All counterfeiting is criminal, but the counterfeiting of medicinal products must be treated as a special issue because it puts people's health at risk. There is a need for far greater awareness of the hazards to health posed by counterfeit medicines and a far greater political commitment to international cooperation to counter the traffic in counterfeit medicines.
The pharmaceutical industry shares these concerns and is all too aware that patient confidence suffers when pharmaceutical products are perceived as ineffective or harmful as a result of counterfeiting. Additionally, losses in revenue as a result of counterfeiting are enormous, and the damage inflicted on a company's reputation can be severe.
Definitions and statistics
The term counterfeit, as applied to medicines, can be used to cover many different circumstances. In its strictest sense it means a product which is not made by the legitimate manufacturer and which is a precise imitation of an original with the correct active ingredient in the correct dosage, presented in a similar form and in an apparently identical pack with the same, copied, technical literature. There is, however, a wide spectrum of types of counterfeit ranging from the product containing the correct dose of active ingredient, to the extreme case of a dosage form which contains none of the correct active ingredient, or contains the wrong ingredient. Medicines containing no active ingredient, or a sub-therapeutic dose are not only a health-hazard to the individual but, in the case of anti-infectives, a danger to public health - with the added risk of encouraging bacterial and parasite resistance.
Estimates of the level of counterfeiting vary. It is difficult to obtain a true figure, but this must run into billions of dollars and possibly involves organized crime. The prevalence of counterfeits in developing countries has been acknowledged for some time as a major threat to public health. However, the widespread circulation of seriously substandard products, and the lack of comprehensive product registration tends to "blur" the distinction between a deliberate counterfeit and a poor-quality product which does not comply with the labelled claim. Reports of high percentages of counterfeit products in developing countries may, therefore, be distorted by the prevalence of very poor quality products.
Why are medicines a target?
Medicines represent one of the most regulated products available so why do they attract counterfeiters? There may be many reasons. Firstly, medicines are high value items in relation to their bulk, and ingredient costs can be low if cheap substitutes are used for active ingredients (or if they are omitted altogether). Manufacture is also cheap as there are no overheads to pay for quality assurance or meeting GMP standards. Gross margins are therefore very high. In addition, many countries, especially in the developing world, are without adequate regulation and enforcement and, even in the industrialized countries, the risk of prosecution and penalties for counterfeiting provide a weak deterrent.
Another factor is the process by which a patient comes to take a medicine, which is different from other consumer goods because the end user is unable to evaluate the product ingredients. The doctor prescribes the product but, in most cases, never sees it. The pharmacist usually buys the product from a wholesaler and commonly uses more than one wholesaler. Parallel trading opens a door through which goods of indeterminate origin can enter the distribution chain. This increases the vulnerability of medicines to counterfeiting because it provides a number of possible points of insertion of illicit material even when the system is highly regulated, as is the case in the industrialized world.
Prevention of counterfeiting
At a joint WHO/IFPMA meeting on counterfeit medicines, which took place in April 1992, the view was expressed that regulation and enforcement are necessary to deal with counterfeiting of medicines, and that this regulation was identified as inadequate in both developed and developing countries. Key factors in preventing counterfeiting include: stronger and more specific legislation to take action against counterfeiters; cooperation and coordination between all the parties concerned - that is regulatory agencies, police, customs, private industry and organizational professional bodies and WHO. Appropriate exchange of information and the development of mutual trust regarding use of such material is needed, as are tight security measures by companies to ensure that products, and especially packaging material, are not diverted. Regulation should be made by and of pharmacists and wholesalers who are part of the distribution chain.
Counterfeit medicines can more easily be introduced into the distribution chain when this is too long or where parallel trade or international trading of Pharmaceuticals as "commodities" by brokers takes place. Ideally, there should never be more than three stages in the chain - from licensed manufacturer to reputable wholesaler to a supervised dispensary or retail outlet. The TRIPS agreement imposes obligations on members of the World Trade Organization to "provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale" (Article 61). The industry believes that these obligations should be implemented as a matter of urgency by countries where weak legislation impedes action against counterfeiters.
The IFPMA has encouraged its constituents to ensure transparency in the exchange of information on counterfeits with regulatory authorities and within the industry. Companies are also expected to assist official laboratories with the analysis of suspected counterfeit products. This cooperation can only be realized, however, if all parties respect the need to treat all information in a responsible manner, thereby avoiding damage to legitimate products and the reputation of the companies concerned.
Industry has developed anti-counterfeiting measures such as the use of holograms, but experience has shown that counterfeiters soon copy the technology. Efforts to impede counterfeiting through innovative special packaging need, therefore, to be pursued by industry. Individual companies also have a responsibility to ensure that security measures are in place to detect and prevent diversion of products and components, such as packaging, for illegal purposes.
A small group of major companies are now cooperating in the Pharmaceutical Security Initiative (PSI) which has been formed with the aim of combating counterfeiting and illegal diversion which results in danger to the patient and damage to the image of the industry, either as a whole or as individual companies. The mission of the PSI is to act as an intelligence centre for member companies and to establish worldwide investigative programmes. It works closely with Interpol and the World Customs Organization (WCO). Evidence which has so far been obtained by the PSI points to a "pharmaceutical underworld" worth around $12 billion per annum. A major study in the Philippines between 1993 and 1995 showed that 8% of 1382 samples were counterfeit (36 products) and 59 out of 473 pharmacies visited were selling counterfeit products. More recently, in China, investigations led to the discovery of $3 million-worth of counterfeit pharmaceuticals circulating in the country . Although PSI was initially formed as a consortium of three companies, it is now seeking to expand. It holds information which is stored in a data base. This information is collected using chain-of-evidence procedures and is strictly confidential. Information will be passed on a "need to know" basis only to police, customs and regulatory agencies with which the group is cooperating on an operation.
There is no such thing as a "good" counterfeit medicine and it is quite unacceptable to "tolerate" counterfeiting where the products are close copies of the original and do not appear to pose a hazard to health. Any medicinal product which comes from an unauthorized source is a potential hazard, as it is not subject to quality assurance and regulatory control. To ignore this is will be to deny the usefulness and responsibility of regulatory control.
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