pharmaceutical counterfeits

Why Counterfeits in the pharmaceutical industry will prosper if there is no policing

Technological inventions, especially in the drug/pharmaceutical industries take more attention hence the importance of knowledge of how counterfeiting companies operate.

Our previous articles dealt with clinical trials and the laws/regulations that govern how medics must handle human subjects while carrying out clinical trials. This is where drugs are confirmed effective.

But there is a world away from legitimate pharmaceutical companies that thrives on counterfeiting drugs. This world is organised and has the most important factor keeping it in business: a ready market.

Why counterfeiting pharmaceutical drugs will increase

We have already noted that the Industrial Property Act (IPA) [2014] (Uganda) is the mother law governing Intellectual Property in this field. We also know that only drugs that are *novel, with an *inventive step and are *industrially applicable are the drugs that receive patent protection.

Still, we should examine how the counterfeiting industry in the medical world thrives.

  • Costly Research and Developing schemes in the pharmaceutical industry

The drugs over the counter have gone through a research and development process where scientists are confident in the drug properties they contain to treat certain ailments.

If the cost of improving or manufacturing new lines of drugs is high, counterfeiting will definitely increase because it serves an available market of poor communities.

True, financially able nations and economically stable industrial regions invest more in drug development. However, so do the counterfeiting companies. Their ready market, among poor communities, boasts of the largest and desperate population.

  • Relaxed and sometimes limited government intervention in the medical industry

Under its responsibility to provide drugs to the people, the government is forced to outsource supply from relatively cheaper markets abroad.

The government will also exploit the generic drug industry in other countries like India. In so doing, it may not effectively regulate the sources of imported drugs.

With this loophole, it is easy to sway the population away from government distributed drugs and therefore give liberty to counterfeits to sell theirs.

  • The stringent international policies on intellectual property applications

The African Regional Intellectual Property Organisation (ARIPO) and the World Intellectual Property Organisation (WIPO) serve the same purpose. The former serves in Africa and the latter, the world.

Before any drug is patented, it must undergo several trials and tests. After these offices have carried out their findings (often from certified pharmaceutical boards) on the viability of the drugs, the drugs are placed on the market under patents.

Regrettably, few African made drugs meet the threshold. Some are given utility models (see below) while others are denied protection. However, limited resources hinder government policing on these drugs meaning that they may continue to operate underground.

Those confirmed give counterfeits the confidence to copy the processes and chemical composition of patented drugs. Sometimes, they create a real product similar to that of the patented drug. Often, their creations are dangerous.

  • The Law

*Sections 66 and 67 of the IPA provide for legal measures against counterfeiting patented inventions (where scientific products fall).

Under Section 66, the government or third parties authorised by the government are allowed to exploit patented inventions.

*Sec.66 (a), the law touches on the element of public interest, in particular, national security, nutrition, health, environmental conservation, national emergency or the development of other vital sectors of the national economy’ which factors influence the manufacture of patented versions of medical products by states once approved by the patent holders.

Counterfeits also exploit this route.

We have noted that the population in most developing countries cannot afford the cost of medical attention and hence vulnerable to the counterfeit industry.

Unlike the generic versions of drugs (cheaper drugs) that act almost exactly as the patented drugs, counterfeit drugs prolong the epidemic by suppressing the healing process of the disease while creating more diseases.

And under *Section 66 (b), public interest should not undermine the importance of patents in the pharmaceutical world. Patent holders earn from sales of their product, hence the need to first acquire permission to develop generic versions of their patented drugs.

Counterfeits do not comply with this provision.

Because they copy the process of manufacturing the patented drug without authorization from either the government or patent holders, they create their assumed versions.

They overlook the need for compliance to intellectual property rights causing financial loss to the patent holders (unfair competition) and also creating mistrust in governments that produce generic versions.

Once the patent holder feels his/her/its intellectual property is not protected, he/he/it is at liberty to prohibit the government from manufacturing generic version of the patented drug.

  • The presence of Utility Models

Part XII of the IPA [2012] (sections 68-70) provides for utility models. These are substitute to patent and do not yield patent protection. Unlike patents, they only have two forms of elements in them: *novelty and *industrial application. They last only 10years.

Utility models are defined as:

‘…any form, configuration or disposition of element of some appliance, utensil, tool, electrical and electronic circuitry, instrument, handicraft mechanism or other object or any part of it allowing a better or different functioning, use, or manufacture of the subject matter or that gives some utility, advantage, environmental benefit, saving or technical effect not previously available in Uganda; and includes microorganisms or other self-replicable material, products of generic resources and herbal as well as nutritional formulations which give new effects’ [emphasis added].

Utility models serve an interesting position in the region’s medical industry.

For long, the region has relied on herbal medicines and only adjusted to modern medicine after an influx of stronger strains of disease.

Science has not conclusively decided on the dosage of herbal medicines and therefore feels that such reason; and the availability of a vast oral administration and knowledge of herbs cannot be patented.

Unless a smart scientist comes up with a sophisticated process of; and eventually a product from herbal remedies, local medical professionals will have to settle for utility models. Suffice to say that counterfeits will have a field day swindling unsuspecting desperate patients.

Conclusion

Counterfeiting pharmaceutical drugs will continue as long as the cost of developing drugs and new strains of medicine to counter the adverse drug effects from counterfeit drugs is high.

Equally, the cost of compensating patent holders will continue fueling counterfeit drugs, especially in developing countries.

Therefore, it is up to developing countries like Uganda to tighten their implementation laws, contribute in research and development of original and generic versions of patented drugs from donors. Counterfeits will rethink business.

BY ATUHAIRWE AGRACE

This article appears in our digital law newsletter, The Deuteronomy Vol 6, Issue 4 of June 23rd, 2017

To receive The Deuteronomy in real time, click HERE

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