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Jeffrey Gren, Director Office of Health and Consumer Goods U.S. Department of Commerce January 15 - 19, 2007 PowerPoint Presentation
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U.S. – Asian Business Council Anti-Counterfeiting Medicine Conference Week of January 15 – 19, 2007 Indonesia, Philippines and Thailand Topic: International Trade Issues Related to Counterfeit Medicines and the Need for Global Cooperation Jeffrey Gren, Director

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slide1

U.S. – Asian Business Council

Anti-Counterfeiting Medicine Conference

Week of January 15 – 19, 2007

Indonesia, Philippines and Thailand

Topic: International Trade Issues Related

to Counterfeit Medicines and the Need for Global Cooperation

Jeffrey Gren, Director

Office of Health and Consumer Goods

U.S. Department of Commerce

January 15 - 19, 2007

outline
Outline
  • Definitions of Counterfeit Medicines
  • Why an International Trade Problem
  • Industry Trends Impacting the Counterfeit Medicine Problem
  • Solutions
  • Summary and Conclusions
definitions
Definitions:
  • The World Health Organization (WHO) defines counterfeit drug as “a drug that is deliberately and fraudulently mislabeled with respect to identity and/or source”
definitions continued
Definitions (continued)
  • Counterfeit drugs may include products with the correct ingredients, or with the wrong ingredients, without active ingredients, with insufficient active ingredients, or with fake packaging”
  • Counterfeit drugs apply to both patented and generic drugs
definitions continued5
Definitions (continued)
  • What sets a counterfeit drug apart from a substandard drug is that the counterfeit drug is deliberately and fraudulently mislabeled with respect to identity and source
  • Some countries, such as China, use the term “fake” drugs, implying that the problem is limited to counterfeit drugs that do not work
definitions continued6
Definitions (continued)
  • However, our view at DOC is that all drugs deliberately and fraudulently mislabeled with respect of identity and source are counterfeit and unsafe
  • Even if a counterfeit drug has the correct combination of active pharmaceutical ingredients (APIs) and excipients, it is still unsafe, since it may contain containments such as heavy metals, pesticides, etc., due to lack of cGMP manufacturing
definitions continued7
Definitions (continued)
  • Substandard drugs are also a significant global problem; however, the focus of this presentation stopping the global spread of counterfeit drugs
  • The causes and solutions for substandard drug problems are entirely different than the causes and solutions for the counterfeit medicine problem
why an international trade problem
Why an international trade problem?
  • Violates Intellectual Property Rights (IPR)
  • Manufacturers lose revenue. The Centre for Medicines in the Public Interest in the United States predicts that counterfeit drug sales will reach $75 billion globally in 2010. The WHO notes that this is an increase of more than 90 per cent from 2005.
  • Violates WTO Accession Agreements and Free Trade Agreements
why an international trade problem cont d
Why an international trade problem? (cont’d)
  • The use of counterfeit medicines has become an enormous global problem causing significant death and injury
  • Counterfeit medicines also contribute to the development of drug resistance; if a pathogen is repeatedly exposed to a lower amount of the active pharmaceutical ingredient the parasite/bacteria/virus can adapt and become resistant to treatment
  • Counterfeit medicines can also cause a loss of trust in the public health system by patients and a loss of confidence in brand names
slide10

Why an international trade problem? (cont’d)

  • Combating Counterfeit Drugs, “Drug counterfeiters not only defraud customers, they also deny ill patients the therapies that can alleviate suffering and save lives”
  • According to the U.S. Food and Drug Administration February 2004 report, there are numerous documented, heart wrenching stories of human suffering and death due to counterfeit medicines
why an international trade problem cont d11
Why an International Trade Problem (cont’d)
  • There are no reliable statistics to measure the full global impact on the global counterfeit medicines problem
  • 10-20 years ago most counterfeit drugs did not have any active pharmaceutical ingredients (APIs)
  • Now more and more drugs have real APIs
  • Although there are counterfeit APIs, many counterfeits drugs are made with real APIs
  • In developing markets and emerging countries in Africa, Asia, Eastern Europe, Russia, and Latin America citizens regularly encounter counterfeit drugs
why an international trade problem lack of statistics cont d
Why an international trade problem - Lack of Statistics (Cont’d)
  • In developed countries, the extent of counterfeit drugs within the drug supply chain is currently small, but the risk is increasing, and internet sales account for the majority of the counterfeit drugs on the market
  • Most statistics under estimated the problem and the impact
  • According to a recent PhRMA study, the five countries of highest counterfeit medicines impact are China, India, Mexico, Russia, and Brazil
why an international trade problem cont d13
Why an international trade problem (Cont’d)

Definitions:

  • Illegal Diversion – When a genuine pharmaceutical product is approved and intended for sale in one country, but is then illegally intercepted and sold in another country. This is often done with false statements or declarations. Sometimes the drugs sold in the other country is not approved by the regulatory authorities.
why an international trade problem cont d14
Why an international trade problem - (Cont’d)

Definitions (cont’d):

  • Pharmaceutical Theft – Theft of finished dosage form medicines any where in the distribution chain, such as at the site of production, freight forward distribution center, warehouses, pharmacies, or hospitals
  • Incident – A discreet event triggered by discovery of counterfeit, illegally diverted or stolen pharmaceutical
incidence of fake antimalarial drugs in five southeast asian countries 2002 2003
Incidence of Fake Antimalarial Drugs in Five Southeast Asian Countries: 2002-2003

Source: A.M. Dondorp, Tropical Medicine and International Health, Dec. 2004.

why an international trade problem who are the drug counterfeiters
Why an international trade problem - Who are the drug counterfeiters?
  • Manufacturing counterfeit drugs has become extremely profitable
  • As a result, organized crime has moved from narcotics into counterfeiting
  • Of course, some producers of counterfeit drugs are not from organized crime, but they are still criminals
  • The penalty for producing counterfeit drugs is far less than the penalties for illegal narcotics
industry trends impacting the problem active pharmaceutical ingredients global overview
Industry Trends Impacting the Problem: Active Pharmaceutical Ingredients Global Overview

2003

2008

Source: SRI Consulting “Active Pharmaceutical Ingredients” 2004

industry trends impacting the problem global api manufacturing 2004
Industry Trends Impacting the Problem: Global API Manufacturing - 2004

Total Global Number of API Manufacturers Sites nearly 2,000

*Source: Newport Horizon Sourcing, October 2004

industry trends impacting the problem apis
Industry Trends Impacting the Problem: APIs
  • European API manufacturers primarily serve the patented pharmaceutical market
  • The fastest growing countries for API production is China and India
  • Many experts predict that in 20 years 80% of all APIs will come from India and China
industry trends impacting the problem apis cont d
Industry Trends Impacting the Problem: APIs (Cont’d)
  • According to IMS for the next 20 years India will be dominant for API production, and over the next 50 years China will become more dominant for API production
  • Currently most API manufacturing in India and China is for the generic drug market, but this will change over time due to:
    • lower developmental costs
    • complex synthesis capabilities
    • shifting pharmaceutical drug production
    • regulatory compliance and adherence to GMP and GCP
industry trends impacting the problem the generic trend
Industry Trends Impacting the Problem: The Generic Trend
  • Generic production is growing at a faster rate than innovative drugs
  • We are also seeing a shift in the global production of generic drugs – countries/regions with significant growth of generic production include India, China, Southeast Asia, Brazil, Middle East, Russia
industry trends impacting the problem the generic trend cont d
Industry Trends Impacting the Problem: The Generic Trend (cont’d)
  • The shift in generic production away from the developed markets U.S., Europe and Japan adds to the problem of counterfeit drugs, since the regulatory regimes and standards established by pharmacopeias, are much weaker away from the U.S., Europe, and Japan
industry trends impacting the problem growth in pharmaceutical segments
Industry Trends Impacting the Problem: Growth in Pharmaceutical Segments

Source: IMS Health MIDAS - 2005

solutions
Solutions
  • Protecting the integrity of the supply chain
  • Need for global cooperation to stop counterfeit medicines and catch the counterfeits
  • Cooperation health officials, customs, law enforcement and industry
solutions protecting the integrity of the drug supply chain
Solutions: Protecting the integrity of the drug supply chain
  • Part of the solution is to make sure that a country’s drug supply chain is adequate to prevent distribution of counterfeit medicines
  • The counterfeit medicine problem varies greatly among countries
  • Countries with weak regulatory regimes, and lack of pharmaceutical standards enforcement are impacted most severely
solutions protecting the integrity of the drug supply chain cont d
Solutions: Protecting the integrity of the drug supply chain (cont’d)
  • Some countries, primarily developing countries, have an extremely high incidence of counterfeit medicines that are often found within the medicine supply chain
  • Other countries, primarily developed economies, have a counterfeit medicine problem that is not as severe and generally no significant presence of counterfeit medicines in the medicine supply chain
solutions protecting the integrity of the drug supply chain cont d30
Solutions: Protecting the integrity of the drug supply chain (cont’d)
  • According to the FDA 2004 report, “in some countries the counterfeiting of drugs is endemic – with some patients having a better chance of getting a fake medication than a real one”
  • According to the WTO 2004 Report on Safety of Medicines, “in wealthier countries, new expensive medicines are frequently counterfeited, such as hormones, corticosteroid, cancer drugs, and antiretroviral”
  • In developing countries, the most frequent medicines counterfeited are drugs to treat life-threatening conditions such as malaria, tuberculosis, and HIV/AIDS”
solutions protecting the integrity of the drug supply chain cont d31
Solutions: Protecting the integrity of the drug supply chain (cont’d)
  • Counterfeit medicines can be kept out of the medicine supply chain through verification programs, reliance on standards, monographs, tracking and tracing (RFID) technologies, and authentication technologies
  • Establishment of global harmonized standards for ppharmaceutical ingredients (APIs and excipients), based upon ongoing work of the Pharmacopeia Discussion Group/PDG of the pharmaceutical International Conference on Harmonization - ICH), can also help
solutions protecting the integrity of the drug supply chain cont d32
Solutions: Protecting the integrity of the drug supply chain (cont’d)
  • There are a number of technologies that can assist government and industry in tracking and identifying counterfeit medicines
  • Radio frequency identification (RFID) tagging of products by manufacturers, wholesalers and retailers is a reliable product tracking and tracing technology
  • Authentication technologies include measures such as color shifting inks, holograms, fingerprints, taggants, and chemical markers embedded in a drug or its label
solutions need for global cooperation to stop counterfeit medicines an catch the counterfeiters
Solutions: Need for global cooperation to stop counterfeit medicines an catch the counterfeiters
  • The production of counterfeit drugs has grown at a high rate in recent years, however, data is difficult to obtain since the extent of counterfeit drugs is hard to measure
  • Counterfeit drugs are a global problem that requires global cooperation to regulate and track the flow of pharmaceutical substances
slide34
Solutions: Need for global cooperation to stop counterfeit medicines and catch the counterfeiters (cont’d)
  • There are two aspects to this problem:
  • First counterfeits within a country’s borders
  • Stopping counterfeit medicines within a country’s borders requires cooperation between regulators, customs, law enforcement, and justice governmental units, at both the national and local (state or provincial) levels
  • Also it is critical to regulate the use of APIs since APIs often are used in the production of counterfeit medicines
slide35
Solutions: Need for global cooperation to stop counterfeit medicines and catch the counterfeiters (cont’d)
  • Second aspect is bulk APIs shipped from one country to another country for the purpose of producing counterfeit drugs
  • To control this movement of pharmaceutical substances (APIs and excipients) for the illegal purpose of producing counterfeit drugs requires health, customs, law enforcement, and industry from various countries to work together
slide36
Solution: Need for global cooperation to stop counterfeit medicines and catch the counterfeiters (cont’d)
  • For example, if an API, such as sildenafil citrate, that may be used to produce a counterfeit viagra is shipped from China to Thailand, China customs should inform Thailand customs
  • In turn, Thailand customs could work with Thailand law enforcement to track down the shipping location of the sildenafil citrate, and investigate if this is a legitimate production, or an illegal counterfeit operation
  • If it is an illegal counterfeit operation, then Thailand authorities could shut down the plant and arrest the counterfeiters
solutions doc international activities
Solutions: DOC International Activities
  • India – U.S.-India High Technology Government Cooperation Group and the India Business Council
  • China – U.S.-China Joint Commission on Commerce and Trade (JCCT) and bulk API activities
  • DOC is working with U.S. FDA, other U.S. Government Agencies, and the Singapore Health Science Authority to Organize Asia APEC Funded Capacity Building Seminars to Stop the Spread of Counterfeit Health Products.
  • STOP!: Strategy Targeting Organized Piracy -

1-866-999-HALT or www.stopfakes.gov

solutions doc international activities38
Solutions: DOC International Activities
  • WHO IMPACT

(International Medical Products Anti-Counterfeiting Task Force)

solutions doc international activities cont d
Solutions: DOC International Activities(cont’d)
  • A global taskforce was made up of WHO Member States, which includes:
    • More than 20 major stakeholders, the World Customs Associations, patients’ and medical organizations, the World Bank, the World Trade Organization and the International Federation of Pharmaceutical Manufacturers Associations
solutions doc international activities cont d40
Solutions: DOC International Activities (cont’d)
  • WHO IMPACT (International Medical Products Anti-Counterfeiting Task Force)
    • In November, the World Health Organization (WHO) and partners officially launched the first ever International Medical Products Anti-counterfeiting (IMPACT) meeting in Bonn, Germany
    • During this meeting, 1) a pilot program was launched in three countries, and 2) a tool was presented to help strengthen countries’ legislative capacity to deal with counterfeiting
solutions doc international activities cont d41
Solutions: DOC International Activities (cont’d)
  • WHO IMPACT
    • IMPACT is focused on five action areas
      • Legislative and regulatory infrastructure
      • Regulatory implementation
      • Enforcement
      • Technology, and
      • Risk communication
solutions doc international activities cont d42
Solutions: DOC International Activities (cont’d)
  • WHO IMPACT
    • “Counterfeit medicines must be tackled not only through global efforts but also by a truly collaborative, cross-cutting approach involving medicine regulatory authorities, health professionals, enforcement officials, law-makers and industry”
      • Dr. Howard Zucker, WHO Assistant Director-General for Health Technology Pharmaceuticals
summary and conclusions
Summary and Conclusions
  • During my presentation I have discussed the international trade issues related to the global counterfeit drug problem
  • After covering definitions of counterfeit drugs, I outlined why counterfeit drugs are considered a trade problem
  • I discussed who are the counterfeiters and methods to protect in integrity of the drug supply chain
summary and conclusions44
Summary and Conclusions
  • I also outlined global shifts in the production of pharmaceutical substances and generic drugs and why this adds to the global counterfeit drug problem
  • I also outlined U.S. DOC programs and activities related to counterfeit drugs
summary and conclusions cont d
Summary and Conclusions (cont’d)
  • In conclusion, the only way the rapid growth of counterfeit medicines will be stopped is through global cooperation among health, customs, law enforcement officials, and industry representatives from major countries of the world to catch and arrest counterfeiters
  • Progress is being made, but a focused global approach is needed
thank you
Thank You!

Jeffrey Gren, Director

Office of Health and Consumer Goods

U.S. Department of Commerce

Phone: 202-482-2587

Email: Jeffrey.Gren@mail.doc.gov

Website: www.export.gov/health