1

Introduction

In the 1949 film The Third Man and the novel of the same name, Holly Martin learns that his childhood friend Harry Lime has made a fortune diluting stolen penicillin and selling it on the black market. In a dramatic confrontation on the Vienna Ferris wheel, Martin refers to Lime’s earlier racketeering, asking, “Couldn’t you have stuck to tires?” No, explains Lime, one of the American Film Institute’s 100 greatest villains, “I’ve always been ambitious” (AFI, 2003).

The theft, adulteration, careless manufacture, and fraudulent labeling of medicines1 continue to attract villains who, like Harry Lime, grow wealthy off their business. Although the problem is most widespread in poor countries with weak regulatory oversight, it is no longer confined to underground economies as in postwar Vienna. As of January 2013, gross manufacturing negligence at a compounding pharmacy in Massachusetts had sickened 693 Americans and killed 45 (CDC, 2013). Less than a year earlier, 76 doctors in the United States unknowingly treated cancer patients with a fake version of the drug Avastin (Weaver and Whalen, 2012).

International trade and manufacturing systems obscure connections between the crime and the criminal; in modern supply chains, medicines may change hands many times in many countries before reaching a patient. To complicate the problem, medicines are mostly for sick people. The effects of inactive, even toxic, drugs can go unnoticed or be mistaken for the

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1 The terms medicine, drug, and pharmaceutical are used interchangeably in this report in accordance with the definitions listed in the American Heritage Stedman’s Medical Dictionary (2012a,b,c).



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1 Introduction In the 1949 film The Third Man and the novel of the same name, Holly Martin learns that his childhood friend Harry Lime has made a fortune diluting stolen penicillin and selling it on the black market. In a dramatic confrontation on the Vienna Ferris wheel, Martin refers to Lime’s earlier racketeering, asking, “Couldn’t you have stuck to tires?” No, explains Lime, one of the American Film Institute’s 100 greatest villains, “I’ve al- ways been ambitious” (AFI, 2003). The theft, adulteration, careless manufacture, and fraudulent label- ing of medicines1 continue to attract villains who, like Harry Lime, grow wealthy off their business. Although the problem is most widespread in poor countries with weak regulatory oversight, it is no longer confined to underground economies as in postwar Vienna. As of January 2013, gross manufacturing negligence at a compounding pharmacy in Massachusetts had sickened 693 Americans and killed 45 (CDC, 2013). Less than a year earlier, 76 doctors in the United States unknowingly treated cancer patients with a fake version of the drug Avastin (Weaver and Whalen, 2012). International trade and manufacturing systems obscure connections between the crime and the criminal; in modern supply chains, medicines may change hands many times in many countries before reaching a patient. To complicate the problem, medicines are mostly for sick people. The ef- fects of inactive, even toxic, drugs can go unnoticed or be mistaken for the 1  The terms medicine, drug, and pharmaceutical are used interchangeably in this report in accordance with the definitions listed in the American Heritage Stedman’s Medical Dictionary (2012a,b,c). 15

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16 COUNTERING THE PROBLEM OF FALSIFIED AND SUBSTANDARD DRUGS natural course of the underlying disease. This is most true in parts of the world with weak pharmacovigilance systems, poor clinical record keeping, and high all-cause mortality, where “friends or relatives of those who die are obviously saddened, but not necessarily shocked” (Bate, 2010). Deaths from fake drugs go largely uncounted, to say nothing of the excess morbidity and the time and money wasted by using them. The manu- facture and trade in fake pharmaceuticals is illegal and hence almost impos- sible to measure precisely. Even crude copies can blend in with legitimate products in the market. The camouflage succeeds because drug quality is not something consumers can accurately judge. This imbalance, also called information asymmetry, makes the medicines trade vulnerable to market failure (Mackintosh et al., 2011). In short, “At every step of the supply chain there is this unequal knowledge, and people are exploited because of [it]” (Mackintosh et al., 2011, p. 2). Market controls and oversight aim to correct the information imbal- ance in the medicines market, but supervising sprawling multinational dis- tribution chains is a “regulatory nightmare” (Economist, 2012). National drugs regulatory agencies (hereafter, regulatory agencies) are responsible for assuring drug quality in their countries, a job that increasingly requires cooperation with their counterpart agencies around the world (IOM, 2012). The World Health Organization (WHO) has worked to facilitate this co- operation since 1985, but advancing the public discourse on this topic has proven more difficult than anyone would have predicted then (Clift, 2010). To start, different countries and international stakeholders cannot agree on how to define the problem. When it is framed as one of counterfeit and legitimate drugs, many civil society groups and emerging manufactur- ing nations see a thinly veiled excuse to persecute generic drug industries (Clift, 2010; Economist, 2012). Large innovator pharmaceutical companies have the most experience in finding and prosecuting pharmaceutical crime. This expertise brought them a place in the WHO’s International Medical Products Anti-Counterfeiting Taskforce (IMPACT), the largest interna- tional working group on drug safety to date. Involving these companies with a WHO program, however, raised suspicions of civil society groups (TWN, 2010). Objections to the taskforce’s inception and confusion about its mandate from WHO governing bodies further eroded support (TWN, 2010). The WHO distanced itself from IMPACT after 2010; the taskforce’s secretariat moved to the Italian drugs regulatory authority (Seear, 2012; Taylor, 2012). IMPACT may no longer be active, but criminals and unscrupulous drug manufacturers are. The Economist recently described the 21st century as “a golden age for bad drugs” (Economist, 2012). There is an urgent need for international public discourse on the problem. In an effort to advance this discourse, the U.S. Food and Drug Administration (FDA) commissioned

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INTRODUCTION 17 the Institute of Medicine (IOM) to convene a consensus committee on un- derstanding the global public health implications of falsified, substandard, and counterfeit pharmaceuticals. Box 1-1 presents the committee’s charge. (See Appendix B for committee member biographies.) The committee met in March, May, July, and October of 2012 to hear speakers and deliberate on its recommendations for this report. Small travel delegations of committee members and staff also visited experts in Brasília, Delhi, Geneva, Hyderabad, London, and São Paulo in the summer of 2012. In total, the committee heard input from 106 experts in its information gathering meetings. (See Appendix C for meeting agendas.) Additional lit- erature review informed the conclusions and recommendations presented in this report. BACKGROUND AND TERMS The committee’s first step in deliberating on the task in Box 1-1 was agreeing on common terms to describe the products of interest. They re- viewed the competing and often overlapping definitions of the terms coun- terfeit, falsified, and substandard, as well as similarly important concepts such as unregistered. As Tables 1-1 through 1-6 make clear, some of these definitions have evolved over time, with the trade and intellectual property debates of the last 20 years coloring how people use words like counterfeit. The following brief background on intellectual property, public health, and patent and trademark infringement gives some context to this discussion. Key Findings and Conclusions •  long and acrimonious history of applying intellectual property rights A to medicines colors the discussion about drug quality. •  counterfeit medicine is one that infringes on a registered trademark. A The broad use of the term counterfeit, meaning made with intention to deceive, is insufficiently precise for formal, public discourse. •  ubstandard drugs fail to meet the specifications outlined by an ac- S cepted pharmacopeia or the manufacturer’s dossier. •  alsified drugs are those that carry false representation of identity or F source. •  nregistered drugs circulate without market authorization. Unregis- U tered medicines are suspect, though some may be of good quality.

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18 COUNTERING THE PROBLEM OF FALSIFIED AND SUBSTANDARD DRUGS BOX 1-1 Statement of Task The Institute of Medicine (IOM) is requested to convene an ad hoc consensus committee of diverse experts to gather information and de- liberate on approaches to mitigating the global problem of substandard, falsified, and counterfeit pharmaceuticals and products used in their manufacture. It will begin by developing among the committee members and for this context consensus working definitions for the terms substan- dard, falsified, and counterfeit. The committee will carefully distinguish between the application of these terms to meet public health and legal needs. Then, focusing specifically on the public health aspects of the problem, the IOM committee will address the following issues: •  rends: Using available literature, identify high-level, global trends T in substandard, falsified, and counterfeit (SFC) medicines, includ- ing differences and similarities in different global regions. Identify gaps in the evidence that complicate the analysis of these trends. This is intended to provide context to the study but not to serve as an in-depth analysis. •  isks in the supply chain: Identify the weaknesses in the supply R chain that allow falsified, substandard, and counterfeit drugs to circulate. •  ealth effects: Explain the public health consequences, to pa- H tients and at the population level, of SFC drugs and how to mea- sure this. •  tandards: Identify areas where convergence of standards could S contribute to stronger regulatory actions. Intellectual Property and Public Health Intellectual property rights, particularly patent rights, allow the owner of a new product or technology to recoup their research and development costs by charging prices far above the marginal cost of production. There- fore, patent-protected medicines are expensive; the cost of these drugs puts them out of the reach of many patients. In developed countries, govern- ments or large private insurers can mitigate this problem (Rai, 2001). But in poor countries, health insurance is limited and noncompetitive pricing can exclude entire countries from the medicines market (Yadav and Smith, 2012). TRIPS and the Doha Declaration The recent history of the international patent controversy began with the 1994 Agreement on Trade-Related Aspects of Intellectual Property

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INTRODUCTION 19 •  dentification: Describe global regulatory processes (e.g., track- I and-trace, authentication) that distinguish genuine and high- quality drugs from fake or substandard drugs and identify what factors could be used for additional scrutiny of the genuineness of the product. •  echnology: Identify detection, sampling methods, and analytical T techniques used to identify counterfeit, falsified, and substandard drugs. Explain how these technologies can be best used and implemented in a system to stop the circulation of harmful drugs. •  ollaboration: Assess effectiveness of regulatory approaches C around the globe, including prevention, detection, track-and- trace systems, compliance, and enforcement actions. o  Based on such an assessment, identify areas where collective action among government regulatory authorities is most rel- evant and sustainable; o  Identify ways government, industry, and other stakeholders can work together to strengthen supply chains and fight coun- terfeit, falsified, and substandard drugs; o  Identify areas where industry or other stakeholders are best equipped to act; and o  Recommend a collaborative path forward. This includes rec- ommending definitions for the products in question that would be sensitive to the needs of drug regulators around the world and focuses on the public health. It also includes recommending how various regulators could collaborate on a global and regional level to best address the problem. Rights (TRIPS), which required signatories to make patents available, either immediately or after a transition period (Barton, 2004; WTO, 1994). How- ever, a provision allowed governments to grant compulsory licenses, that is, to grant a license to use a patent without the patent holder’s consent, sub- ject to conditions laid down in the agreement (WTO, 1994). Compulsory licenses are subject to prior negotiation with the patent holder, but these negotiations too can be waived in cases of national emergency or extreme urgency or for public noncommercial use (WTO, 1994). As TRIPS entered into force, antiretroviral drugs for HIV and AIDS were becoming widely available in developed countries, reducing AIDS mortality dramatically within 4 years (CASCADE Collaboration, 2003; Osmond, 2003). The expense of the patent-protected drugs put them out of reach for all but 2 percent of the approximately 2.5 million HIV and AIDS patients in low- and middle-income countries (WHO, 2002). Tensions over patent protection came to a head in 2001 when the Pharmaceutical

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20 COUNTERING THE PROBLEM OF FALSIFIED AND SUBSTANDARD DRUGS Research and Manufacturing Association, representing 39 major pharma- ceutical companies, sued the South African government over a law that allowed the manufacture of patent-protected AIDS drugs (BBC, 2001a; Simmons, 2001). The association “bow[ed] to mounting public pressure” and dropped the case after disastrous press (BBC, 2001b; Economist, 2001; Pollack, 2001; Swarns, 2001). After 2001, innovator drug companies began issuing more voluntary licenses at lower prices (Flynn, 2008). Antiretrovirals would still have been too expensive for the poorest patients if not for Indian drug companies, exempted from TRIPS patent protections until 2005. In February 2001, the Indian drug company Cipla offered its triple therapy combination of stavudine, nevirapine, and lami- vudine to Doctors Without Borders (an organization known by the French acronym MSF [Médecins Sans Frontières]) for less than $1 per patient per day, undercutting the cheapest voluntary license offer by about 65 percent (McNeil, 2001; t’Hoen et al., 2011). More recently, regulators and innovator pharmaceutical companies have devised other ways to make patent-protected drugs available in de- veloping countries. The U.S. government uses the FDA tentative approval process to guarantee drugs supplied through the President’s Emergency Program for AIDS Relief (FDA, 2013). Through this program, the FDA approves both drug combinations (many not available in the United States because of patent controls) and the producers in Asia and Africa that make the drugs at greatly reduced costs (FDA, 2013). Drugs granted tentative ap- proval “[meet] all safety, efficacy, and manufacturing quality standards for marketing in the U.S., and, but for the legal market protection, . . . would be on the U.S. market” (FDA, 2013). Patent and Trademark Infringement Patents, not trademark or trade dress, are the main source of ten- sion between intellectual property and public health. But both patent and trademark questions surfaced in 2008 and 2009 when European customs officials seized consignments of generic medicines in transit from India to Latin American and sub-Saharan Africa (Brant and Malpani, 2011). The drugs were not under patent in India, nor in the counties they were destined for, but a European Union (EU) regulation allows customs officials, acting either on their own behalf or after a request from the rights holder, to seize goods that may infringe on patents, trademarks, or copyrights (Ho, 2011; Miller and Anand, 2009). Dutch courts interpreted this to mean that cus- toms authorities are allowed to treat in-transit goods as if they had been made in Holland (Ho, 2011). French and German customs officials also seized drug shipments in the same period (Taylor, 2009). Sometimes trademark misunderstandings delay consignments. In May

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INTRODUCTION 21 2009, German authorities suspended a shipment of amoxicillin bound for Vanuatu in the Frankfurt airport on the grounds that it might infringe on GlaxoSmithKline’s trademark name for the same drug, Amoxil. When con- tacted, GlaxoSmithKline denied any suspicion of trademark infringement, by which time the shipment had been delayed for 4 weeks (Mara, 2009; Singh, 2009). Whether the use of national law to seize in-transit drug shipments is consistent with international law, particularly the TRIPs agreement, re- mains an open question (Ho, 2011; Ruse-Khan, 2011). Developing coun- tries argue that such seizures violate TRIPs agreement safeguards allowing the export of cheap generic drugs to countries unable to manufacture them (Ho, 2011). On the other hand, the Anti-Counterfeiting Trade Agreement, signed by Australia, Canada, the European Union, Japan, Korea, Morocco, New Zealand, Singapore, and the United States, does allow parties to en- force their national trademark law against goods-in-transit, thereby poten- tially endangering certain generic shipments2 (USTR, 2011). In any case, there are ambiguities in determining trademark infringe- ment. U.S. law, for example, determines trademark infringement based on likely consumer confusion, something the 13 federal circuits employ 13 different multifactor tests to identify (Beebe, 2006). Drug trademarks can be contentious when companies register trademark names similar to the nonproprietary name (as in the case of Amoxil and amoxicillin) and when drug manufacturers attempt to trademark characteristics such as color. TRIPS requires World Trade Organization (WTO) member countries to treat “willful trademark counterfeiting . . . on a commercial scale” as a criminal offense3 (Clift, 2010). This kind of crime may be different from the civil offense of trademark infringement, if the willfulness of the crime is un- clear, for example, or if the trademark is not identically copied (Clift, 2010). These distinctions are not important to some stakeholders. As a 2011 Oxfam policy paper explained, “whether a falsely labeled, substandard, or unregistered product is also the result of willful trademark infringement on a commercial scale, as criminalized under the TRIPS Agreement, is ir- relevant from the perspective of public health” (Brant and Malpani, 2011, p. 23). Oxfam’s point is well taken. The goals of patent and trademark law are not those of public health. Trademarks can give an incentive to invest in quality and cultivate a brand loyalty, but this depends on consumers’ evalu- 2  Anti-Counterfeiting Trade Agreement (ACTA). October 1, 2011. 3    RIPS: T Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, THE LEGAL TEXTS: THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS 320 (1999), 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994).

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22 COUNTERING THE PROBLEM OF FALSIFIED AND SUBSTANDARD DRUGS ating quality correctly, something difficult to do with medicines (Landes and Posner, 1987). The inability of the consumer to evaluate drug quality is the reason why medicines quality is monitored by an independent, gov- ernment regulatory agency. The courts enforce trademark and patent laws; drugs regulators enforce quality standards. It is unreasonable and unfair to mix those jobs. Such was the logic of the International Negotiating Body on a Protocol on Illicit Trade in Tobacco Products, which recently removed all references to counterfeits from its treaty, noting that decisions about trademark infringement in tobacco products was not within their purview (New, 2012). The committee recognizes that many poor-quality medicines also in- fringe on registered trademarks. At times, trademark infringement can become a public health problem, but it is not a public health problem in itself, even insomuch as it pertains to medicines. Competing Meanings of the Term Counterfeit The contentious history of drug patent and trademark enforcement col- ors discussions of drug quality, particularly the use of the term counterfeit. The U.S. Code, the WTO, the TRIPS Agreement, and Oxfam all use the legal meaning of a counterfeit medicine as one that infringes on a registered trademark (Brant and Malpani, 2011; Clift, 2010; WTO, 1994, 2012). Nevertheless, the word counterfeit, like material and harmless, means one thing to lawyers and judges and something else in common discourse. It is the widely used common meaning of counterfeit as “made in exact imitation of something valuable with the intention to deceive or defraud” (Oxford Dictionaries, 2012) that inspires the way the term is used by the WHO, the Pharmaceutical Security Institute, the Council of Europe, and the governments of India, Kenya, Nigeria, Pakistan, and, in some cases, the United States (see Table 1-1). The WHO definitions of counterfeit lean on the intent to deceive; Table 1-1 shows how most WHO definitions use the words “deliberately and fraudulently mislabeled.” There is elegance to a definition that stresses the intention to deceive. Its proponents rightly observe that this is what most people understand the word to mean anyway. This definition has at its center the effort to distinguish between deliberate and accidental problems. The manufacturer is not to blame if a drug is sold after the expiry date or if it has been kept in conditions that encourage rapid degradation. The 2008 contamination of Baxter heparin was a reminder that even expert companies sometimes pro- duce bad products, but the failure was not intentional (Attaran and Bate, 2010). The regulatory system typically punishes such mistakes, whereas the law enforcement system punishes intentional crimes. In practice, however, it is extremely difficult to distinguish accidental

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INTRODUCTION 23 and intentional problems in drug manufacture. Making the distinction, like determining trademark infringement, is a matter for the courts. Further- more, competing meanings of the word counterfeit—one narrow, meaning infringement on a registered trademark, and one broad, meaning intention- ally deceptive—frustrate many. When bad drugs are all called counterfeit, some see in this definition an attempt to conflate the enforcement of intellectual property rights and pro- tection of public health (Brant and Malpani, 2011; Clift, 2010; MSF, 2012; Oxfam International, 2011; TWN, 2010). International nongovernmental organizations (NGOs), such as Oxfam and MSF, are concerned with access to medicines in the world’s poorest countries, access that cannot be possible without the generics companies that produce medicines for a fraction of the cost innovator companies charge. Generics companies may be vulnerable to accusations of trademark infringement or even deception. When a generic and an innovator drug company market bioequivalent medicines under similar-sounding names or with similar-looking pills, it is debatable whether or not these characteristics are copied or made with an intention to deceive the consumer. These are questions for the courts to decide case by case. Counterfeit is a word that almost everyone uses to talk about bad medicines, but as Tables 1-1 and 1-2 indicate, often with widely divergent meanings. The ambiguity confuses discussions even within governments. The FDA, for example, endorses on its website a definition different from that in the U.S. Code or that used by the Department of Justice and other U.S. government agencies. The use of the word counterfeit to describe any poor-quality drug does not serve the cause of intellectual precision or pro- ductive discussion. The committee accepts the narrow, legal meaning of a counterfeit drug as one that infringes on a registered trademark. Trademark infringement is not a problem of public health concern, nor, in most cases, is it even readily identifiable. Drug companies, both innovator and generic, have the legal right to challenge counterfeiting; sorting out the nuances of trademark infringement should be left to the courts. This report is about drug quality as a public health problem; it is not concerned with trademark infringement. Therefore, this report does not discuss the problem or solutions to the problem of drug counterfeiting, or make mention to counterfeit drugs, except in cases where to do otherwise would be a misrepresentation of someone else’s work. Scientific literature and public health campaigns, especially those more than 2 or 3 years old, often describe poor-quality drugs as counterfeit. The committee hopes that all parties will break this habit but believes that most speakers who use the term use it broadly with no ulterior motives or ill will toward generics.

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24 COUNTERING THE PROBLEM OF FALSIFIED AND SUBSTANDARD DRUGS Substandard and Falsified Drugs Use of the term substandard is less controversial (see Tables 1-3 and 1-4). There is consensus among most organizations that substandard drugs are those that fail to meet established quality specifications. When regu- lators approve a drug, they approve a quality standard, outlined in the accepted pharmacopeia or in the manufacturer’s approved dossier. As the WHO explains, substandard products “do not meet the quality specifica- tions set for them in national standards” (WHO, 2009). As Table 1-3 indicates, the emphasis on national standards is a rela- tively recent change to the definition of a substandard drug. Before 2009, the emphasis was on an official pharmacopeia, not the national standard. Critics of the addition point out that the regulatory authority is responsible for approving national drug standards, a job that exceeds its capacity in many low- and middle-income countries (Ravinetto et al., 2012). Accept- ing the national standard might appear to endorse multiple, possibly inad- equate standards (Ravinetto et al., 2012). On the other hand, an emphasis on national standards improves the precision of the definition. There are many internationally accepted phar- macopeias; some give, for example, different acceptable ranges for drug concentration.4 The committee agrees with the WHO’s 2009 revision to the definition of substandard to specify the standards authorized by the national regulatory authority. It is more practical to let the national regula- tory authority name the standard for a drug and test against that standard. In any case, most countries use standards set out in the large, international pharmacopeias. More than 100 nations, including most of the Common- wealth, accept British Pharmacopoeia standards (GIZ, 2012); 140 recognize the U.S. Pharmacopeia (USP, 2013), and 37 the European Pharmacopoeia (Council of Europe, 2013). (Some countries reference different pharmaco- peial standards for different drugs and may therefore officially use more than one pharmacopeia.) Some understandings of a substandard medicine emphasize the manu- facturer’s market authorization. (See Table 1-3.) This distinction becomes important when a substandard product is found in commerce. The regu- latory agency can then take corrective action with the manufacturer and recall other products from the same batch. During this process, the manu- facturer may prove with verified records and batch samples that the poor- 4 For amodiaquine hydrochloride tablets, the acceptable drug concentration range under U.S. Pharmacopeia is 93 percent to 107 percent of labeled amount (USP, 2011a); under Inter- national Pharmacopoeia it is 90 percent to 110 percent (WHO, 2011c). For quinine sulfate tablets, the acceptable drug concentration range under U.S. Pharmacopeia is 90 percent to 110 percent of the labeled amount (USP, 2011b); under British Pharmacopoeia, it is 95 percent to 105 percent (British Pharmacopoeia, 2012c).

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INTRODUCTION 25 quality drug is not in fact its own. In such a case, the manufacturer is the victim of fraud. The drug in question was falsified and therefore in the domain of law enforcement. The committee considers a drug falsified when there is false represen- tation of the product’s identity or source or both. Falsified medicines may contain the wrong ingredients in the wrong doses. A fake product in legiti- mate packaging is falsified, as is a good-quality product in fake packaging (EMA, 2012). The producer’s intention is theoretically important to the understanding of a falsified drug, though in practice it is often impossible to known what these intentions were. That is, when a licensed manufacturer makes bad drugs, the deliberateness of the mistake is at least debatable. When an underground producer makes a bad-quality product there is not even a pretense of adhering to drug quality standards. This understanding of a falsified medicine is consistent with the broad definition of counterfeit used by WHO and other organizations. A falsified drug may also be called fake, a synonym used in this report and by some scholars, governments, and international NGOs (Bate, 2011; Björkman-Nyqvist et al., 2012; MSF, 2012; Newton et al., 2011). (See Table 1-5.) Often, the difference between a substandard and a falsified medicine is the difference between a known and unknown manufacturer. Manufactur- ers may produce substandard drugs because they failed to adhere to good manufacturing practices or because their internal quality systems failed. Degraded or expired products are also substandard; in some ways, failure to pull these drugs from the market is a quality system failure. Inspection of the manufacturer’s records can usually distinguish between a degraded or expired drug and one that left the factory already outside of specifications. Falsified drugs are usually also substandard. Drug regulators have no authority over underground manufacturers; nothing can be said about The Indian generics house V.S. International’s authentic ciprofloxacin (left) and a falsified version (right). SOURCE: Bate, 2012b.

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TABLE 1–4 National Definitions of Substandard Pharmaceuticals 44 Country Definition Cambodia A substandard drug is a registered product, whose specifications are outside of accepted standards as defined by reference pharmacopoeias (Phana, 2007). China “A drug with content not up to the national drug standards is a substandard drug. A drug shall be treated as a substandard drug in any of the following cases: 1. the date of expiry is not indicated or is altered; 2. the batch number is not indicated or is altered; 3. it is beyond the date of expiry; 4. no approval is obtained for the immediate packaging material or container; 5. colorants, preservatives, spices, flavorings or other excipients are added without authorization; or 6. other cases where the drug standard are not conformed.”a Philippines “Substandard product means the product fails to comply, with an applicable risk of injury to the public.”b Thailand Substandard drugs are: “1. Drugs produced with active substances which quantity or strength are lower than the minimum or higher than the maximum standards prescribed in the registered formula to a degree less than the stated in Section 73 (5) [of the Thai Drug Act of 1967]. 2. Drugs produced so that their purity or other characteristics which are important to their quality differ from the standards prescribed in the registered formula under Section 79 or drug formulas which the Minister has ordered the drug formula registry under Section 86 bis [of the Thai Drug Act of 1967].”c a Drug Administration Law of the People’s Republic of China. (China). 2001. Chap. V, Art. 49. b Republic Act No. 7394, The Consumer Act of the Philippines. (Philippines). Tit. I, Art. 4 (bt). c Thailand Drug Act, B.E. 2510 (1967). (Thailand). Chap. VIII, Sec. 74.

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TABLE 1–5 Other Terms of Interest Organization Term Definition Oxfam Falsified Medicines for which the identity, source, or history was misrepresented (parent category for fake and falsely labeled) (Brant and Malpani, 2011). Falsely labeled The true properties of the product do not correspond to the information provided (Brant and Malpani, 2011). Fake Does not contain the correct type of concentration of active and/or other ingredients (Brant and Malpani, 2011). European Falsified “Falsified medicines are fake medicines that pass themselves off as real, authorized medicines. Falsified Medicines medicines may: Agency • contain ingredients of low quality or in the wrong doses; • be deliberately and fraudulently mislabeled with respect to their identity or source; • have fake packaging, the wrong ingredients, or low levels of the active ingredients. Falsified medicines do not pass through the usual evaluation of quality, safety and efficacy, which is required for the European Union (EU) authorization procedure. Because of this, they can be a health threat” (EMA, 2012). Brazil Falsification “Illicit reproduction of registered medicine, made by [a] third [party], with the fraudulent intention of of medicines giving a legitimate appearance of what is not legitimate” (Anvisa, 2006). Adulteration “Intervention of [a] third [party], with the purpose of altering legitimate medicine in [a] way to commit therapeutic effectiveness and/or to turn it noxious to the health; or intervention that modifies the specifications of the registration fraudulently, changing its registered formulation” (Anvisa, 2006). Alteration “Modification for addition or subtraction of components of the medicine and/or if the pharmaceutical formula, without previous and expressed approval of the National Agency of Health Surveillance” (Anvisa, 2006). continued 45

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TABLE 1–5 Continued 46 Organization Term Definition Council of the Falsified “Falsified medicinal product [is] any medicinal product with a false representation of: European Union a) its identity, including its packaging and labeling, its name or its composition as regards any of the ingredients including excipients and the strength of those ingredients; b) its source, including its manufacturer, its country of manufacturing, its country of origin or its marketing authorization holder; or c) its history, including the records and documents relating to the distribution channels used. This definition does not include unintentional quality defects and is without prejudice to infringements of intellectual property rights.”a Thailand Deteriorated The following are deteriorated drugs: Drugs “1. A drug the expiry date of which as shown on the label has been reached. 2. A drug which has so denatured as to have the characteristics of a fake drug.”b Fake The following drugs or substances are fake drugs: “1. A drug or substance which is wholly or partly an imitation of a genuine drug; 2. A drug which shows the name of another drug, or an expiry date which is false; 3. A drug which shows a name or mark of a producer, or the location of the producer [of] the drug, which is false; 4. Drugs which falsely show that they are in accordance with a formula which has been registered; and 5. Drugs produced with active substances which quantity or strength [is] lower than the minimum or higher than the maximum standards prescribed in the registered formula by more than twenty percent.”c India Misbranded “A drug shall be deemed to be misbranded— a) if it is so colored, coated, powdered or polished that damage is concealed or if it is made to appear of better or greater therapeutic value than it really is; or b) if it is not labeled in the prescribed manner; or c) if its label or container or anything accompanying the drug bears any statement, design or device which makes any false claim for the drug or which is false or misleading in any particular.”d

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Adulterated “A drug shall be deemed to be adulterated— a) if it consists, in whole or in part, of any filthy, putrid or decomposed substance; or b) if it has been prepared, packed or stored under insanitary conditions whereby it may have been contaminated with filth or whereby it may have been rendered injurious to health; or c) if its container is composed in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health; or d) if it bears or contains, for purposes of coloring only, a color other than one which is prescribed; or e) if it contains any harmful or toxic substance which may render it injurious to health; or f) if any substance has been mixed therewith so as to reduce its quality or strength.”e a Directive 2011/62/EU on the community code relating to medicinal products for human use, as regards the prevention of the entry into the legal supply chain of falsified medicinal products [2011] OJ L174/77-78. b Thailand Drug Act, B.E. 2510 (1967). (Thailand). Chap. VII, Sec. 75. c Thailand Drug Act, B.E. 2510 (1967). (Thailand). Chap. VII, Sec. 73. d The Drugs and Cosmetics Act and Rules. (India). As corrected up to 30th April, 2003. Chap. III, 9C. e The Drugs and Cosmetics Act and Rules. (India). As corrected up to 30th April, 2003. Chap. III, 9A. 47

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