Counterfeit Medicines In WTO Dispute Process, Heating Up At WHO

The international policy debate over counterfeit medicines and legitimate generics escalated today. Brazil and India took the first step in the World Trade Organization dispute settlement process for treatment of generics medicines falsely labelled counterfeit in Europe, and non-governmental organisations from both sides of the issue issued new releases stating their positions on the issues at the neighbouring World Health Organization.

Counterfeit medicines are on the World Health Organization’s official agenda next week for the first time in a year and a half.

India and Brazil filed requests for consultations with the European Union and the Netherlands over the seizure of generics medicines in transit through Europe. This is the first step towards a dispute settlement case, and if issues cannot be resolved via consultations then formation of a dispute settlement panel could be requested in the coming months.

“These seizures seem to emanate from complaints made by patent holders in Europe,” said Ambassador Ujal Bhatia of the Indian mission at a press conference today, adding India is concerned both “that IP issues are being raised on drug consignments while they are absolutely not merited” and that there is a pattern of “efforts to confuse the IP issues with those of substandard or spurious medicines” taking place at a number of international fora.

Meanwhile, nearly 50 public health non-governmental organisations have sent an open letter dated 11 May [pdf] to WHO Director General Margaret Chan urging the WHO to find terminologies and partners in the fight against dangerous medicines that are more public health-oriented than intellectual property-oriented. A few weeks ago, a smaller group of NGOs sent a similar letter to the UN Special Rapporteur on the Right to Health, Anand Grover.

The International Federation on Pharmaceutical Manufacturers and Associations today released ten principles on counterfeit medicines [pdf], among which is that “patents have nothing to do with counterfeiting and counterfeiting has nothing to do with patents.”

The Third World Network is in the process of completing a briefing paper that will detail statistics on and specific instances of the misuse of the word counterfeit to serve goals other than protection of patients. The paper also raises concerns about a task force within the WHO dealing with counterfeit medicines.

Background

‘Counterfeit’ is a term of art under the World Trade Organization Trade-Related Aspects of Intellectual Property Rights agreement, where it is defined as use of a trademark or mark similar to a trademark without the permission of the rights holder. It is feared that use of this term in relation to medicines will create confusion and risk prioritising IP enforcement over public health.

A group called the International Medical Products Anti-Counterfeiting Taskforce (IMPACT) at the WHO that has been working on a strategy plan to combat “counterfeit medical products,” has also come under fire from developing countries and civil society groups for having too many ties to those advocating a stronger level of IP enforcement.

At the 2009 Executive Board meeting – which provides recommendations to the WHO’s decision-making World Health Assembly – an explosive debate broke out over an IMPACT report on counterfeit medicines (IPW, WHO, 27 January 2009). This was the last time it was formally discussed. More recent, informal meetings indicate member state convergence on the issue has not yet been achieved (IPW, WHO, 31 March 2010).

WTO Dispute over Trade Delays

Fears of IP/health confusion were fanned last year when several shipments of medicine en route from India to other developing countries were detained in transit through Europe on the grounds that they violated IP rights. They were not destined for European markets.

At issue is EU regulation 1383/2003, which allows for goods suspected of patent infringement to be delayed at customs (IPW, WTO/TRIPS, 5 June 2009).

India takes accusations of spurious medicines seriously, and would take action against companies shipping them, said Bhatia, but to date Europe has provided no information that these delayed shipments were cases of dangerous drugs.

But the delays have had their effect.

While there were no seizures in 2009 headed to Brazil, companies within the country are being prudent and importing medicines via routes that avoid Europe, said Ambassador Roberto Azevedo of Brazil, speaking at the same press conference. One of the consequences of this is that prices increase which “defeats the purpose of having lower cost generic medicines.”

The European Union has in the past told Intellectual Property Watch that there have been no recent seizures, and that as a result they consider the problem solved. They also draw a distinction between “seizure” and “delay,” saying that the latter is acceptable to accommodate procedures that are intended to protect public health.

Bhatia said there had been one seizure in Frankfurt in May 2009 and one in Paris in October. And, argued Bhatia, until regulation 1383 is removed, there will always be the threat of delays. This situation “causes lack of predictability and increased cost of medicines at destination markets,” said Azevedo, and a formal statement from Brazil adds it has had a “highly negative systemic impact on legitimate commerce.” Bhatia added that distinctions between delays and seizures “are in the nature of sophistry” as the impact is the same – disturbance of trade.

The EU “remains fully committed to ensuring that people in the world’s poorest countries can access affordable medicines,” said EU Trade Spokesperson John Clancy, later. The EU has “already signalled its intentions to modify its legislation to the extent necessary to clarify the procedures relating to medicines in transit” and is “confident that a dispute on this issue will not be necessary.”

Thiru Balasubramaniam, Geneva representative for non-governmental group Knowledge Ecology International, said in a statement today that the issue also involves the protection of goods in transit, and whether IP claims may be pursued against them even if they are legitimate goods in countries of origin and destination.

NGOs to Chan: Public Health must Outweigh IP

The conflation of IP and health has already had effects, said the new letter from public health civil society groups.

And in the East African Community, Kenya, Tanzania, Uganda and other places several anti-counterfeiting legislations “have been or are in the process of being enacted,” said a copy of the Third World Network draft briefing paper seen by Intellectual Property Watch. Ostensibly these laws are aimed at health, says the open letter, but in reality they are “only about protecting the rights of IP holders to the detriment of access to affordable generic pharmaceuticals.”

The letter also raises questions about IMPACT, in particular the “central role played by the IFPMA” in IMPACT’s work, which the letter says addresses IP violations rather than the root causes of low quality drugs. “We are of the view that WHO’s continued involvement in IMPACT threatens to undermine WHO’s credibility as an organization that is impartial and that upholds the interests of public health,” it said.

Médecins Sans Frontières (Doctors Without Borders) also plans to make counterfeit a focus next week, the group said in a letter to press. A “vague definition of counterfeit” can block access to needed medicines, they said, adding there are “worrying signs” in Kenya, Uganda, Tanzania, Rwanda and Burundi. And there is a joint Third World Network statement with non-governmental group Health Action International calling on WHO to refocus efforts on wider public health threats, like the high cost of medicines.

Protecting Patients through New Anti-Counterfeiting Principles

But IFPMA President Haruo Naito in a press release today said, “this is not about commercial interest; this is about protecting patients, and we stand ready to be an active partner in WHO-led efforts, including IMPACT.” IFPMA announced ten new Principles on Counterfeit Medicines that should “re-focus” the issue and clarify the stance of brand-name manufacturers on drugs.

Counterfeiting, says the principles, is a “crime against patients” and international trade in counterfeits must be halted, including through use of border measures to stop trade. Substandard drugs are not the same as counterfeits, they said, but “by their nature” counterfeit drugs are “at a high risk of being substandard.”