Experts, Policymakers Debate Solutions For Counterfeit Products

A group of policymakers and other experts met this month in Geneva to discuss counterfeit and unsafe products and wrestled with possible balanced solutions to the problem.

The event was hosted by the United States mission and supported by the US Chamber of Commerce. It included US Ambassador to the UN Betty E. King, among dozens of others.

The 13 July event was called “Increasing the Flow of Safe Products Throughout the Global Supply Chain: Collaborative Solutions for Protecting the Health and Safety of Consumers and Patients,” a title that studiously avoided the difficulty in terminology in Geneva these days over the issue of counterfeits. [Correction: the Mexican ambassador was not in attendance as earlier reported.]

Yet the discussion turned, at least at times, to the key lines of the recent debates in Geneva.

But first Paula Nelson of Africa Matters, a London-based consultancy for businesses in Africa, spoke in strong terms about the ugly impact of counterfeit medicines, food and healthcare products, especially in developing countries. She said in many countries in Africa sick children have a 50 percent chance of receiving in place of legitimate vaccine, a substance that could kill them.

Nelson emphasised that generic versions of medicines are legitimate, and set her aim on “those who are out and out criminals” and knowingly commercially produce fake products. She said existing IP laws are inadequate to handle the broader problem, and existing institutions are ineffective because they lack capacity. She also said corruption is a problem, that there are no real deterrent penalties, and that those stocking and housing the fake goods should have greater liability too. No institution has “ownership” of the issue in many countries, she said.

Nelson also suggested the private sector could help more by encouraging registration of brands, filing complaints and assisting enforcement agencies, appearing in court to testify, supporting publicity campaigns and supplementing the budgets of national institutions.

Industry has for several years put its strongest anti-counterfeiting focus on the health and safety aspects of counterfeiting in order to gain more traction with the public, and have stressed their concern about the impact on consumers, not industry’s bottom line. Some at the event spoke about the need to look at the issue more broadly.

One developing country representative asked speakers whether there might be another way to address the problem than to rely more heavily on government on the front line of the anti-counterfeiting fight. The representative also said affordability is a significant factor as people who cannot otherwise afford a needed medicine may decide to risk violating intellectual property rights to get it. Finally, the representative said fair competition is needed, reflecting differing levels of development. Many regions do not have trademark protection yet, the representative said, giving an example of popular coffee with a very local name that could not be trademarked because someone in a developed country had already registered it.

Counterfeiting is generally understood to refer to a trademark violation, putting something made by someone other than the right-holder and without authorisation inside a label made to look like the original. But the concept has blurred in use to include problems of quality of fakes (which is not related to the trademark), and possible violations of patents too. The patent issue was highlighted by last year’s delays of shipments of legitimate generic drugs passing through Europe by members of the European Union. The private sector was called on by some to do more to help clarify the difference between legitimate generic products and counterfeits.

Another developing country representative said there was concern about mixing of the protection of brands and patents and the protection of life and public health, where patents may or may not be involved and may in fact impede access to the needed medicines.

A debate was held over whether medicines not containing what their label says they do belongs in a different category of violation from, say, fake Louis Vuitton bags. Medicines cannot be treated the same as handbags or even auto parts, a developing country official argued, as “they are totally different, and should be dealt with by different groups, different organisations.”

A developed-nation representative said all products for sale should be analysed to meet safety standards anyway, without regard to whether they have a counterfeit label or not. But another said there is not a quality and safety check and that every counterfeit product presents potential harm.

Nelson of Africa Matters summed up by saying that criminals produce “rubbish” made to look like either branded or generic products, and that in her opinion it does not matter where the solution comes from as long as it is achieved.

“If a fireman is saving me from a burning house I don’t care if he joined the force because he liked the uniform,” she said. “If what will motivate companies to join this fight is IPR so be it.” They are after all profit-oriented, she said.

A Technological Solution against Fakes

Alden Zecha, chief financial officer and head of strategy at Sproxil, described his company’s technology solution to fight counterfeit products in Africa and elsewhere. Already in use in Nigeria, they place a special label on products paid for by the manufacturer that identify that the product came from the manufacturer. The label has a scratch-off silver tab that reveals a code, which the buyer sends by text sms on a mobile phone to receive confirmation that the product is legitimate. Any phone will work and the system does not require much literacy, Zecha said.

The concept builds on the relatively widespread use of mobile phones in developing countries, and aims to raise the stakes for counterfeiters, which may help to discourage them – in addition to providing authentication for consumers. There are already more than one million labels in use Nigeria since the launch there early this year.

Pharmaceutical companies are willing to pay, Zecha said, because of the increased sales and certainty around their products. But the labels will work with any product, he said. Costs of the new labels vary depending on volume and design, Zecha said.

The accessibility for poor consumers of any new technology was raised by a participant, considering intellectual property rights on new designs and costs to recover research expenses.

Zecha told Intellectual Property Watch that so far there is no data to show whether the labels in Nigeria are having any impact on counterfeiting but he said increased sales suggest that some other products – perhaps counterfeits – may be being displaced. He also acknowledged that counterfeiters may try to find ways to fake the technology, but was confident his company would succeed in blocking them.

During the conference, it was asserted that the pharmaceutical industry’s only concern in fighting counterfeits is for the patients, with little mention of the profit incentive industry has in stopping fakes of their products. Industry was said to be open to helping governments find solutions, working with all of the stakeholders. The emphasis would be more on the national level than global, however, though industry continues to actively work within the World Health Organization context.

Another point during the conference was for the private sector to work harder to help clarify legitimate generics from counterfeits.

Aline Plançon of Interpol, a former Paris police officer who is co-chairing efforts at the World Health Organization against counterfeits, also spoke and encouraged all parties to keep a high level of engagement in the fight.

At the annual World Health Assembly in May, a strongly worded call was issued by many developing countries to extricate the police force from WHO’s internal activities (IPW, World Health Organization, 21 May 2010).