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Counterfeit Medicines: the Need for a Community of Practice

October 15, 2012

A Workshop on counterfeit medicines promoted by the Global Forum on Law, Justice and Development (GFLID) and hosted by the World Bank was conducted on October 2-3, 2012.  The objective was to use a knowledge-sharing workshop that would facilitate a multidisciplinary understanding of the “global phenomenon of Counterfeit Medicines”.  GFLID’s goal was to facilitate relevant parties to convene and establish a “Community of Practice”. 

Despite the recent media coverage on the alarming rise in counterfeit medicines, there is no reliable data on the real scale of this problem. During the workshop some estimates and studies were presented. For instance, it is estimated that 15% of the $1+ trillion in global sales in the developing world constitute a threat to patients. The situation is more dire in the poorest countries, where Interpol estimates that 30% of medicines circulating in Africa are either counterfeit or of inferior quality. A recent study by WHO on the quality of anti-malarial medicines in Sub-Saharan Africa revealed that 44% of samples from Senegal and 30% from Madagascar could “be qualified as of inferior quality”.  A representative from the Council on Europe commented that the value of counterfeits came to $75 billion in 2011.  However, no estimates were offered on substandard drugs.

While these estimates are important, the World Bank representative commented that there still is “no good data for the economic impacts of counterfeit drugs”. The USP representative, Patrick Lukulay, tried to address the economic impacts by explaining the major public health consequence that stem from drug resistance through the use of substandard drugs, which negate investments by donor agencies. Local manufacturers have a high barrier to overcome for investments in pharmaceutical capacity, because they face interest rates between 37-45% for access to capital.

Enforcement and tracking down the origins of counterfeits, is yet another obstacle in combating counterfeit drugs. The representative from the US Department of Trade credited this difficulty with the fact that 70-80% of the Active Pharmaceutical Ingredients (APIs) for global manufacturing is made in China and India. The WHO representative presented five reasons for this intricacy:

  1. lack of affordable medicines;
  2. lack of awareness in the healthcare work force;
  3. weak legislation and regulatory capacity;
  4. high corruption levels;
  5. and, a complex supply chain with greater Internet connectivity.

Despite the prevalence in discussing the complexities and difficulties faced, solutions were presented as well. Michele Forzley, a representative from Georgetown University’s law school, submitted a recommendation to have WHO add a new code to the International Classification of Diseases (ICD), which already has code for “injuries” that are unintentional (traffic accidents) and intentional (self-inflicted). A new code for harm caused by the use of counterfeit/substandard drugs could, for example, list the number of hospital beds being filled by patients with adverse reactions to counterfeits.

The representative from the Council of Europe discussed its formation of a unit called Medicrime. It is not intended for the protection of intellectual property; rather the unit is to protect victims from unscrupulous manufacturers of counterfeit drugs. If a false claim by a manufacturer is made, that is a crime. If the manufacturer by-passes regulatory authorities, then this is what Medicrime prosecutes. It criminalizes the illegal trade of counterfeits.

The USAID representative presented a paper on the various programs his agency has set in place to improve the quality of drugs in circulation by working closely with USP and the FDA to build competent regulatory authority capacity in the developing world. Murray Lumpkin and Lliza Bernstein discussed the new tools the Congress has given the FDA to ‘go global’ with its capacities to ensure the quality of medicines for patients’ use. This will permit the FDA to work more collaboratively with USP, USAID, Interpol, etc.

Overall, an important trend was outlined. In a 2005 Workshop on counterfeit medicines, the World Bank’s director of its health office commented that $30 billion was spent on fake drugs in the same year that only $8 billion was expended on legitimate health expenses. The upward trend is disturbing, especially when the University of Washington estimates 2010 donor financing for health aid at $26.9 billion; almost enough to cover the amount spent in 2005 on counterfeit medicines.

While this Workshop brought together key actors from the public and private sectors, one entity was missing in action: ministers of finance. Almost all pharmaceutical procurements require expenditures of scare foreign exchange which ministers of finance control. Most counterfeits escape custom duties and taxes.  Thus, not only are they losing these revenues, but they are procuring worthless products. They bring in huge indirect macroeconomic consequences of lower workforce productivity, early retirements, and disabilities when patients are harmed, incurring future unfunded liabilities.

In content and context, the Workshop was a contemporary reprise of another situation which captured the world’s attention: Houston, We Have a Problem! The global threat of counterfeits surely merits global, regional and national solutions through the establishment of a Community of Practice on this topic. In its absence, all the good that is being done can be undone.

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