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Civil Society Appeals for an Extension on Standards for Intellectual Property Rights on Medicines

Uganda –Kampala —Civil society Organizations working on health and access to medicines have today appealed to His Excellence Ambassador Christopher Onyanga Aparr the Permanent Representative to the Permanent Mission of Uganda to the United Nations in Geneva to lead Least developed County (LDC) members of the World Trade Organization (WTO), to act collectively to submit a duly motivated request to the Council on Trade Related Aspects of Intellectual Property (TRIPS) for an indefinite extension of the soon-to-lapse pharmaceutical transition period at the upcoming TRIPS Council meeting on 24th February, 2015.

According to a 2002 WTO TRIPS Council decision, member countries of the WTO considered to be least developed are exempted from enforcing patents and data protections on Pharmaceutical products for until 1st January 2016.

Intellectual properties such as patents raise the costs of medicines because patent holders can eliminate competition which would otherwise lead to cheaper prices. Global studies, including the MSF, Untangling the Web of Antiretroviral Prices routinely show that generic medicines are almost always priced lower than even the discounted prices drug companies sometimes offer to lower-income countries like Uganda.

In a letter dated 16th February, 2014 civil society groups recalled Article 66.1 of the TRIPS Agreement which provides to the effect that the Council for TRIPS “shall, upon duly motivated request by a least-developed country Member, accord extensions”.

In this appeal, the groups are of the view that the extension of the transition period be for as long as an LDC Member State remains a LDC, without conditions, and that it should further motivate waivers of Articles 70.8 and 70.9 to the General Council, also for as long as an LDC Member State remains an LDC. The detailed letter can be accessed here>>

ACTA may be dead… but not yet buried

Raphael Vassallo
Opponents of the controversial ACTA legislation were in full celebration mode this week, following what many believe was a definitive rejection of the law by the European Parliament.

The EP rejected the controversial Anti-Counterfeiting Trade Agreement (ACTA) on Thursday, in a 478 to 39 vote with 165 abstentions: after the European People’s Party (EPP) unsuccessfully attempted to delay the decision.

The EPP’s proposed postponement was rejected in a 420 to 255 vote, with nine abstentions.

But while activists loudly proclaimed the resulting ‘death’ of ACTA, newswires were considerably more prudent in reporting the event. ACTA, we were told, was not quite ‘dead’, but rather on ‘life support’. For while the EP has now rejected the law in its present form, the European Commission is still awaiting a ‘verdict’ from the European Court of Justice regarding the legality of the law itself – suggesting that the final act in the ACTA saga may not be over yet.

Earlier this year the Commission had referred ACTA to the ECJ, with a view to determining ACTA was incompatible “in any way – with the EU’s fundamental rights and freedoms, such as freedom of expression and information or data protection and the right to property in case of intellectual property”.

EC representative to Malta, Martin Bugelli, confirmed this week that the Commission is still awaiting the results of the Court’s inquiry: “Citizens and the Parliament have raised concerns over the potential impact of intellectual property rights on other fundamental rights,” Bugelli told MaltaToday. “This is why the Commission will continue to wait for the opinion of the European Court of Justice and study it closely. The Commission would also discuss the outcome of the Court referral with other signatories of ACTA and would then consider further steps to take.”

However, critics of ACTA have all along argued that the reason for the original referral to the ECJ was to sidestep the European Parliament.

European Commissioner for Trade De Gucht had even hinted that the Commission’s referral was intended as a insurance policy against possible rejection by the EP: according to minutes of a Heads of Cabinet meeting in February 2012 (made public by European Digital Rights, an NGO aiming to protect freedom of expression in the internet) the European Commission was profoundly impressed by popular opposition to ACTA, and described the “strong mobilisation” against the agreement by “certain NGOs and movements active on the internet” as a “problem” for the European Commission.

EDRi reported that “the increasing opposition to ACTA on the streets and among Member States created a very real possibility that the European Parliament would vote ‘no’ to ACTA in June, effectively killing it”.

The Commission’s referral to the ECJ was interpreted as a pretext to keep alive the possibility of a revised version of ACTA, in case the Parliament went on the reject the law: as in fact happened this week.

But why is the Commission so keen to keep ACTA alive in the face of such overwhelming opposition by European citizens? Leaving aside conspiracy theories along the lines that that the EC is in collusion with major corporations to maximise profits – or, more sinister still, that it has an interest in curtailing internet freedom in a bid to exert more control over the masses – the ‘official’ reason for Europe’s insistence on an international anti-counterfeiting agreement has much more to do with safeguarding European businesses against unfair competition.

The controversy itself may have revolved mainly around privacy and personal liberty issues: but lurking in the background was concern with competition from China: namely, to protect Europe’s prime resource – its intellectual property – from being eroded by counterfeit products flooding European markets.

Bugelli admits that this was and remains a primary concern for the Commission. “Seeking protection for European creators and enterprises, and pursuing a more level playing field with other global players, was indeed one of the main aims of the proposed Agreement. That was precisely why it was important to have non-EU partners around the same table to play by the same rules.”

He also concedes that the vote against ACTA will be “a setback for the protection of our intellectual property rights around the world.

“As the Trade Commissioner De Gucht said in Parliament this week, other countries may read in this rejection as a reduced commitment by the EU to protect intellectual property rights and to enforce the rights of its industries and artists around the world.”

Bugelli adds that efforts to stave off illegal competition to the detriment of European resources will not be completely sidetracked by the defeat of ACTA in the EP.

“European competitiveness on the global stage remains on top of the agenda of the European Commission, and it will continue to seek ways to enhance it.”


MEPs finally reject ACTA copyright treaty

By Stewart Mitchell

The European Parliament has rejected the Anti-Counterfeiting Trade Agreement (ACTA), drawing a line under a proposed law that has caused bitter debate for years.

ACTA started life behind closed doors as global rights holders and politicians looked to address intellectual property issues online.

European regulators held a key hand in the process, effectively signing – or not signing – on behalf of member states. Today MEPs voted overwhelmingly against the agreement, 478 to 39.

“This is a major victory for citizens and organisations who worked hard for years,” said campaign group La Quadrature du Net in a statement. “On the ruins of ACTA, we must now build a positive copyright reform, taking into account our rights instead of attacking them.

“The ACTA victory must resonate as a wake up call for lawmakers – fundamental freedoms as well as the free and open internet must prevail over private interests.”
Read more: MEPs finally reject ACTA copyright treaty | News | PC Pro

What’s a counterfeit? And how many counterfeit drugs are there?

Donald McNeil has an article in the New York Times that appeared in print on May 22, 2012 (page D6 of the New York edition) with the headline: “Malaria: Fake and Substandard Drugs Grow as Threat to Fight Disease.” A web version is available here:

Unless I missed something, the web based version of the story does not seem to accept comments, but I wanted to make a few comments, hence, this blog.
First, when Donald said:

“About a third of the drug samples from both continents failed. Some were clearly criminal counterfeits, some were expired drugs that had been repackaged and some were poorly made with too little active ingredient”

I was immediately interested in how many were actually counterfeit, as opposed to having false information on the label, or being of low quality. For political reasons, PhRMA and the Chamber plays up the counterfeit angle quite a bit, to justify a very broad intellectual property right enforcement agenda, by mixing together the counterfeit, falsified, substandard or fake drug categories.

The NYT article was reporting on a new study published in the June issue of Lancet Infectious Diseases (Volume 12, Issue 6, Pages 488 – 496, June 2012, doi:10.1016/S1473-3099(12)70064-6). The article is available, for free, here, with the title “Poor-quality antimalarial drugs in southeast Asia and sub-Saharan Africa.” The authors are Gaurvika ML Nayyar, Joel G. Breman, Paul N. Newton, and James Herrington. According to the study:

Of 1437 samples of drugs in five classes from seven countries in southeast Asia, 497 (35%) failed chemical analysis, 423 (46%) of 919 failed packaging analysis, and 450 (36%) of 1260 were classified as falsified. In 21 surveys of drugs from six classes from 21 countries in sub-Saharan Africa, 796 (35%) of 2297 failed chemical analysis, 28 (36%) of 77 failed packaging analysis, and 79 (20%) of 389 were classified as falsified.

The term counterfeit appears 9 times in the body of the article, and 22 times in the 83 footnotes. However, what the authors mean as counterfeit is a broader category of falsified drugs, including cases where any information about the drug is false, including such items as the expiration date or ingredients, wholly independent of any perceived infringements of trademarks or any other intellectual property rights. From the article:

Definitions of drug quality
We obtained data for samples in two categories: drugs failing chemical assay analysis and drugs failing package testing; these categories were not mutually exclusive. No universally accepted definitions exist for the different types of poor-quality drugs and national terminologies are diverse. Some nations, and some of those involved in intellectual property law, are concerned that the word counterfeit could wrongly lead to the classification of some legitimate generic drugs as such, thus creating much debate about terminology.16 WHO’s executive board documents use the undefined and unwieldy term spurious/falsely-labelled/falsified/counterfeit medical products.17 As a simplified and neutral term, we use falsified as a synonym for counterfeit, devoid of considerations of intellectual property. We classify poor-quality drugs into three main types: falsified (fraudulently manufactured with fake packaging and usually no or a wrong active pharmaceutical ingredient); substandard (products resulting from poor manufacturing with no intent to deceive, usually with inadequate or too much active pharmaceutical ingredient); and degraded (good-quality drugs that are degraded by poor storage after leaving the factory).

The authors consider the WHO term of “spurious/falsely-labelled/falsified/counterfeit medical products” to be “undefined and unwieldy,” and assert that it is “simplified and neutral” to “use falsified as a synonym for counterfeit, devoid of considerations of intellectual property.” The authors also endorse a plethora of possible remedies to address the problems of counterfeit, falsified and poor quality drugs.

Given the research on the topic, I am surprised the authors did not appear to appreciate the context of the WHO struggles to develop workable definitions of the various problem drugs, or to appreciate why the term counterfeit is so controversial, when used loosely in news reports and policy debates. While there are many definitions of counterfeits, the term often has a specific meaning in the context of intellectual property laws, typically as an act to deceive the buyer that the product is authorized by the owner of a well known trademark. Probably the most common type of counterfeit drugs these days are those that present themselves as Viagra, Pfizer’s brand of sildenafil citrate, complete with the unauthorized use of the Pfizer and Viagra trademarks. In addition to anything else that may be a problem, such acts are considered criminal violations of Pfizer’s trademark. In the United States, such violations are punishable for anywhere from ten years to life in prison (see below).

While there are undoubtedly cases of both high quality and low quality counterfeit drugs, and a need for governments to pursue such acts, it is not clear how common is the problem of counterfeiting to the more general case of dangerous and low quality drugs, and what should be the focus of government interventions.

The pharmaceutical industry has painted a picture of counterfeiting that in some news reports would include a huge percentage of all drug sales in developing countries, and this is used to justify all sorts of remedies that have certain predictable impacts on legitimate trade in generic drugs, including greater surveillance of the markets for unbranded and unpatented chemicals used to manufacture generic drugs, more onerous border enforcement of alleged intellectual property infringements, and greater third party liability for sales of chemicals or generic products that are alledged to have infringed both trademarks and patents. These intellectual property debates are important by themselves, and should be informed by better empirical data regarding the nature and extend of true counterfeiting.

The problem of falsified and low quality drugs is much broader than counterfeits, and, KEI assumes, involves a much larger share of the problem drugs. There are also other issues, such as the suppression or falsification of information about drug safety and efficacy, and the selling of legitimate products in ways that are illegal and unethical. These problems are common in all levels of the drug business, as one can easily verify by using such Google search terms as: pfizer violation (780,000 hits), Merck criminal sanction (2,060,000 hits), or FDA fines GSK (905,000 results), to mention a few. For Malaria drugs in Asia and Africa, a huge part of the problem comes from persons selling low quality drugs under brands that are not famous, and using the names of companies that may not even exist.

These are not trademark counterfeiting problems, but rather quality regulation problems.
If the regulatory shortcomings are the leading cause of health risks, why has the policy focus been on the intellectual property issues, such as the new Anti-counterfeiting Trade Agreement (ACTA), or the intellectual property chapter of the Trans Pacific Partnership Agreement, or the USPTO training programs? Why has the WHO pre-qualification program been so weakly funded? Why don’t global and local actors focus on measures to restore confidence in legitimate generic drugs?

The recent article in Lancet is another in a series of papers that sheds little light on the extent of the true counterfeit problem, by describing counterfeits as a synonym for falsified drugs, as if the distinctions don’t matter to anyone. In any case, the authors don’t shy away from discussing causes and remedies for falsified/counterfeit products.
Consumption of falsified antimalarial drugs is related to self-treatment through the unregulated private sector, the cost and inaccessibility of good-quality antimalarial drugs, the scarcity of drug regulation, and the absence of punitive measures for counterfeiters.

The economic incentives for criminals of drug falsification surpass the risks involved in their production and sale. Free trade zones with lax regulation promote increased access to drugs and could be pathways for informal agreements, illegal trade, corruption, and covert practices.20, 53, 54 Legal approaches to combat falsified drugs, where they exist, are only applicable nationally, which makes penalising of international trade in falsified drugs even more challenging. No universal jurisdiction allows prosecution of international traders in falsified drugs.

The complaint about the lack of international jurisdiction for “legal approaches” strikes us as odd, in that nearly all civil and criminal sanctions are based upon national laws, and like other illegal acts, there are a variety of ways that governments cooperate and resolve these jurisdictional issues, including via extradition for criminal prosecution, or enforcement of foreign judgments in civil matters. This current approach certainly has its flaws in terms of civil and criminal law enforcement objectives, but this is hardly limited to counterfeit or falsified drugs. Also, the Lancet article seems poorly informed as regards global norms on both civil and criminal sanctions against at least counterfeit products.

Interestingly, the authors make no mention at all of the new Anti-Counterfeiting Trade Agreement (ACTA). Perhaps more importantly, the WTO Agreement on Trade Related Aspects of Intellectual Property Rights already offers requirements as regards both civil and criminal sanctions. For example, consider Article 61 of the TRIPS:

Article 61

Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary fines sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity. In appropriate cases, remedies available shall also include the seizure, forfeiture and destruction of the infringing goods and of any materials and implements the predominant use of which has been in the commission of the offence. Members may provide for criminal procedures and penalties to be applied in other cases of infringement of intellectual property rights, in particular where they are committed wilfully and on a commercial scale.

Note that the TRIPS makes it mandatory (“shall provide”) to provide for “imprisonment and/or monetary fines sufficient to provide a deterrent,” for “wilful trademark counterfeiting . . . on a commercial scale.” If it is true that any of the 155 WTO members are not in compliance, the US government, which is highly focused on counterfeits these days, has the opportunity to file a WTO case. Why hasn’t this happened in the context of counterfeits? Perhaps because the lack of official legal sanctions is not as is implied in the Lancet article. It is possible, and indeed likely, that the problem is not so much the lack of a legal basis for sanctions, but the lack of resources devoted to enforcement of existing laws.

In developing countries, that lack of enforcement of civil and criminal sanctions is a problem, not only for falsified drugs, but for all sorts of other issues, including basic security and protection from acts of violence against individuals, white collar crime, etc. To mobilize significant resources and extraordinary global legal regimes to counter an apparent emergency in terms of falsified and counterfeit products, it would have been helpful to have unpacked the data a bit more, and recognized that remedies for dealing with counterfeits of trademarks on a commercial scale (what many call “true counterfeits) is a different problem than other issues about “falsified” products. It is also important to appreciate the dual motivies of the pharmaceutical industry in pursuing this agenda, at this time.
A number of corporate intellectual property right holders, not only in the medicines area, are lobbying governments for stronger IPR enforcement measures. These lobby groups present dangerous drugs as the core motivating factor for legislation that has little to do with solving the bulk of the substandard and dangerous drug problem, and they also seek to introduce measures the undermine the trade in high quality legitimate generic products. One risk is that the various anti-counterfeit drug initiatives will be used to further undermine legal parallel trade in branded drugs. Another is that surveillance of trade in unpatented and unbranded chemicals will be used to further expand monopoly power. To appreciate the risks, consider three recent cases.

When Thailand started manufacturing its own version of the AIDS drug ddI, Bristol-Myers Squibb put pressure on its supplier of unpatented APIs. BMS was a bigger customer of APIs than the Thai government, and the Thai government had to find a new supplier — one that BMS would not pressure. When Roche faced exploding demand for generic Tamiflu, a drug off patent in many developing countries, it also used its market power in the API market to cut off generic producers. A similar strategy was used by BMS in the markets for generic version of the unpatented cancer drug paclitaxol.

Many of the efforts to address the security of the supply chain for medicines are motivated by public health concerns, but to ignore the other motivations is to ignore a lot. If authors systematically see the problem in ways consistent with drug company lobbyists, they are not seeing the whole picture.

WHO to convene meeting in Buenos Aires, Argentina

The 65th World Health Assembly (WHA) of the World Health Organization (WHO) recently adopted the text of resolution (EB130.R13) on substandard/spurious/falsely-labelled/falsified/counterfeit medical products. The resolution establishes a member state mechanism “for international collaboration among Member States, from a public health perspective, excluding trade and intellectual property considerations, regarding “substandard/spurious/falsely-labelled/falsified/counterfeit (SSFFC) medical products” .

The first meeting of this WHO member state mechanism will take place in Buenos Aires, Argentina on November 19, 2012.
US sanctions for trafficking in counterfeit goods.

(b) Penalties.—
(1) In general.— Whoever commits an offense under subsection (a)—
(A) if an individual, shall be fined not more than $2,000,000 or imprisoned not more than 10 years, or both, and, if a person other than an individual, shall be fined not more than $5,000,000; and
(B) for a second or subsequent offense under subsection (a), if an individual, shall be fined not more than $5,000,000 or imprisoned not more than 20 years, or both, and if other than an individual, shall be fined not more than $15,000,000.
(2) Serious bodily injury or death.—
(A) Serious bodily injury.— Whoever knowingly or recklessly causes or attempts to cause serious bodily injury from conduct in violation of subsection (a), if an individual, shall be fined not more than $5,000,000 or imprisoned for not more than 20 years, or both, and if other than an individual, shall be fined not more than $15,000,000.
(B) Death.— Whoever knowingly or recklessly causes or attempts to cause death from conduct in violation of subsection (a), if an individual, shall be fined not more than $5,000,000 or imprisoned for any term of years or for life, or both, and if other than an individual, shall be fined not more than $15,000,000.
(3) Counterfeit military goods or services.— Whoever commits an offense under subsection (a) involving a counterfeit military good or service—
(A) if an individual, shall be fined not more than $5,000,000, imprisoned not more than 20 years, or both, and if other than an individual, be fined not more than $15,000,000; and
(B) for a second or subsequent offense, if an individual, shall be fined not more than $15,000,000, imprisoned not more than 30 years, or both, and if other than an individual, shall be fined not more than $30,000,000.