Counterfeit and Falsified Medicines in the EU

By Vishv Priya Kohli, Ph.D., Associate Professor, Copenhagen Business School, Denmark

Counterfeit and falsified medicines are not just a problem of the Asian and African continent but are a real threat in the European Union (EU) as well. In the past fifteen years, three major Operations were undertaken to investigate counterfeiting and falsification of medicines within the EU. Each operation consists of several cases running simultaneously, within the EU region as well as abroad. Up until a decade ago, it was believed that the drugs that were targeted for the purpose of counterfeiting and falsification were mainly life-style medicines, such as diet pills. However, over the past decade, it has become apparent that life-saving prescription only medications are also targeted.

In 2009, the Medicines and Healthcare products Regulatory Agency (MHRA) led Operation Singapore, that investigated counterfeiting of life saving medicines, such as Plavix, Zyprex and Casodex, which are used for treatment of psychosis, heart disease and prostrate cancer. In 2011, the Swedish Customs Authority lead Operation Robin and uncovered counterfeiting and falsification of prescription as well as over-the-counter medicines. The medicines included Alprazolam, Stanozolol, and Pyrazinamid, which are used for treatment of anxiety, panic disorder, hereditary angioedema, and tuberculosis. The investigations revealed that three websites were specifically created to market these counterfeit products. Another Operation called, ‘Operation Volcano’ was led by the Italian medicine’s agency in 2014, which concerned the falsification of Herceptin, a drug commonly used for treatment of breast cancer.

Even though there are diverse ways in which a medicinal product can be falsified, research shows that there are some common patterns that have emerged. In context of the medicinal product, it has become evident that at times, the entire product can be counterfeit including the content as well as the packaging. However, at times, the packaging is authentic, but the contents can be falsified. For instance, Operation Volcano revealed that the packaging was authentic but the product inside was falsified. Another common trait that has emerged is that it is not uncommon for the illegal supply chain to infiltrate the legal supply chain. The illegal supply chain runs parallel to the legal supply chain and both supply chains supply medicines to the consumers. At time, the consumers deliberately purchase from the illegal supply chain. This would typically happen when the consumer is desperate and the medicine the consumer is looking for is not available in the legal supply chain. However, there is also evidence that indicates that when the illegal supply chain infiltrates the legal supply chain, the counterfeit medicine can end up in the hands of an unsuspecting consumer.

In order to infiltrate the supply chain, falsified authorization certificates have been used in at least two of the above-mentioned Operations. It is important to recognize that the legal framework requires each participant dealing with pharmaceutical products to be in possession of an authorization certificate to lawfully handle the pharmaceutical products. However, the authorization certificates can and have been known to be falsified and the rampant use of fake authorizations certificates have been instrumental in the infiltration of the legal supply chain.

In addition, evidence suggests that many counterfeiters use online media including websites, Instagram, and other social media to sell counterfeit and falsified medicines, as was revealed in Operation Robin. In this particular case, three websites were specifically created to offer counterfeit products.

The EU legal framework does provide certain tools to combat counterfeit and falsified medicines. For instance, in 2011, the Falsified Medicines Directive (2011/62/EU) came into being. It contains several measures specifically targeting prevention of falsified medicines surfacing in the legal supply chain within the EU. As a result of the Falsified Medicines Directive, a new regulation for an EU wide logo to be carried by all outlets selling pharmaceutical products came into being in 2015. While on the one hand, these measures are well-intentioned and do contribute significantly to address the problem of counterfeiting and falsification of medicines within the EU, the challenge of falsified and counterfeit medicines exists not only within the realm of medicine law. Counterfeiting is an issue of Intellectual Property law as well. Since, the owner of the brand that manufactures, markets, and sells the medicinal product is also affected when an alleged act of counterfeiting occurs, an act of infringement of the brand or violation of Intellectual Property Law also takes place at the same time. For addressing this aspect, the Customs Regulation (Regulation 608/2013) concerning customs enforcement of intellectual property rights as well as the Enforcement Directive (Directive 2004/48/EC) on the enforcement of intellectual property rights are usually employed. Besides, Medicine law and IP law, the realm of Criminal law also comes into play, especially when the perpetrators of the crime are supposed to be penalized for the crime they have committed. As there is no harmonization of criminal law at the EU level, the punishments that are levied remain a matter of the Member State addressing the case.

One of the key findings, thus, is that the problem of counterfeiting and falsification of medicines lies at the intersection of three different streams of law, viz., Medicine law, Intellectual Property law, and Criminal law. Any effective solutions to the problem will also require a synergetic effort of the authorities representing the three streams of law, such as the Medicines Agencies, the police force as well as the customs authorities.

Research also illustrates that the artificial compartmentalization in addressing ‘counterfeiting’ as part and problem of IP law and ‘falsification’ as a matter to be tackled under medicine law is defeating the purpose of reducing, if not eliminating the problem. In fact, counterfeiting and falsification of pharmaceutical products are largely, two sides of the same coin. Every time a branded products gets copied; it is a violation of Intellectual Property as well as a violation under the Falsified Medicines Directive.

Counterfeiting of medicines not only affects the health and safety of individuals, but it also has serious consequences on the economy and innovation. In the interest of securing the health-related infrastructure, it is imperative to re-think the strategy of dealing with counterfeit and falsified medicines within the EU.