[A2k] SUNS: Counterfeit issue stirs debate among WHO member states

[Sangeeta]

TWN Info Service on Intellectual Property Issues
12 August 2008
Third World Network
www.twnside.org.sg <http://www.twnside.org.sg/>


IP: Counterfeit issue stirs debate among WHO member states
Published in SUNS #6536 dated 12 August 2008


Geneva, 11 Aug (Sangeeta Shashikant and Riaz K. Tayob) -- The jurisdiction
of international organisations over the enforcement of intellectual property
violations has also become a controversial issue in the World Health
Organisation, as it has in other agencies recently.

In the World Customs Organisation, attempts to push through a new uniform
set of standards on intellectual property (IP) enforcement by customs
authorities has resulted in developing countries asking for a review of a
misleading Secretariat report alleging consensus for adopting the standards
(see SUNS #6534 dated 8 August 2008).

The Universal Postal Union, which is holding its Congress in Geneva, has
also been discussing resolutions aimed at involving postal authorities in
raising awareness initiatives to prevent illegal circulation of counterfeits
as well as supporting efforts to combat counterfeiting and piracy. In the
course of the discussion, many countries have made clear that the postal
authorities have no competence in this area (see SUNS #6535 dated 11 August
2008).

Developed countries have also attempted in the past two years to place
enforcement of IPRs as an item on the agenda of the Council for TRIPS at the
WTO, but this has faced objections by developing countries which argue that
enforcement comes under the jurisdiction of national authorities, and
parties that are dissatisfied can have recourse to the dispute settlement
system of the WTO.

A similar debate on the content and mandate of IP enforcement also took
place at the World Health Assembly, which is the annual forum for member
states of the WHO to discuss health policies.

A draft resolution on counterfeit of medical products presented at the 61st
World Health Assembly in May 2008 was the subject of intense discussion, as
was a WHO Secretariat report (A61/16) on this issue.

After many member states raised concerns about the implications of the
draft, it was decided to defer a decision on it. Instead, the next meeting
of the WHO Executive Board in January 2009 will discuss the draft, and
another discussion will be held at the next WHA in May 2009.

Both the draft Resolution and the Secretariat's report essentially sought to
legitimize an initiative known as "International Medical Products
Anti-Counterfeiting Taskforce" (IMPACT), its activities and documents.

The draft resolution (A61/A/Conf. Paper No. 1) was initially sponsored by
Gambia, Ghana, Nigeria, Tunisia and United Arab Emirates. During a meeting
at the Committee level, the European Union also became a co-sponsor.

During the debate at the WHA (23rd May), several developing countries raised
several concerns, including:

-- The composition of IMPACT, whose members comprise industry
representatives as well as law enforcement organisations;

-- The hasty push to endorse IMPACT initiative; and

-- The definition of counterfeiting proposed by IMPACT and the principles
and recommendations developed by IMPACT without any prior deliberations of
member states, while sidelining previous WHO guidelines on counterfeiting,
without adequate explanation.

Countries also objected to the Secretariat's report for endorsing IMPACT and
its activities and for addressing counterfeiting as an end in itself rather
than as a public health issue.

A major underlying concern of the countries is that legitimate generic
medicines may get caught up in the web of definitions and enforcement of
"counterfeit products", with adverse consequences for access to medicine as
well as legitimate trade. India, for example, stressed that generic and
branded medicines that are not registered but that are available are not
counterfeits.

After a lengthy discussion on the subject, the WHA in May agreed that the
Secretariat's report and the draft resolution will be considered further by
the 124th session of the Executive Board (in January 2009), for a decision
on how to refer the matter (including the draft resolution) to the 62nd
World Health Assembly in May 2009.

According to the Secretariat report, the WHO launched IMPACT in 2006
following a conference in Rome, which emerged with a "Rome Declaration".
IMPACT's stakeholders include INTERPOL, OECD, World Customs Organization
(WCO), World Intellectual Property Organization (WIPO), World Trade
Organization (WTO), European Commission (EC), Council of Europe, United
States Pharmacopoeia, Commonwealth Secretariat, Association of Southeast
Asian Nations Secretariat, and International Federation of Pharmaceutical
Manufacturers and Associations (IFPMA - the representative association of
multinational pharmaceutical companies).

According to the report, there are five working groups under IMPACT, on (1)
Legislative and Regulatory Infrastructure; (2) Regulatory Implementation;
(3) Enforcement; (4) Anti-Counterfeiting Technologies; and (5)
Communication.

The report states that IMPACT has developed: "Principles and elements for
national legislation against counterfeit medical products", recommendations
for strengthening WHO's Good Distribution Practices (and submitted them for
consideration and appropriate action to WHO's Expert Committee on
Specifications for Pharmaceutical Preparations); a guide to investigating
counterfeiting of medical products and other pharmaceutical crimes (for
training regulatory and enforcement officers); drawn up a communication
strategy for creating awareness of the risks created by counterfeit medical
products in the supply systems; and has published a summary assessment of
existing technologies.

The draft resolution, inter alia, urges member states to: (1) establish and
enforce legislation and regulations that prevent counterfeit medical
products to be manufactured, exported, imported or traded in international
transactions and the regulated distribution system, taking into account the
principles and recommendations developed by IMPACT; (2) establish effective
mechanisms of coordination and collaboration amongst health enforcement and
other authorities as well as appropriate mechanisms enabling international
cooperation; (3) promote awareness among health professionals and consumers
of the risks posed by counterfeit medical products.

The draft resolution also requests the DG, inter alia, to: (1) support
member states to develop and implement policies aimed at combating
counterfeit medical products including facilitating and exchanging
information at the international level, developing tools, guidelines,
training and awareness initiative, and methodology for evaluation and
monitoring; (2) strengthen the Secretariat of IMPACT; (3) seek extra
budgetary resources in addition to those in the regular budget to this end;
and (4) continue the development and dissemination of independent
information on instances of counterfeits.

Essentially, the draft Resolution and the Secretariat's report sought to
legitimize IMPACT, its activities and documents.

Some delegates as well as several independent experts following the issue
say that member states should critically analyse IMPACT and its activities,
including conflicts of interests as well as implications of the definition
and measures proposed by IMPACT on developing countries before deciding on
the endorsement of the initiative, its activities and the two documents.

According to experts, several of the measures proposed by IMPACT appear to
be burdensome, financially and otherwise on governments, impinge on
sovereignty, go beyond requirements of the TRIPS Agreement, promote purchase
of IPR protected technologies (to combat counterfeiting) and has the
potential of hampering legitimate trade.

A delegate from an African country, speaking privately, said that the
problem with the draft Resolution was that it took power away from the
regulatory agencies and placed it in the hands of the law enforcement
agencies that had no clue about quality, safety and efficacy of medical
products.

The delegate added that he had participated in the IMPACT meetings, but
representatives of big pharmaceutical companies prepared all the documents
in advance. There was hardly any deliberation during the meetings on the
documents, which were then just presented for quick endorsement by
participants at the meeting.

Another concern of experts is the definition of "counterfeiting", and the
related mixing up of two separate issues - the counterfeiting of products
and the quality of drugs.

These issues were captured well in an article of the Delhi-based Times of
India, which said that: "WHO defines counterfeit medicines as those which
are deliberately and fraudulently mislabeled with respect to identity or
source. At the same time, products with correct ingredients but fake
packaging bring trademark infringement within the scope of the definition.
Thus, the definition mixes issues of spurious drugs and substandard drugs
with intellectual property infringement."

IMPACT provides another definition, i. e. that ''a medical product is
counterfeit when there is a false representation in relation to its
identity, history, or source" and this applies "to the product, its
container, packaging or other labeling information". According to the
definition, it applies to "both branded and generic products.''

According to the Times article, although "the term counterfeiting has
different definitions around the world, it is often defined as a trademark
infringement". It quotes an expert from the Delhi-based Centre for Trade and
Development (CENTAD) as saying: "The adoption of the IMPACT definition will
have adverse impact on the access to drugs by branding legally produced
generic drugs as counterfeit drugs''. The article also reported on fears
that "with such regulations, customs authorities across the world will seize
or delay the transit of legitimate generic medicines on suspicion of their
being counterfeit".

Several of the concerns above were also voiced by some member states during
the debate on the draft resolution and the Secretariat's report during the
WHA last May, while some other member states supported the draft resolution
and the report.

Nigeria, in support of the resolution, said that counterfeiting poses
serious threats and is detrimental to the public health. It however added
that the resolution was not intended to address intellectual property rights
issues. Factors that contribute to counterfeiting include lack of
appropriate legislation, weak penalties and absent or weak regulation, said
Nigeria, adding that counterfeiters make huge profits.

Slovenia, on behalf of the European Union, said that a study by the European
Commission demonstrated a 51% increase in seized counterfeits. It said that
it actively supported IMPACT.

The US commended IMPACT on its strategy, guidance, information and efforts
and urged continued support and commitment from member states and WHO. It
supported the resolution and proposed several amendments including a new
paragraph to control the transhipment of pharmaceutical products, active
pharmaceutical ingredients and exipients used in the production of
counterfeits.

Morocco and Japan also supported the resolution. United Arab Emirates, for
the Eastern Mediterranean Region (EMRO), pushed for more financing for the
initiative.

India, on behalf of the South East Asia Region (SEARO), objected to the
draft Resolution and the Secretariat's report as both had not been
considered or deliberated upon by the Executive Board. It said that it did
not know what "principles and recommendations" were being referred to in the
draft resolution as it had not seen them, and this may be true for other
regions as well. Thus, how can these be taken into account, it asked.

India said it recognised the magnitude of spurious and poor quality medical
products and was fully committed to combating those that did not conform to
quality standards. It added that it was important to state up front (in the
resolution) that the aim is to protect public health, not trade interests.

India also recalled another WHO initiative, i. e the "Guidelines for the
development of measures to combat counterfeit medicines" (WHO/EDM/QSM/99.1),
which it said, provided an overview of the problem and the factors
contributing to counterfeiting, steps and specific measures to be taken to
combat it.

The guidelines provide that member states take their own measures to combat
counterfeits, said India, adding that WHO should provide a status update on
the outcome of the guidelines. India also raised concerns with the
"counterfeiting" definition proposed by IMPACT. It said this definition has
never been used before. Any change in the definition whenever it is
considered should state that generics do not entail patent infringement.

It also said that it was important to state up front that the aim was to
protect public health and not trade interests. It emphasised that generic
and branded medicines that are not registered but that are available are not
counterfeits. India sought to defer the matter to enable member states an
opportunity to consider all aspects since the nuances, implications, and
scope of the issues have yet to be discussed.

Brazil expressed alarm that IMPACT's international stakeholders included
WIPO, WTO, Council of Europe, IFPMA, European Commission and Interpol. It
said that WHO had a crucial role in public health but it was concerned about
how this role is now mixed with law enforcement mechanisms that could drive
out legitimate generic producers.

Brazil said that it was not in a position to even "note" the report and
requested further discussions. It added that the results from IMPACT had
political consequences for developing countries and for legitimate
producers. Brazil said that it did not recognise the legitimacy of IMPACT
and its reports and thus saw no reason to discuss the resolution.

Argentina said that it could not support the contents of WHO's report as it
focuses the discussion on combating counterfeits as an end in itself rather
than a public health effort. It stressed that counterfeits should not be
dealt with by WHO, adding that Article 1.1 of the TRIPS Agreement of the WTO
states that member states can establish the mechanisms they see fit to
implement the agreement.

Thailand also called for further discussions on the draft resolution and the
Secretariat's report. It said the WHO should explain how the IMPACT
initiative was different from (or similar to) the 1999 WHO Guidelines. If it
is different, it should show the difference and explain the rationale for
the change in the WHO's strategy.

Venezuela supported the interventions by India and Thailand, and said that
there is a need to further analyse the causes of counterfeiting. Chile said
that the Secretariat's report focuses on counterfeits as a problem in and of
itself and not as a public health problem. It said that the documents
produced by IMPACT did not have the mandate of the WHA. It also supported
interventions by Thailand and India and said that it did not agree with the
resolution.

Cuba said that not adopting the resolution does not mean that a country will
not act against counterfeit goods as Cuba was doing a great deal in this
regard.

Indonesia also agreed with others that the principles and recommendations
developed by IMPACT and was mentioned in the Secretariat's report needs
further exploration. Since these have implications beyond the health sector,
more time is needed for national consultation.

Jamaica, on behalf of CARICOM, welcomed the IMPACT initiative but cautioned
that expanding the nomenclature to other products should not divert
attention from counterfeits. Counterfeits are sold with the intent to
deceive with respect to origin, source or insufficient or incorrect
ingredients that may or may not be harmful.

A drug that had not received regulatory approval is not necessarily harmful.
The manufacture of counterfeits is not limited to developing countries but
also includes Canada, Belgium, Netherlands and Portugal, amongst others.
Generics are not counterfeits, it added.

Jamaica clarified that not all infringements of IPRs can be described as
counterfeit and often it is a matter of controversy. It also stated that the
relationship between rights and the exceptions to rights is complex, adding
that sometimes cheaper products were also sold under the exhaustion of
rights principles [parallel importation]; through the use of IPR exceptions,
such as voluntary or non-voluntary licenses, and that these were not
counterfeits. +