mufti-centered clinical trials in the country.

Moreover, the cost to conduct a trial in India is lower by almost 50% – 75% than in the United States or in the EU. In addition, a good communication link favors quick recruitment of patients and faster regulatory approvals. Thus, clinical trials in India could be concluded faster, offering a sharp cutting edge for effective competition.

Due to all these reasons, India is gradually attracting more collaborative contract clinical research proposals in the country. Even many global Clinical Research Organizations (CRO) have already started establishing their set up in India. This pace can be accelerated significantly with the regulatory measures, as stated above.

Conclusion:

Clinical trials are the core of research-based pharmaceutical industry. No new drug can come into the market without clinical trials, which involve both potential benefits and risks to the participants. All clinical trials are conducted with the primary aim of bringing to patients new medicines with a favorable benefit–risk ratio.

Global clinical trials being relatively new to India, no wonder there are several misconceptions on the subject. The companies conducting research need to proactively publicize their commitment to protecting the rights, safety and well-being of trial participants.

All concerned must ensure that the proposals for clinical trials are approved by the government regulatory authorities before commencement and the trials must strictly follow the prescribed norms and procedures. For Phase I-IV human trials, the rights and privileges of the participants must be explained and the trials should commence only after their informed consent. The regulatory authorities, at the same time, should also ensure that any attempt of shortcuts or to bend the system by any means is met with severe consequences.

Although the Ministry of Health has already started initiating some action, as stated above, there is an urgent need for the players in this field to reassure the public, in general, about the high ethical standards that the pharmaceutical companies and Clinical Research Organizations require to comply with and continuously practice, while conducting clinical research.

It is therefore, high time for the Government to tighten the loose knots of the Clinical Trial regulations in the country before flooring the gas pedal to help India surging ahead as a major hub in the clinical trials space of the world, significantly distancing itself from China.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Counterfeit Drugs and ACTA: Should the global menace related to ‘Public Health and Safety’ be mixed-up with Intellectual Property Rights?

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Here in this article, I am talking about drugs or medicines, which you may ultimately land up into buying, quite innocently though, against your doctor’s prescriptions, without having an inkling that these drugs can push you into serious health hazards, instead of addressing your ailments, as your doctor would have desired to.

These are ‘Counterfeit’, ‘Fake’, ‘Spurious’ or ‘Sub-standard’ drugs, in whatever name we may call them. Such substances in the guise of drugs are therapeutically harmful for the patients and are a global menace. This needs to be addressed urgently and with a military precision.

However, public health policy experts have been arguing since long that the issues of such dimension related to critical ‘Public Health and Safety’ needs to be addressed expeditiously by all concerned with focus, without mixing it up with any other commercial considerations or IP related matter, as is being done by some vested interests across the world. India, in this case as well, is of course no exception.

Some reports:

Following are examples of some reports regarding deliberations on this critical issue:

  • A new study published recently in ‘The Lancet’ reported that 7% of anti-malarial drugs tested in India are of poor quality and many were found fake.
  • A February, 2012 report of ‘The National Initiative against Piracy and Counterfeiting’ of FICCI highlighted that the share of fake/counterfeit medicines is estimated at 15% – 20% of the total Indian pharmaceutical market.
  • Another recent report of the US Customs and Border Protection highlighted, “India and Pakistan both made it to top 10 source countries this year due to seizures of counterfeit pharmaceuticals. Pharma seizures accounted for 86% of the value of IPR seizures from India and 85% of the value of IPR seizures from Pakistan.”

However, in this context, it is worth mentioning that the Indian Pharmaceutical Industry along with the Government has been continuously questioning the original source of fake drugs with prominent ‘made in India labels’ on the outer packaging material. It will not be difficult for many to recall that a couple of years ago consignments of ‘counterfeit or fake drugs’ wearing ‘made in India’ labels were confiscated by the drug regulator of Nigeria (Africa), which after a thorough investigation were found to have originated from China.

A contrarian report – CDSCO Survey:

Central Drugs Standard Control Organization (CDSCO) of the Government of India released the following details on ‘Counterfeit Drugs’ in India from 2006 to 2010, which shows that the issue is not as acute as it is shown above:

Year Drugs samples tested % of sub-standard drugs % of spurious drugs Prosecution for crime Persons arrested
2006 – 07

34738

5.8

0.22

115

12
2007 – 08

39117

6.2

0.19

120

122
2008 – 09

45145

5.7

0.34

220

133
2009 -10

39248

4.95

0.29

138

147

TOTAL

158248

5.66

0.26

593

414

This ‘Pan-India survey report of CDSCO’ shows that from 2006 to 2010 the percentage of both ‘Substandard’ and ‘Spurious’ drugs were quite low in India.

However, the more worrying fact, as seen in the report is, the arrests and prosecutions for this heinous crime are also abysmally low in India.

IP related ‘counterfeit’ drugs are relatively smaller in numbers: 

WHO has identified following types of counterfeit medicines:
• Without active ingredients: 32% • Wrong ingredients: 21.4% • Incorrect quantities of active ingredients: 20.2% • Right quantities of active ingredients but in fake packaging: 15.6% • High levels of impurities and contaminants: 8.5% • “Substituted ingredients of anything from paracetamol to boric acid, talcum powder, rat    poison or road paint”: 2.3%

In addition, 50% of medicines purchased online from illegal internet are ‘counterfeit or fake’

From the above data, it appears that IP related ‘counterfeit or fake’ drugs are relatively small in number.

‘Anti-Counterfeiting Trade Agreement (ACTA)’:

The subject gets more complicated when such critical ‘Public Health and Safety’ related issue is leveraged to further strengthen Intellectual Property Rights (IPR) and address commercial issues in different ways.

One such initiative was ‘Anti-Counterfeiting Trade Agreement (ACTA)’. This was signed mostly by the developed countries of the world in October 2011.

ACTA is a plurilateral international trade agreement aimed at countering more efficiently not only the menace of counterfeit goods, generic medicines and copyright infringement on the internet, but also Intellectual Property (IP) related issues, including stringent enforcement of product patents.

This agreement was primarily designed to form a new forum, outside the existing ones, like for example United Nations (UN), World Trade Organization (WTO) or the World Intellectual Property Organization (WIPO) and was signed by Australia, Canada, European Union, Japan, Morocco, New Zealand, Singapore, South Korea, and the United States. However, the agreement has not been formally approved by any of them, as yet.

According to European Commission, “ACTA is an international trade agreement that will help countries work together to tackle more effectively large-scale IPR violations. Citizens will benefit from ACTA because it will help protect Europe’s raw material – innovations and ideas.”

Two aspects of ACTA definition:

As per ACTA definition, there are two aspects for a medicine being termed as ‘Counterfeit’, which are as follows:

  1. ‘Health and safety’ issues, arising out of therapeutically harmful medicines
  2. Violation of IP rights like, patents, trademark and design

It raises more questions than answers:

ACTA definition, as mentioned above, has led to confusion mainly because, if a patent infringing product is termed ‘counterfeit or fake’ in one country, what will then the same product be called in another country where the molecule has gone off-patent? 

Moreover, countries which consider such types of drugs ‘fake’ or ‘counterfeit’, will have the full right to destroy even the in-transit consignments containing such products, not only causing economic loss to the exporter, but also jeopardizing public health interest at the destination countries. Just to site an example, in not too distant past, consignments of generic medicines exported from India to Brazil were seized at the European ports

Thus, many experts feel that ACTA poses a potential risk for global access to generic medicines endangering public health interest, as it could restrict free passage of such drugs through many ports of the world on IP grounds, as happened more than once in the past.

‘Generic medicines’ to be left unharmed:

In this context, Ellen‘t Hoen, former Policy Advocacy Director of MSF’s Campaign for ‘Access to Essential Medicines’ wrote in April 2009 as follows:

“People often seem to confuse counterfeit, substandard and generic medicines – using the terms interchangeably. But they are very separate issues and clearly defining their differences is critical to any discussion”.

Ongoing WHO debate: 

‘Intellectual Property Watch’ in May 20, 2010 reported that:

“Brazil and India claimed that WHO’s work against counterfeit and substandard medicines is being influenced by brand-name drug producers with an interest in undermining legitimate generic competition. The Brazilian ambassador told ‘Intellectual Property Watch’ there is a ‘hidden agenda’ against generics for countries like Brazil.”

“India and Brazil filed requests for consultations with the European Union and the Netherlands over the seizure of generic medicines in transit through Europe. This is the first step towards a dispute settlement case, and if issues cannot be resolved via consultations then formation of a dispute settlement panel could be requested in the coming months”.

However, as reported by ‘The International Center for Trade and Sustainable Development (ICTSD)’, after the Government of India had taken it up strongly with the EU, the issue of confiscation of in-transit consignments of generic drugs has since been resolved.

Three emerging views:

Arising out of all these, there are following three different clearly emerging views on the global issue of counterfeit drugs:

1. The innovator companies feel that the generic pharmaceutical industry and the drug regulators of the developing countries are not really very keen to effectively address and resolve the global issue of ‘Counterfeit Drugs’.
2. The generic companies and the drug regulators of the developing countries feel that the problem is not as acute as it is being projected to be and the innovator global pharmaceutical companies through their intense advocacy campaigns are trying to exploit the sentiment against spurious and harmful drugs to fight against generic medicines and cheaper parallel imports.
3. Some other important stakeholders, including a section of NGOs claim that an intense ‘Public Health and Safety’ related sentiment is being leveraged by the R&D based global pharmaceutical companies to extend IPR issues to “patients’ safety” related concerns, for vested interest.

The role of WHO:

The leadership role of the WHO is extremely important to effectively eliminate the global menace of ‘Counterfeit Drugs’ for ‘Public Health and Safety’. Across the world, patients need protection from the growing threat of ‘Counterfeit Medicines’. As a premier global organization to address such critical issues effectively, especially for the developing world, the WHO needs to play a more proactive and stellar role in future.

A Rational Approach:

The groups opposing ACTA recommend the following approaches to address the menace of ‘Counterfeit or Fake or Spurious or Harmful Medicines’:

  1. Address the issue of ‘Public Health and Safety’ by strengthening regulatory systems, related laws of the country and the stakeholder awareness program. In case of India, recently amended Drugs and Cosmetics Act needs to be properly implemented in letter and spirit.
  2. The issue of violation of IP should be dealt with through effective enforcement of IP laws of the country.
  3. There should not be any mix-up between ‘Public Health and Safety’ and ‘IP related issues’, in any way or form.

Countries already approached WHO:

Earlier, along with countries like Indonesia and Thailand, India could make the WHO realize that mixing up the above two issues could pose serious impediment for the supply of cheaper generic medicines to the marginalized sections of the society, globally. 

Weak regulatory enforcement lead to more ‘Counterfeit/Fake’ drugs:

The menace of counterfeit medicines is not restricted to the developing countries like, India alone. It is seen in the developed countries, as well, but at a much smaller scale. Thus, it is generally believed that the issue of ‘counterfeit drugs’ is more common in those countries, where the regulatory enforcement mechanism is rather weak.

A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand, the problem is less than 1%. On the other hand, ‘in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits’.

Conclusion:

In the meeting of the TRIPS Council of the World Trade Organization (WTO) held in June, 2012, developed countries continued to reiterate that ‘Counterfeiting of Drugs’ being a critical issue should be deliberated upon by the council, expeditiously.

However, emerging countries like, Brazil, India and China strongly opposed this view by reemphasizing that in the name of ‘Counterfeit Drugs’ issues of IPR violations should not be clubbed with ‘Public Health and Safety’. They argued that IPR violation should in no way be confused with sub-standard drugs or therapeutically harmful medicines and any attempt to discuss the menace of harmful or substandard medicines at the WTO platform will be improper.

Developing nations, in general, have already alleged in various global forums that being unsuccessful in their efforts to use ACTA in making the IP environment even more stringent, the developed countries are now trying to use the WTO to achieve the same objective.

The debate continues and the moot question still lingers: Why should the issue of ‘Public Health and Safety’ get mixed-up with ‘Intellectual Property (IP)’ related problems?

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

The issue of ‘Counterfeit Drugs’ in India: An “Ostrich Syndrome’

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Ellen‘t Hoen, former Policy Advocacy Director of MSF’s Campaign for Access to Essential Medicines wrote in April 2009 as follows:

“People often seem to confuse counterfeit, substandard and generic medicines – using the terms interchangeably. But they are very separate issues and clearly defining their differences is critical to any discussion”.

In November 7, 2009, Financial Express reported with a headline, “Generic drug companies see a bitter pill in counterfeit“, because some believe that it has an in-built intellectual property right connotation.
The WHO debate:

‘Intellectual property Watch’ in May 20, 2010 reported as follows:

“Brazil and India claimed that WHO’s work against counterfeit and substandard medicines is being influenced by brand-name drug producers with an interest in undermining legitimate generic competition. The Brazilian ambassador told Intellectual Property Watch there is a “hidden agenda” against generics from countries like Brazil.

“India and Brazil filed requests for consultations with the European Union and the Netherlands over the seizure of generics medicines in transit through Europe. This is the first step towards a dispute settlement case, and if issues cannot be resolved via consultations then formation of a dispute settlement panel could be requested in the coming months”.

In response to such allegations the International Federation on Pharmaceutical Manufacturers and Associations (IFPMA) released a document titled, “ten principles on counterfeit medicines” and categorically stated that “patents have nothing to do with counterfeiting and counterfeiting has nothing to do with patents.”

In this seemingly volatile scenario, the key point to understand is the definition of a ‘Counterfeit Drug’.

The dictionary definition:
The word ‘Counterfeit’ may be defined as follows:
1. To make a copy of, usually with the intent to defraud
2. To carry on a deception or dissemble
4. To make fraudulent copies of something valuable
5. A fraudulent imitation.
What does the Indian Drugs and Cosmetics Act say?
Presumably in the spirit of the above definition, the Drugs and cosmetics Act (D&CA) of India has specified that manufacturing or selling of the following types of drugs are punishable offence:
Section 17: Misbranded drugs
Section 17-A: Adulterated drugs
Section 17-B: Spurious drugs
The question therefore arises, as misbranding could involve trademark and design, why does it fall under D&CA?
This was done in the past by the law makers, as they believed that any attempt to deliberately and fraudulently pass off any drug as something, which it really is not, could create a serious public health issue, leading to even loss of lives.
Be that as it may, the pharmaceutical industry all over the world sincerely believes that counterfeit drugs involve heinous crime against humanity.

Another argument:

Some voices in India have also expressed that ‘Counterfeit Drugs’ are a Health issue. Why are we then mixing up non-health IPR issues like trademarks and designs along with it?

Should the definition of ‘Counterfeit Drugs’ cover all types of medicines, which are not genuine?

Definition of counterfeit drugs should, therefore, cover the entire gamut of medicines, which are not genuine. Such medicines could be a fraudulent version of patented, generic or even traditional medicines and have nothing to do with patents or patent infringements.
At the same time it sounds very reasonable that a medicine that is authorized for marketing by the regulatory authority of one country but not by another country should not be regarded as counterfeit on this particular ground in any country, unless it has been made available fraudulently. It will be absolutely improper for anyone to term generic drugs as counterfeits, in the same way.

The magnitude of the problem:

International Medical Products Anti-Counterfeiting Task Force (IMPACT) reported in 2006 as follows:

“Indian pharmaceutical companies have suggested that in India’s major cities, one in five strips of medicines sold is a fake. They claim a loss in revenue of between 4% and 5% annually. The industry also estimates that spurious drugs have grown from 10% to 20% of the total market.”

CDSCO surveys on ‘Spurious’ and ‘Sub-standard’ drugs in India:

Central Drugs Standard Control Organization (CDSCO) of the Government of India has released the following details on ‘Counterfeit Drugs’ in India from 2006 to 2010.

Year Drugs samples tested % of sub-standard drugs % of spurious drugs Prosecution for crime Persons arrested
2006 – 07

34738

5.8

0.22

115

12
2007 – 08

39117

6.2

0.19

120

122
2008 – 09

45145

5.7

0.34

220

133
2009 -10

39248

4.95

0.29

138

147

TOTAL

158248

5.66

0.26

593

414

It is indeed very surprising to note from the above CDSCO report that from 2006 to 2010 the number of both arrests and prosecutions for this heinous crime in India is abysmally low.

To assess the magnitude of the menace of counterfeit drugs, Financial Express dated November 12, 2009 reported that much hyped “world’s largest study on counterfeit drugs” conducted by the Ministry of Health of the Government of India with the help of the Drug Controller General of India’s office, has come to the following two key conclusions:
1. Only 0.046% of the drugs in the Indian market were spurious
2. Only 0.1% of drugs are of sub-standard quality in India

Is there really nothing to worry about?

From these reports, it appears that India, at this stage, has nothing to worry about this public health hazard!

It is indeed equally baffling to understand, why did the government keep ‘misbranded drugs’, as specified in the Drugs and Cosmetics Act of India, outside the purview of this study.
In my opinion, the above recent survey has raised more questions than what it had attempted to answer. Such questions are expected to be raised not only by the pharmaceutical industry of India, its stakeholders and the civil society at large, but by the international community, also.
The problem of ‘Counterfeit Drugs’ is more prevalent in countries where regulatory enforcement is weak:
The menace of counterfeit medicines is not restricted to the developing countries like, India. It is seen in the developed countries, as well, but at a much smaller scale. Thus it is generally believed that the issue of counterfeit drugs is more common in those countries, where the regulatory enforcement mechanism is weak.
A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand, the problem is less than 1%. On the other hand, in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits.
The role of ‘The World health Organization (WHO)’:
To effectively eliminate this global menace, the leadership role of the WHO is extremely important. Across the world, patients need protection from the growing menace of ‘Counterfeit Medicines’. As a premier organization to address the needs of the global public health issues and especially for the developing world, the WHO needs to play a key and much more proactive role in this matter.

Conclusion:
All stakeholders of the pharmaceutical industry must be made aware, on a continuous basis, of the health hazards posed by counterfeit medicines in India. Authorities and organizations like the Drug Controller General of India (DCGI) and its regulatory and enforcement agencies, healthcare professionals, patients, all pharmaceutical manufacturers, drug distributors, wholesalers and retailers should collaborate to play a very active and meaningful role in curbing the counterfeit drugs from reaching the innocent patients.

Instead of all these, as we witness today, the country keeps on demonstrating an ‘Ostrich Syndrome’, shouting from the roof top, as it were, that no health hazards due to prevalence of ‘Counterfeit Drugs’ exist in India.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion

To prevent ‘counterfeit medicines’ from reaching the patients is the nation’s public health responsibility: Are we still in a denial mode to even accept the existence of this public health menace?

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In November 7, 2009, Financial Express reported with a headline,”Generic drug companies see a bitter pill in counterfeit“, because some believe that it has an in-built intellectual property right connotation.
The dictionary definition:

The word ‘counterfeit’ may be defined as follows:

1. To make a copy of, usually with the intent to defraud

2. To carry on a deception; dissemble

4. To make fraudulent copies of something valuable

5. A fraudulent imitation.

What does Indian Drugs and Cosmetics Act say?

May be for this reason the Drugs and cosmetics Act of India has specified that manufacturing or selling of the following types of drugs are punishable offence:

Section 17: Misbranded drugs

Section 17-A: Adulterated drugs

Section 17-B: Spurious drugs

No one has asked, so far, that as misbranding could involve trademark and design, why should it fall under Drugs and Cosmetics Act?

This was done in the past by the law makers because they believed that any attempt to deliberately and fraudulently pass off any drug as something, which it really is not, could create a serious public health issue, leading to even death.

Be that as it may, the pharmaceutical industry all over the world sincerely believes that counterfeit drugs involve heinous crime against humanity.

Definition of counterfeit drugs should cover the all types of medicines, which are not genuine:

Definition of counterfeit drugs should, therefore, cover the entire gamut of medicines, which are not genuine. Such medicines could be a fraudulent version of patented, generic or even traditional medicines and have nothing to do with patents or patent infringements.

At the same time it sounds very reasonable that a medicine that is authorized for marketing by the regulatory authority of one country but not by another country, should not be regarded as counterfeit on this particular ground in the other country, if it is not made available fraudulently.

The recent survey on ‘spurious’ and ‘sub-standard’ drugs by the Government of India:

To assess the magnitude of the menace of counterfeit drugs, Financial Express dated November 12, 2009 reported that much hyped “world’s largest study on counterfeit drugs” conducted by the Ministry of Health of the Government of India with the help of the Drug Controller General of India’s office, has come to the following two key conclusions:

1. Only 0.0046% of the drugs in the market were spurious

2. Quantum of sub-standard drugs in India is just 0.001%

From this report, it appears that India, at this stage, has nothing to worry about this public health hazard!!!
It is indeed quite baffling to understand, why did the government keep ‘misbranded drugs’, as specified in the Drugs and Cosmetics Act of India, outside the purview of this study.

Be that as it may, it appears that this survey has raised more questions than what it had attempted to answer. Such questions are expected to be raised not only by the pharmaceutical industry of India, its stakeholders and the civil society at large, but by the global experts, as well.

The problem of counterfeit is more prevalent in countries where regulatory enforcement is weak:

The menace of counterfeit medicines is not restricted to the developing countries like, India. It is seen in the developed countries, as well, but at a much smaller scale. Thus it is generally believed that the issue of counterfeit drugs is more common in those countries, where the regulatory enforcement mechanism is weak.

A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand, the problem is less than 1%. On the other hand, in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits.

The role of ‘The World health Organization (WHO):

To effectively root out this global menace, the leadership role of the WHO is extremely important. Across the world, patients’ need protection from the growing menace of counterfeit medicines. As a premier organization to address the needs of the global public health issues and especially for the developing world, the WHO needs to play a key and much more proactive role in this matter.

Conclusion:

All stakeholders of the pharmaceutical industry must be made aware more effectively, without further delay, of the health threats posed by counterfeit medicines. Authorities and organizations like the Drug Controller General of India (DCGI) and its regulatory and enforcement agencies, healthcare professionals, patients, all pharmaceutical manufacturers, drug distributors, wholesalers and retailers should collaborate to play a very active and meaningful role in curbing the counterfeit drugs from reaching the innocent patients.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion

Concerted action by all stakeholders on counterfeit medicines is the need of the hour.

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The concern of some section of the stakeholders that IPR is being extended to the definition of counterfeit medicines, in my view, is misplaced. As even in India, ‘misbranding’ though an integral part of IPR, is considered as a public health issue and is an offence under Section 17 of the Drugs and Cosmetics Acts, 1940.Currently, the magnitude of this problem is anybody’s guess. Earlier a study sponsored by the World Health Organization (WHO) and conducted by SEARPharm reported that only 0.3% drugs were spurious and 3% of drugs were counterfeits. To scientifically assess the magnitude of this problem the Drugs Controller General of India (DCGI) India, for the first time ever, has initiated a study with 61 popular brands from nine therapeutic categories for testing 24000 samples. The study is expected to cost Rs.50 million and is expected to be published, soon.However, on the above study, Pharmabiz dated August 26, 2009 has reported the following:

“The Union Health Ministry’s ambitious nationwide survey to get an authentic estimate of spurious drugs in the country found no significant amount of spurious drugs in the pharmaceutical market. Among the 24,000 samples collected by the government for the survey, only around 10 were found to be spurious, it is reliably learnt.”

India being a part of ‘International Medical Products Anti-Counterfeiting Taskforce’ (IMPACT), established under WHO in 2006, decided to work together to combat the growing menace of counterfeit medicines. The Drugs Controller General of India (DCGI) was reported to have several discussions with the convenor of the IMPACT to effectively address the issue.

A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand the problem is less than 1%. On the other hand, in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits. In South East Asia, estimated prevalence of counterfeit Artesunate for malaria is 33-53%.

It appears that in all those countries where access to modern medicines is poor, incidences of counterfeit medicines, ranging from anti-malarial, anti-hypertensive, anti-tubercular, anti-retroviral to cardiovascular and other life saving and life style drugs, are higher.

Apprehensions from some section of the generic pharmaceutical industry that attempts are being made by the interested groups to bring generic drugs under the purview of counterfeit medicines, is unfounded. Why should there be any such threat at all, when the world is witnessing the global pharmaceutical companies scaling up their generic business operations?

Incidence like recent detention in transit of DRL shipment of the generic version of Losartan in the Netherlands or a consignment of Amoxicillin at the Frankfurt airport on the ground of patent infringement cannot be considered as attempts of MNCs to brand Indian generic pharmaceuticals as counterfeit medicines. These drugs violated valid patents held in those countries prompting the local authorities to enforce the law of the land by detaining those consignments. India also has been detaining similar consignments for Nepal whenever those transit consignments violated the intellectual property laws of India. It will, therefore, be not fair to expect Netherlands or Germany to follow a different set of rules for goods in transit, when Indian law itself defines ‘imports’ covering goods in ‘transit’. Thus Government of India should take up this issue on a bilateral platform with the European Union (EU) for a desirable resolution to the problem. Meanwhile, to ensure that pharmaceuticals exports from India do not get adversely affected, Indian pharmaceutical exporters should ensure, till such issues are bilaterally resolved, that their export consignments for third countries transit through non EU routes.

Further, the incidence of fake drugs seized recently with made in India label and originating from China is indeed a fraudulent and criminal action of some irresponsible people who bring disgrace to humanity. Such incidences must be strongly condemned and be taken up by the Government India with the Chinese authorities effectively, to stop recurrence of such criminal activities in future.

The sales of counterfeit medicines across the world as estimated by the ‘Centre for Medicine in Public Interest’ will reach US$75 billion by end of 2010. This is an increase of over 90% as compared to 2005. A report from the WHO’s Executive Board in its 124th session indicated that the detection of counterfeit medicines in 2007 had increased to more than 1,500. This reflects an increase of around 20% over 2006 and ten times more compared to year 2000.

WHO indicated that in 2005-06 the volume of counterfeit drug seizures included 2.7 million articles and the main countries where these articles originated from India: 31%, UAE: 31% and China: 20%.

Enough data are available to establish that counterfeit drugs are posing a growing menace to the humanity. All stakeholders should join hands to address this public health issue, leaving aside petty commercial interests, be it generic pharmaceutical companies or research based pharmaceutical companies, across the world and India is no exception. Otherwise, thugs and criminals who are involved in this illicit trade of manufacturing and distributing counterfeit medicines at the cost of the innocent patients, will keep remaing almost scot free, forever.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion

Tackling the menace of counterfeit medicines – vested interests or petty sentiments should not make the pressing public healthcare issue irrelevant.

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There are following three clearly emerging views on the global issue of counterfeit drugs:1. The innovator companies feel that the generic pharmaceutical industry and the drug regulators are
not really very keen to effectively address and resolve this global public health issue.2. The generic companies and the drug regulators feel that the problem is not as acute as it is
projected to be and the innovator global pharmaceutical companies through their intense advocacy
campaign are trying to exploit the situation to fight against generic medicines and parallel imports.

3. Some other group, including a section of NGOs claim that an important public health sentiment is
being used by the R&D based global pharmaceutical companies to extend intellectual property rights
(IPR) to patients’ safety issue, allegedly for vested interest. These organizations have taken their arguments
to various international platforms like Anti-Counterfeiting Trade Agreement (ACTA) and
International Medical Products Anti-Counterfeiting Taskforce (IMPACT) of the World
Health Organization (WHO), for effective resolution of their grievances.

Addressing some of these concerns:

• IPR being extended to the definition of counterfeit medicines:

Even in India, ‘misbranding’ though an integral part of IPR, is considered as a public health issue and is an offence under Section 17 of the Drugs and Cosmetics Acts, 1940. Albany Law Journal of Science and Technology, 2006 has estimated a loss to the industry towards such counterfeit medicines of US$ 30 billion, which is about 6% of the turnover of the global pharmaceutical industry.

• Magnitude of problem with counterfeit medicines has been inflated:

In the industrialized and developed nations of the world with effective regulatory control, the problem perhaps, may not be as acute. A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand the problem is less than 1%.

Similar study, on the other hand, indicated that in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits. It has also been reported that in South East Asia, estimated prevalence of counterfeit artesunate for malaria is 33-53%.

• Apprehension from some section of the generic pharmaceutical industry:

Apprehensions from some section of the generic pharmaceutical industry that attempts are being made by the interested groups within the industry to bring generic drugs under the purview of counterfeit medicines, is indeed unfounded. As from no developed countries around the world, there has been any threat to non-patent infringing legal generic medicines. And why there should be any such threat at all, when the world is witnessing the global pharmaceutical companies scaling up their generic business operations?

On the contrary generic pharmaceutical business, in almost all developed markets across the world, is growing at a much faster pace than the patented products of the innovator companies and this trend is expected to continue at least in short to medium term.

An unexplained similarity:

From the above details one will be tempted to draw a conclusion that in all those countries where access to modern medicines is poor, incidences of counterfeit medicines are higher. IMPACT has reported counterfeit versions of all types of medicines ranging from anti-malarial, anti-hypertensives, anti-tubercular, anti-retroviral to cardiovascular and other life saving and life style drugs, from these countries.

Various types of counterfeit medicines:

WHO has indicated following types of counterfeit medicines:

• Without active ingredients: 32%

• Wrong ingredients: 21.4%

• Incorrect quantities of active ingredients: 20.2%

• Right quantities of active ingredients but in fake packaging: 15.6%

• High levels of impurities and contaminants: 8.5%

• “Substituted ingredients of anything from paracetamol to boric acid, talcum powder, rat poison or
road paint”

• Medicines purchased online from illegal internet sites: 50%

Factors influencing flourishing trade of counterfeit medicines:

WHO IMPACT has reported following key factors:

• Low manufacturing costs, thus higher profit margin

• Albany Law Journal reports that high pricing ratio of counterfeit medicines compared to a branded
product attracts counterfeiters

• In countries like India the risk of detection of fake medicines is quite low where the penalties for such
heinous crime even today is very lenient, as the amended anti-counterfeit law, for some strange
reasons, has not been made operational, as yet.

Global sales forecast for counterfeit medicines:

The sales of counterfeit medicines across the world as estimated by the ‘Centre for Medicine in Public Interest’ will be around US$75 billion by the end of 2010. This is an increase of over 90% as compared to 2005.

Incidence of detection of counterfeit medicines:

A report from the WHO’s Executive Board in its 124th session indicated that the detection of counterfeit medicines in 2007 had increased to more than 1,500. This reflects an increase of around 20% over 2006 and ten times more compared to year 2000.

Volume of counterfeit seizures, the world over:

WHO indicated that in 2005-06 the volume of counterfeit drug seizures included 2.7 million articles and the main countries where these articles originated from, were reported as follows:

• India: 31%
• UAE: 31%
• China: 20%

Conclusion:

We have, therefore, enough data to establish that counterfeit drugs are posing a growing menace to the humanity. All stakeholders should join hands to address this public health issue, leaving aside petty commercial interests, be it generic pharmaceutical companies or research based pharmaceutical companies, across the world and India is no exception. Otherwise, thugs and criminals who are running to their banks, more often than ever before, with sacks full of money from this illicit trade, at the cost of the innocent patients, will keep going almost scot free, forever.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Growing menace of counterfeit drugs in India: why is the domestic pharmaceutical industry still so apprehensive with the new Amendments of the ACT?

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The growing menace of Counterfeit drugs has remained a serious threat to the healthcare space of India.
Do we have any credible data to assess the magnitude of this menace in India?

No we do not have, as yet. At this stage, the magnitude of the problem is anybody’s guess. Earlier a study sponsored by the World Health Organization (WHO) and conducted by SEARPharm reported that only 0.3% drugs were spurious and 3% of drugs were counterfeits.

Government of India has initiated the largest study in the world to quantify the problem:

To scientifically assess the magnitude of the problem in terms of real size of counterfeit drugs market in India , the Drugs Controller General of India (DCGI) India’s, for the first time ever, has initiated one of the largest studies in the world, as reported by the Times of India May 14, 2008.

The study has already identified 61 popular drug brands from nine therapeutic categories for testing 24000 samples. These include drugs prescribed for tuberculosis, malaria, allergic disorders, diabetes cardiovascular conditions, vitamins etc. This study is expected to cost 50 million rupees or about U.S$1.0 million and is expected to be published, soon.

Making provisions for stricter penalties through amendment of the Drugs and Cosmetics Act, 1940:

To bring into effect stricter penalties for those involved in counterfeit drugs, the process of amendment of the Drugs and Cosmetics Act, 1940 was proposed by the Ministry of Health in October, 2007. These amendments are expected to make the drug-related offences, cognisable and non-bailable.

The latest amendment to the Drugs and Cosmetics Act, 1940 became a law in 2008. The punishment for selling or distributing spurious drugs, which are likely to cause death and grievous hurt to the patients, is now imprisonment for a term not less than 10 years and fine not less than Rs 10 lakh or three times the value of drugs confiscated, whichever is more.

The Minister of Health of India announced in November 2008, that with this amendment the Government of India will “go all out to do away with spurious drugs.”

India working closely with WHO Anti-counterfeiting Taskforce:

India being a part of ‘International Medical Products Anti-Counterfeiting Taskforce’ (IMPACT), established under WHO in 2006, decided to work together to combat the growing menace of counterfeit medicines.

The Drugs Controller General of India (DCGI) was reported to have several discussions with the convenor of the IMPACT to effectively address the issue of such serious threats to the patients at large. Many people believe that China and India are the main source of counterfeit drugs in the world.

Apprehensions of the Indian Pharmaceutical Industry with new Amendments in the Law:

Indian Pharmaceutical Industry although welcomed the stricter punitive provisions in the law, expressed its apprehensions due to lack of clear demarcation between the definitions of spurious drugs and those which can lose their original potency because of improper transportation and storage.

If the law-enforcing authorities pick up such medicines from retail outlets, those can easily get categorised as spurious medicines under Section 17A and 17B of the Drugs and Cosmetics Act, 1940. Consequently the concerned manufacturers could be put behind bars with, presumably, no fault at their end.

While stringent punishment is essential for those involved in such heinous crime, the Government should take enough measures to ensure that genuine drug manufacturers are not harassed by the law enforcing authorities, as the courts will have no judicial discretion to award less than minimum punishment, as prescribed under this Act.

Need for clear guidelines for implementation of the amended ACT:

To allay the major apprehension of the industry regarding possible misuse of some provisions of the Act, the Ministry of Health is expected to work out and quickly announce clear guidelines for implementation of the act by the law enforcement agencies in different parts of India.

Will this amendment help to win the fight against counterfeit drugs?

Only time will be able to give that answer. However, by amending the Act, the Government of India has demonstrated its resolve to address the threat of counterfeit drugs with iron hand. Through enunciation of above guidelines, all concerned are expected to be taken on board to effectively curb, if not totally eliminate this growing menace, for the sake of humanity.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.