(1997; 248 pages) [French]
Observations and recommendations on counterfeit drugs1,2
1 Adapted from WHO document WHO/DMP/CFD/92.
2 Observations and recommendations made at a joint WHO/International Federation of Pharmaceutical Manufacturers Associations workshop on counterfeit drugs, Geneva, 1-3 April 1992.
A counterfeit medicine is one which is deliberately and fraudulently mislabelled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products, and counterfeit products may include products with the correct ingredients, with the wrong ingredients, without active ingredients, with an insufficient quantity of active ingredient or with fake packaging.
1. Society and all innocent parties in the health care chain are “victims” when counterfeiting occurs and it is important that they work together in an atmosphere of mutual cooperation and trust, rather than criticism, in order to combat the menace.
• Patients are the primary victims because their health and even lives are put at risk when they take medicines without the safeguards which they are entitled to expect from legitimate pharmaceutical production and regulatory control.
• Legitimate manufacturers are victims not only because of direct loss of revenue but because confidence in their products is undermined, leading to loss of sales. The reputation of the company and image of the products are both damaged.
• Governments are victims because their funds are used to purchase medicines of unknown reliability and safety and they are therefore failing in their objective to protect the public health. Governments are also victims because of fiscal revenue losses.
• Health care professionals are the victims through loss of patients’ confidence in their services. When the professional is also the supplier (e.g. the pharmacist) financial losses may be incurred through the purchase of fake products.
2. There is evidence that trade in counterfeit products is facilitated where:
- there is weak drug regulatory control and enforcement;
- there is a scarcity and/or erratic supply of basic medicines;
- there are extended, relatively unregulated markets and distribution chains, in both developing and developed countries;
- price differentials create an incentive for drug diversion within and between established channels;
- there is lack of effective intellectual property protection;
- due regard is not paid to quality assurance.
3. There is inadequate information about the scale of pharmaceutical counterfeiting. The Counterfeiting Intelligence Bureau of the International Chamber of Commerce estimates that 5% of all world trade in 1991 was counterfeit. This is likely to be greater for pharmaceuticals which are in high demand and easily transportable. Estimates from a wide range of countries vary from 0 to over 60% in sectors of the market that are inadequately controlled.
4. There is little consistent information on the source of counterfeits. However, there appears to be a clear correlation between the source of counterfeits and the absence of a strong intellectual property system.
5. Although the exchange of information on counterfeit pharmaceuticals is improving:
• there is a perceived inadequacy on the part of certain regulatory authorities in both developing and developed countries to acknowledge and manage the problem, perhaps because this admits to a failure in their control systems, perhaps because they are unable or unwilling to commit adequate resources to address the issue, or perhaps because of other priorities.
• there is also a perceived reluctance on the part of authentic manufacturers to share information available to them, perhaps because of lack of confidence in the way regulatory authorities address the problem and because of concern about the damage to the legitimate product which may result.
6. Counterfeiting varies from small “cottage industries” in some countries to large international consortia, including some elements of organized crime. Often those dealing in counterfeit medicines are also involved in counterfeiting other products such as spirits, tobacco and perfume. There are signs of generalized corruption, including bribery or threats to politicians, officials, pharmacists and others.
7. Evidence is emerging of links between pharmaceutical counterfeiting and international narcotics rings. There are highly developed laws to address the distribution of narcotic drugs and psychotropic substances, in contrast with the lack of laws or adequate systems to cope with counterfeit drugs. Lessons can therefore be learned from the experience of the International Narcotics Control Board (INCB) and United Nations International Drug Control Programme (UNDCP) in trying to combat the illicit trafficking of narcotic drugs and psychotropic substances through international controls.
8. There is a general lack of effective regulation and appropriate legal infrastructure to manage the counterfeiting problem in both developed and developing countries, leading to surprising loopholes in the most sophisticated of systems.
9. Conditions are being created for a greater flow of counterfeits between countries as border controls are relaxed or are abolished.
10. While there is a need to avoid unnecessary public alarm, the principle of openness is, in the long term, in the best interest of all parties.
11. Consumer-generated demand for inappropriate products, in a situation where such products are misused or abused, can encourage the availability of counterfeits.
12. Often there are insufficient official resources dedicated to prevention and prosecution in instances of the distribution and sale of counterfeit products.
13. Also in many countries there are insufficient channels available to pharmaceutical companies to pursue effective remedial action.
1. There is a need for greater international awareness and acknowledgement of the hazards to health of counterfeit medicines. Political will is needed to mobilize resources for implementation of effective countermeasures. Without political will and effective regulation, counterfeiting will continue to thrive.
2. Counterfeiting is an international problem, which needs to be addressed by the implementation of international laws. A sound legal framework is provided by the proposed anti-counterfeiting provisions in the draft GATT-TRIPS Agreement (General Agreement on Tariffs and Trade - Aspects of Intellectual Property Rights including Trade in Counterfeit Goods), which is based on effective international trademark protection and is supported by enforceable sanctions and penalties (including imprisonment).
3. Governments should implement appropriate legislation that identifies the import, national transit and export of counterfeit goods into, across and out of their customs territories as a customs offence and should confer upon their customs services the necessary legal powers to seize the goods with a view to forfeiture if they are subsequently found to be counterfeit. Such legislation should provide for customs services to act on an ex officio basis, and not only on application by the trademark owner.
4. A mechanism should be established through which organizations with an interest in tackling the problem of counterfeiting can exchange information about the nature and extent of counterfeiting, the movement of counterfeit products and concluded investigations into counterfeit operations. To be fully effective, this information network should include manufacturers, distributors, professional bodies and regulatory agencies.
5. A data bank of cases should be established within a clearing house that maintains a directory of interested organizations and contact points. The medium should also provide technical support for training those involved in the detection of counterfeiting activity.
6. Since investigation of an inquiry may be frustrated by leakage of information it was recognized that, until a given case is concluded, relevant information should be disclosed only to organizations and agencies in a position to assist in its investigation.
1. A legal and administrative framework needs to be in place to define and control the legitimate drug market and the drug distribution system before effective controls can be applied to illicit trade and counterfeiting.
The establishment of a drug regulatory agency with a registration procedure for all products is a prerequisite and the workshop endorsed the recommendations of the WHO Guiding Principles for Small National Drug Regulatory Authorities. Full use should also be made of the WHO Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce to establish the true origin of products. Counterfeiting of medicines should be an explicit criminal offence with appropriately severe penalties.
2. Adequate resources must be made available for inspection and enforcement of controls at all stages in the drug distribution chain. Laboratory facilities for carrying out analytical tests on products should be available everywhere, preferably on a national basis or, failing this, through regional or international cooperation.
3. The points through which pharmaceutical products can be imported or exported should be designated. Customs staff at these designated points should be alerted to the significance of pharmaceutical counterfeiting and trained to identify counterfeit material.
There should be targeted inspection of pharmaceutical goods at border points and samples should be taken for analysis where appropriate.
4. Procedures should be established to ensure cooperation and exchange of information between the different branches of law enforcement: police, customs and the national drug inspectorate.
5. A critical examination of the whole legal framework should be made in both developed and developing countries in order to ensure that there are no loopholes which allow pharmaceutical products to be manufactured, imported, exported or distributed outside the controls of good manufacturing practices, product licensing and other regulatory requirements.
6. Pharmaceutical manufacturers, distributors and health care professionals should notify their national customs service of any information that comes into their possession concerning possible import/export shipments of pharmaceutical products suspected to be counterfeit. Whenever possible, specific details should be provided of carrier, likely point of entry/departure, consignor/consignee, probable date of arrival, description of goods involved and details of packaging/labelling to assist customs to target the goods for interception.
7. National laws should provide rights of private action by companies to enforce their trademark rights through seizure of clearly suspected counterfeit shipments. Such rights, which are exemplified by the Trademark and Counterfeiting Act of 1984 of the United States of America can provide additional protection to patients and manufacturers if:
- confidentiality in associated legal proceedings is protected, and
- penalties for their infringement constitute a serious deterrent.
8. Developing countries should study, in particular, the countermeasures adopted in some countries of West Africa, and consider the adoption of similar strategies.
The pharmaceutical industry
1. The national industry associations and the International Federation of Pharmaceutical Manufacturers Associations (IFPMA) should encourage pharmaceutical companies to share information both with drug regulatory agencies and among themselves when instances of counterfeiting are detected. The development of guidelines should be considered.
2. The industry should continue to develop anti-counterfeiting measures such as packaging and labelling which are hard to copy (e.g. use of holograms). This includes the use of both covert and overt devices that are made known to reliable enforcement agencies to facilitate identification.
3. Manufacturers should ensure that they establish suitable security measures to detect and prevent diversion of ingredients, products and packaging material for illegal purposes.
4. The industry, through the IFPMA, should collaborate with the Customs Co-operation Council (CCC) over the preparation of guides and training material for customs officials and inspectors.
5. The industry should be prepared to contribute its expert knowledge on both the packaging and the active ingredient profile of its products in undertaking or assisting in the inspection and analysis of products suspected of being counterfeit.
6. Pharmacists, wholesalers and manufacturers should cooperate with each other and with enforcement authorities to ensure regular sampling and analysis of pharmaceutical products in circulation as a means to identify and deter counterfeiting activities.
1. The professional bodies should exhort pharmacists to purchase stocks from reputable sources, to report any suspicion that they have been offered or have acquired counterfeit products, to isolate and withhold from sale any suspect products and to cooperate with enforcement agencies.
2. The professional bodies should also establish effective channels for communication and cooperation with enforcement agencies and legitimate manufacturers, and should act to disseminate information about suspected counterfeiting activity to their members.
1. Products should reach the end-user by the most direct route that is practicable. Distribution of products through a large number of intermediaries and complex transactions should be discouraged. Each facility within the distribution chain must be registered, licensed, inspected and required to maintain complete records of the source from which consignments are purchased.
2. Ideally the dispensing pharmacist should obtain medicines directly from a reputable manufacturer. In practice, a legitimate role exists for the responsible wholesaler. However, there should not normally be more transactions than those between manufacturer and wholesaler, and wholesaler and dispensing pharmacist. Batch documentation should provide details of all transactions relating to the distribution of a given consignment.
3. As a condition of licensing, distributors should employ a suitably qualified person, preferably a pharmacist, to be responsible for documentation and analysis.
4. To facilitate the investigation of suspected counterfeit products and their origin, acquisition and sales records should be available to authorized persons.
Consumers and educators
1. The public should be made aware of the existence of counterfeit pharmaceutical products in order to mobilize the political will for implementation of effective countermeasures. In countries where medicines are sold outside normal pharmaceutical channels, the public should be encouraged to purchase medicines only from reliable vendors.
2. A programme of education about counterfeit medicines, having regard for national circumstances, should be developed for community leaders, teachers, the media, the police, traditional healers and local health personnel.
3. The industry, professional bodies, regulatory authorities and the international community should ensure that consumers are given appropriate and timely information on the availability of counterfeit products, recognizing the complementary needs to provide relevant consumer information without engendering unwarranted public alarm.