THE GLOBAL COUNTERFEIT

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• THE GLOBAL COUNTERFEIT
• MEDICINES PROBLEM
• AN INDUSTRY PERSPECTIVE
• Building International Co-operation
• to Protect Patients
• Geeta Thakerar
• GlaxoSmithKline
• 31st March 2008, Asia Pacific Economic
  Co-operation
• Life Sciences Innovation Forum Singapore

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The Counterfeiting of Healthcare Products

• A. The Issue
• Counterfeiting of medicinal and healthcare
  products represents an unacceptable threat to
  patients welfare
• Damages healthcare companies by involuntarily
  associating them with sub-standard and dangerous
  products
• Medicinal and healthcare products in high demand,
  easily transportable, particularly attractive to
  counterfeiters

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• Research-based companies are dedicated to
  fighting disease by bringing innovative medicines
  to patients worldwide and to healthcare providers
  who serve them, commitment to best possible
  standards of product quality
• No such thing as a good counterfeit
• Any counterfeiting of a medicinal product is
  unacceptable products manufactured and/or
  packaged outside properly controlled channels
• Fake medicines can kill people either poison
  them or do not help to cure or immunise them so
  they die of the disease they have or contract
  (e.g. patients may not respond as quickly or not
  at all to the medicines, counterfeit antibiotics
  can reduce protection give no protection and
  increase resistance to infections)

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No such thing as a good counterfeit
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Source WHO
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Ultimately...
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• The pharmaceutical industry has a role to play in
  helping to minimise the counterfeiting of
  medicinal products and committed to a
  comprehensive programme of action against
  counterfeiting
• However, industry cannot tackle this issue alone
• Prevention and detection of counterfeits is
  primarily a matter for national governments
  worldwide
• There must be recognition of dangers associated
  with the practice and ensure effective regulation
  by the relevant authorities
• dangers of counterfeiting are increasing in these
  days of globalised trade

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Counterfeit statistics - manufacturing

• China 77
• India 10
• Taiwan
• Pakistan

Source GSK Internal
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Counterfeit distribution markets

• China 44
• UAE 6
• Pakistan
• Brazil
• India
• USA
• Bangladesh

Source GSK Internal
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The Counterfeiting of Healthcare Products

• B. Adverse Health Effects of Counterfeits
• Counterfeit drugs can be more dangerous than
  narcotic drugs
• Counterfeits are never safe to use
• - Counterfeit medicines are rarely as efficacious
  as genuine ones, not manufactured under same
  strict conditions of quality control, safety and
  hygiene. Patients taking them exposed to unknown
  risks.

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• Counterfeits deceive patients
• Patients buying or being given counterfeit
  medicines are unlikely to know that what they
  have is not genuine and could be harmful. There
  is no question of a consumer making an informed
  decision to buy a fake medicine.
• Counterfeits destroy confidence in healthcare
  systems
• - Public confidence in pharmacists,
  doctors/nurses who unwittingly distribute
  counterfeit medicines, can be damaged by
  counterfeit medicines. Such a loss of confidence
  harms patients and the public as much as the
  healthcare system.

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• C. Key Drivers of Counterfeiting
• Monetary Gain
• - Low manufacturing costs and high profits for
  fake medicines attract criminals who use their
  manufacture and distribution as an easy way to
  make money.
• Lack of Legislation and Proper Enforcement
• - Counterfeiters can easily escape detection and
  prosecution.
• Weak National Drug Regulatory Enforcement
• - Counterfeiters can remain unpunished.

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• Feeble penal sanctions
• In contrast to harsher sentences for narcotic
  drug pushers allows counterfeiting to grow
• Financial penalties factored into overheads by
  counterfeiters.
• Transactions involving many intermediaries -
  Medicines passing through many intermediaries, or
  there are several paper transactions,
  opportunities for counterfeiters to insert their
  products into the system increases.
• Free Trade and Deregulation
• Facilitating trade within and between countries
  (increased use of the internet) gives
  counterfeiters greater scope to introduce fake
  products into official distribution channels
• Consumers become used to seeing variety of packs,
  less wary of counterfeits.

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• Lack of Co-operation between Stakeholders
• - Where regulation authority, customs, police,
  government, healthcare system and industry do not
  co-operate properly, easier for counterfeits to
  escape detection, arrest and penal sanctions.
• Lack of Political Will
• - Some governments regard counterfeiters as
  legitimate employers of local labour, exports
  seen as economic benefit.
• Consumer / Patient Ignorance
• - Recognising a counterfeit product is usually
  very hard.

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• D. Industry Response
• The Industry aims to protect patients worldwide
  from counterfeits, take appropriate steps to
  safeguard public health
• GSK for example
• Rigorously investigates and where appropriate
  takes legal action against manufacturers,
  distributors, retailers and other parties
  involved in counterfeiting GSK medicinal and
  healthcare products
• In countries where counterfeiting is prevalent,
  product and packaging incorporate features that
  discourage the manufacture of counterfeits and
  help detection
• Condition of GSK business that wholesalers must
  report suspected counterfeit

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• (iv) Procedures to apply controls to the sale and
  disposal of GSK products, manufacturing
  equipment, packaging and other materials used in
  production
• Close co-operation with pharmacists, wholesalers
  and other pharmaceutical companies to ensure
  suspected counterfeiters and their intermediaries
  are thoroughly investigated and, where
  appropriate, prosecuted
• Anti-Counterfeiting Action Groups operating as
  much as possible cross-functionally established
  at corporate and regional levels who have
  responsibility to take appropriate measures to
  identify counterfeits, trends, investigate
  incidents and enforce rights
• All GSK markets products must incorporate at
  least 1 anti-counterfeiting feature to enable
  authentication in accordance with group quality
  guidelines

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• (viii) Detailed internal guidance on
  anti-counterfeiting procedures are in place
• Regular training provided to internal customer
  groups including marketing / sales
  representatives raise awareness generally and
  help give leads
• Prevention including Due Diligence, such as
• background checks carried out prior to conducting
  any business
• essential to satisfy yourself that the customer
  will honour any contract or agreement
• ensure as a maximum three stages in the supply
  chain process
• Secure disposal of waste product and packaging.

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• Signals to watch out for include
• Product not usually sold in area or at that
  location
• Sudden unexpected drop in sales / off-takes
• Prices of GSK products lower than GSK prices
• Availability of larger numbers of samples
• Medicines in plastic bags or envelopes with no
  warnings or directions for use
• Imperfect packaging
• Regulatory authority complaints not of standard
  quality
• Accompanying documents not correct or accurate
• Report of counterfeits
• Guidance on making test purchases gathering
  evidence.

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• (xii) Actions
• Report detection
• Introduce overt and covert anti-counterfeiting
  features and update regularly
• Try to purchase samples pursuant to test
  purchase guidelines
• Stay vigilant at all times
• Waste collection scheme from hospitals - control
  recycled vials
• On ground knowledge of areas prone to
  counterfeiting by conducting market sweep of
  products
• Spread awareness amongst stakeholders including
  consumers
• Ensure contracts with 3rd parties are clear on
  obligations, relevant policies and train up
  distributors, contract manufacturers.

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Difficulties in Prosecution

• Lack of awareness among police about the offence
  and the procedure
• Unwillingness of the enforcement agencies to take
  action
• Punishments do not have a deterrent affect more
  stringent punishments needed
• Accused out on bail within a very short span
• Incase of criminal actions for trade mark
  infringements in India for example, the opinion
  of the Registrar has to be taken which cripples
  the process

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To effectively combat counterfeit medicines

• Appropriate medicine policy, legislation and
  enforcement strategies
• Government commitment to combat counterfeits
• Strong drug laws vs counterfeits (with
  enforcement)
• Proper regulation of drugs
• Training of personnel (including enforcement
  officers, judges)
• Fostering intra-agency co-operation
• Participating in international collaborations
• Shared responsibility
• Government, Consumer, Industry

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Country Case Example Philippines

• The Philippines one of the few countries with
  counterfeit medicine specific legislation
• Republic Act 8203 or the Special Law on
  Counterfeit Drugs was passed in 1996
• RA 8203 has definition of Counterfeit Medicines

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• Drug products refilled in containers by
  unauthorised persons if legitimate labels or
  marks are used
• an unregistered imported drug product, except
  drugs brought in-country for personal use as
  confirmed and justified by accompanying medical
  records
• a drug which contains no amount of or a different
  active ingredient or less than 80 of the active
  ingredient it purports to possess as
  distinguished from an adulterated drug including
  reduction or loss or efficacy due to expiration

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• the drug itself or the container or labelling
  thereof or any part of such drug, container or
  labelling bearing without authorisation the
  trademark, trade name or other identification
  mark or imprint
• How are Counterfeit Drugs Distributed?
• through both legal and illegal drug channels
• a factor that helps counterfeiters is poor
  jurisdiction over pharmaceutical distribution
  with wholesalers, distributors and pharmacies and
  village shops buying, selling and re-selling
  through unofficial channels, often with no proof
  of the medicines authenticity.

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Top 5 Counterfeited Medicines in Philippines

• Anti-hypertensive
• Anti-Asthma
• Analgesic
• Anti-diarrhoea
• Vitamins

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• Who is buying Counterfeits?
• The poor, particularly in rural areas
• often cheaper than the genuine products
• public uneducated and do not give much thought to
  the quality of what they are buying.
• Counterfeits usually sold at little stores that
  stock a wide range of goods
• the stallholders have no training in
  pharmaceuticals and often do not know they are
  selling fake goods
• they buy from travelling salesmen who explain
  lower price by saying medicines obtained from
  wholesaler or from cheaper sources, often from
  abroad.

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• How bad is the situation in Philippines?
• In 2003, the Philippines Bureau of Food and Drug
  (BFAD) reported that 30 of drugstore outlets
  visited by food and drug regulation officers
  carry and sell counterfeit drugs (most recent
  statistic not available)
• BFAD tries to fight problem, but like many public
  services, it suffers from lack of funds and lack
  of manpower
• A principal problem is that surveillance and law
  enforcement of counterfeit trade are poor
• major outlets such as Mercury Drugs are checked
  regularly, but that is not where the problem
  lies. Counterfeits are sold in both licensed as
  well as unlicensed outlets such as market stalls
  and small retail stores. (Note BFAD do also run
  checks on the smaller outlets.)

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• Issues on Enforcement Prosecution
• Surveillance and law enforcement of counterfeit
  trade are poor
• most law enforcements officers are not trained to
  determine counterfeits from genuine products
• BFAD lacks manpower to monitor and sanction
  establishments that carry counterfeits
• BFAD lacks police power which compounds problems
  on enforcement.

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• Difficulty in prosecuting cases of parallel
  import drugs
• parallel imports which are an unregistered
  imported drug product considered counterfeits
  based on RA 8203s definition
• however, judges are hesitant to convict accused
  for violating RA 8203 if the products involved
  are parallel imported drugs
• the issue is untested yet at the Supreme Court

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In summary

• Tighten up internal processes
• Collaborate with industry advocates
• Proactively work with government agencies
• Involve the consumer

Persist !
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Thank You !