[Ip-health] Pharma Focus Asia - Counterfeit Drugs: The Issue of Key Concern and its impact on Indian Pharma Industry

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Counterfeit Drugs: The Issue of Key Concern and its impact on Indian
Pharma Industry

Pune
Nov 23, 2009

The issue of Counterfeit Drugs is of serious concern for both the
developed as well as the developing countries. Though the exact
statistics is not available but as per the estimates of the World Health
Organisation (WHO) one out of ten drugs sold in the global markets  are
either spurious or sub-standard. This figure is indeed alarming. The
statistics are insignificant as this trade kills people worldwide and is
currently a global social issue.

Sales of Counterfeit Drugs worldwide are estimated at $32bn causing
$46bn annual loss to the Global Pharmaceutical Industry(Ref-1). As per
the estimates of WHO the business of selling Counterfeit/Fake Drugs is a
burgeoning Global Industry estimated to grow at 13% a year to reach
$75bn by the next year, a 92%  increase from the Year 2005 & as much as
10% of the World's trade -25% in poor countries -consists of
Counterfeit/Fake Medicines

Counterfeits have been sold around the World including US,China,Russia
and India where the Death penalty was recently recommended for those who
make or sell counterfeit drugs. However in the developing markets like
Asia and Africa the problem is more severe due to highly fragmented drug
manufacturing and distribution infrastructure and absence of a robust
legal and regulatory system. Lack of patent protection, uniform laws and
less policing in many developed countries are considered to be the facts
contributing to the proliferation of the Counterfeit/Fake Drugs.

The patients who receive Counterfeit Medicines are subjected to multiple
risks. These Drugs can harm the health as the lives of patients are put
at risk of adverse effects from unprescribed medicines or substandard
ingredients. These fake medicines can contain anything from a placebo
(inactive substance) to a harmful substitute. They do not provide the
intended therapeutic benefit to the patient and many times cause
significant adverse reaction leading to a loss of life. In particular,
Counterfeit anti-microbial drugs are a threat to public health with many
devastating consequences for the patients, increased mortality,
morbidity and emergence of drug resistance.

No wonder controlling of the Counterfeit/Fake Drugs trade is an
International challenge today as these products have entered the
Healthcare systems of several countries. The menace has reached such a
scale that even the World Health Organization(WHO) and the International
Federation of Pharmaceutical Manufacturers' Association(IFPMA) have
found it impossible to come up with effective measures to control it.
Currently the mechanisms to track and seize such products are limited
due to inadequate surveillance in most of the countries. Only 5% of the
Global Drug cargo movement through the port are physically verified by
the Customs authorities.

Globally the Pharmaceutical companies have used several technological
measures such as innovative packaging designs, bar coding and Radio
frequency identification (RFID) chips to arrest the menace of
Counterfeit Drugs. The USFDA and the other drug regulators are also
pushing for the adoption of RFID hardware and software throughout the
Pharmaceutical Industry to combat the sales of the Counterfeit/Fake
Drugs. Buying drugs from the licensed drug stores with prescription and
efforts to increase pharmacovigilance can also reduce the problem.

Bilcare Technologies,India a Research and Technology Leader is providing
business solutions in the Non-Clonable Authentification, Brand
protection & Security solutions space.The product has a label with a
unique bar code made out of Nanotechnology and fingerprinting. With
breakthrough research and development in nanotechnology and an emphasis
on creating cost-effective solutions, Bilcare Technologies has created a
first-of-its-kind NonClonable Authentication Technology with several
applications, including for creating enhanced Security. The strength of
the solution lies in the fact that the nano tag fingerprint cannot be
reproduced even by Bilcare as the creators because of fundamental
technology behind it.

As far as India is concerned it is estimated that fake medicines
constitute 15 to 20% of the Rs 40,000 crore Indian Pharmaceutical
Market. In India there is high demand for these category of drugs as
these are available at 40% of the original price and are easily
available in the Market. As per the Industry estimates the
Counterfeit/Fake Drugs market in India is growing at an alarming rate of
20-25%(Ref-2).The most disturbing trend is that 1/3rd of all Counterfeit
Drugs sold globally are said to be made in India. As per a WHO report
the majority of counterfeits originate from India(31%) and  China(20%).
The vast Counterfeit Drugs Industry is thriving without the knowledge of
the Drug Inspectors who are the mainstay of the scheme for the
enforcement of the Drug standards under the act. The shortage of the
Drug Inspectors and proper and adequate lab facilities for checking the
purity of Drugs and the inherent weakness in the Drug distribution
system are considered the prime reasons for the spread of the
Counterfeit/Fake Drugs menace. The Indian Pharma Industry has serious
concern for this key issue which undergoes both tangible(loss of
revenue, profits) and intangible(credibility, reputation) loss.

In India the menace is more profound in the smaller cities and rural
areas as these often lack the required surveillance at the wholesaler
and the retailer outlets. Also low education levels and lower purchasing
power play a key role. In India the conventional drugs are more
counterfeited more as they are often purchased Over the Counter(OTC
class of Drugs) without a doctor's prescription. In India the
Counterfeit Drugs market is thriving over on common Over-The-Counter
Drugs as well as the Life Saving Drugs. While all Generics(Branded and
Non-branded) can be counterfeited but it is the Non-branded
Generics(Ampicllin.Paracetamol etc) that are widely counterfeited in the
country. Counterfeit Anti-infectives is a wide spread problem as well.

With the advent of Information Technology Drug Counterfeiting is
becoming more and more sophisticated. Counterfeit drugs are imported,
smuggled or manufactured locally by consortia in large factories and
establishments equipped with the most modern equipments, as well as by
small-time operators in smaller, often poorly equipped facilities.
Present day complexities in the distribution systems lend themselves to
several entry points for Counterfeit Drugs into the system. The free
availability of drugs without prescription has also lead to
proliferation of Counterfeit Drugs.

As per a Report released by OECD (Organisation for Economic Cooperation
and Development) the reported cases of Counterfeiting are less in India
compared with the other Developed countries. In the Year 2005,India
stands at the 8th position among the jurisdictions with the most
reported incidents of Counterfeiting. China,Russia and US stands in the
first three positions respectively.

India exports about Rs 30,000 crore of Generics every year of which
about 15% goes to the African countries(Ref-3). Kenya and Tanzania have
recently passed the Anti-Counterfeit legislations which could hamper
exports of Indian Generics if not implemented carefully. India has
started holding diplomatic consultations with most of its African Buyers
stressing on the need for them to distinguish between Counterfeit and
the Spurious Drugs.

The Bill, if enacted, will not only deprive Indian Companies of their
Export Market but also deny the people of Uganda access to
safe,effective,quality and affordable medicines from not only India but
also those supplied under various donor programmes. The proposed law
also intends to make transit or trans-shipment of counterfeit goods
illegal and allows border measures against such goods. At stake is a
market that is worth over Rs 4,000 crore every year and growing
fast(Ref-4).

The Indian Government concerned ministries (Department of Commerce,
Department of Pharmaceuticals and the Ministry of Health) have joined
hands to protect the reputation of the India's Generic Drug producers at
the International Forum.The Mission is to protect the Indian Generic
Drug Industry which supplies low-cost life saving medicines to the poor
countries. The Indian Government is concerned as similar moves are being
planned by other nations in the continent too.

The Indian Government has already launched a major diplomatic exercise
in Africa by asking the Indian Ambassadors to the African Countries to
take up the issue with the Ministers  of Health and Trade as well as
Opinion Leaders of each country. The issue  is not a matter of market
access for Generic Medicines from India, but one of ensuring that  the
Healthcare Systems in those countries remain affordable for their
citizens.

Globally another key issue for the Indian Pharma Industry is the seizing
of the Drugs from the country by the EU authorities (which they believe
infringe the local patent laws while transiting from its customs).The
Dutch authorities have seized several Indian consignments including
those of some of the Leading Indian pharma names like
Dr.Reddy's,Aurobindo and Cipla.The European Commission claimed that one
third of the four million counterfeit medicines seized by the EU
authorities come from India. According to the EU authorities the
consignments are being seized because the firms have violated Patent
Rights and therefore are "Counterfeit". As per the Indian companies the
seized products are meant for the largely unregulated markets and hence
are genuine and legal.

According to the Indian Pharma Industry watchers the current definition
of "Counterfeit" by WHO and the one proposed by the WHO-backed
International Medical Products Anti-Counterfeiting Task Force(IMPACT) is
leading to such interpretation of the in-transit drug consignments from
India. As per the Large Indian Pharma companies the definition of
Counterfeit Drugs is a very important issue and needs to be debated as
it can have serious impact on Indian Pharma exporting firms.

These allegations stem from the new set of proposals being put forward
by the European Nations along with the WHO. India has accused the
European Union(EU) of campaigning against the exports of Generic Drugs
from India to Africa and South America. EU's move could hurt Indian drug
makers as Africa and South America account for 14% and 7% of the total
Drug exports respectively-estimated at $8bn(Ref-5).India also has
alleged EU for pushing African countries to adopt new laws classifying
Generic Drugs as Spurious..The Indian Government now wants EU to prevent
such incidents as most drugs exported from India to Latin America are
routed through Europe. This would force the Exporters to look at
alternative routes to send the medicines which is likely to impact the
cost competitiveness of Indian Generic Drugs.

The Indian Government is in dialogue process with the EU to change its
customs regulations so that it doesn't allow seizure of in-transit
drugs. Health Advocacy groups like OXFAM International, Health Action
International(HAI) and Knowledge Ecology International(KEI) have issued
a strongly worded statement calling on the European Union to review and
modify its regulations on Counterfeiting that are prompting the
seizures. According to these Health Advocacy Groups this kind of
seizures by the EU would have disastrous effect for access of medicines
to the poor in these regions. India has also approached the World Trade
Organization (WTO) to settle the dispute with EU on this key issue.

Recently the National Agency for Food and Drug Administration and
Control(NAFDAC) of Nigeria has  issued a Press Release stating that a
Large consignment of Fake Anti-malarial Generic  Pharmaceuticals labeled
"Made In India" were in fact found to have been from China. India had
lodged a strong protest with China demanding action against Chinese
Manufacturers of such spurious drugs whose names and addresses were
clearly printed on the confiscated cartons. India has to ensure that
fakes are not passed off as manufactured -in-India products bringing
disrepute to the country.

Fake foreign made Generics carrying the "Made in India" label can do
tremendous harm to the interests of India as a Nation.It not only dents
India's image as a high quality drug producing nation but also takes our
legitimate market share. It also erodes the distinction between Generic
and Fake medicines that India has been campaigning for at the WHO and
WTO.

As per the most recent development Kenyan Government has conveyed about
their "No Problem" with the Indian pharmaceutical imports which has been
affected by the seizure of fake drugs purported to be made in India but
actually produced in China. Several manufacturers of Generic Drugs were
registered through the Kenya Medical supplies to the Ministry of Health
and have been issued with Good Manufacturing Practice(GMP) certificates.

India has also demanded China to take strict action against the
manufacturers whose names and addresses were printed on the confiscated
cartons.Supply of Spurious Drugs to Africa is on the rise. Urgent steps
have to be taken to ensure that India's reputation as a reliable
supplier of high quality and cheap medicines is not ruined.Government of
India is also looking at expediting in this matter and taking
appropriate action at the earliest possible time.

Possible Solution:

Industry watchers believe the key responsibilities lies with the
Government which must formulate appropriate policies and laws and have
an enforcement organization that works relentlessly to control the
Counterfeit Drugs Menace. Industry on its part must devote resources to
monitor trade and build awareness among consumers. Although all the
stakeholders of the Pharma Industry are concerned about this key
Industry issue but it is not as straightforward as one might imagine.
The Industry,regulators and stakeholders need to work in coordination to
take up this issue in a more effective manner & to fight this growing
menace.

The Industry in support with the Government, various consumer forums and
Health Advocacy Groups who are working on this issue have to increase
the awareness about the anti-counterfeiting steps taken up by them.
There has to be a kind of media campaign to support the Industry efforts
in tackling this menace. Media (both the print as well as the electronic
medium) has to play a key role here. The need of the hour is certainly
to have a complete innovative approach to fight the Counterfeit Drugs
menace.

For more details contact:
Sasikant Misra
Mobile: +919767583582
Email: sasikant_22@rediffmail.com; sasikant_in@yahoo.co.in

References:

Ref-1: Article titled "Govt gears up to curb fake drugs menace; by Soma
Das,The Financial Express ,dated 8 January,2009

Ref-2: Report by "ASSOCHAM" & Press Release in "The Financial Express"
Titled "Fake Drugs Market growing at an alarming rate", dated 10
February,2008

Ref-3: Article titled "Exporters of Drugs under Govt Lens"; by Amiti
Sen,The Economic Times, dated 14 September,2009

Ref-4: Article titled "Govt protests as Generic Drugs get bitter pill in
Africa" ; by Arun.S,The Financial Express,dated 20 April,2009

Ref-5: Article titled "Passing Through Restricted area" ; by Noemie
Bisserbe,Business World,11 May,2009 issue



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