This document discusses counterfeit drugs and medical devices, specifically in India. It begins by defining counterfeit products and noting that about 10-30% of medicines in low and middle income countries like India are estimated to be counterfeit. It then discusses challenges posed by counterfeit medicines in India, including lost business for manufacturers, undermining generics adoption, and increasing economic and social burdens. The document also outlines relevant Indian laws for addressing counterfeiting like the Drugs and Cosmetics Act of 1940. Finally, it states that combating counterfeit medicines requires collaboration between law enforcement, manufacturers, and health professionals.
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TOC PROJECT PPT
1. RAJIV GANDHI NATIONAL UNIVERSITY OF LAW
PATIALA
Project
“The Impact of counterfeiting on International Markets- A
Review”
Research Focus: The Business of Counterfeit Drugs
Concerned subject
“Transnational Organised Crimes”
Submitted to-
Dr. Ivneet Walia
Asst. Professor of Law
Submitted By-
Anurag Dubey
17154, Group-17
Year – 4th
2. Acknowledgement
The completion of this undertaking could not have been possible without the
participation and assistance of so many people whose name may not all be
enumerated. Their contribution are sincerely appreciated and indebtedness
particularly to.
Dr. Ivneet Walia for her endless support and understanding spirit during
our project. To all relative, friends and other who in one way or another
shared their support, either moral, financially and physically, thank you.
Above all, to the great Almighty, the author of knowledge and wisdom, for
his countless love.
Thank you
3. “Contents
1. PREFACE............................................................................................................................4
2. COUNTERFEIT DRUGS AND MEDICAL DEVICES...................................................4
1. Counterfeit products are those: ............................................................................. 5
3. TACKLING COUNTERFEIT MEDICINES IN INDIA.................................................6
1. Challenges posed by counterfeit medicines.......................................................... 7
4. INDIAN LAW PERSPECTIVE ........................................................................................8
5. STRATEGIES TO OVERCOME THE ISSUE OF COUNTERFEIT MEDICINES..10
1. Number of strategies........................................................................................... 11
6. CONCLUSIVE COMMENTS .........................................................................................12
7. BIBLIOGRAPH...............................................................................................................14
4. 1. PREFACE
To counterfeit means to imitate something authentic, with the intent to steal, destroy, or
replace the original, for use in illegal transactions, or otherwise to deceive individuals
into believing that the fake is of equal or greater value than the real thing. Counterfeit
products are fakes or unauthorized replicas of the real product. Counterfeit products are
often produced with the intent to take advantage of the superior value of the imitated
product. The word counterfeit frequently describes both the forgeries of currency and
documents, as well as the imitations of items such as clothing, handbags, shoes,
pharmaceuticals, automobile parts, unapproved aircraft parts (which have caused many
accidents), watches, electronics (both parts and finished products), software, works of
art, toys, and movies.1
Counterfeit products tend to have fake company logos and brands (resulting in patent or
trademark infringement in the case of goods), have a reputation for being lower quality
(sometimes not working at all) and may contain toxic substances such as lead. This has
resulted in the deaths of hundreds of thousands of people, due to automobile and aviation
accidents, poisoning, or ceasing to take essential compounds (e.g., in the case a person
takes non-working medicine).2
The counterfeiting of money, mostly paper money, is usually attacked aggressively by
governments worldwide.
2. COUNTERFEIT DRUGS AND MEDICAL DEVICES
The term counterfeit drug has been defined differently in different countries limiting both
the exchange of information between countries and a real understanding of the extent of
the problem globally. To address this problem, the World Health Organization (WHO)
has proposed that a counterfeit medicine (branded or generic products) be defined as one
which is deliberately and fraudulently mislabeled with respect to identity and/or source.3
1
Christoph Böhm, Maximilian Hofer "Physical Unclonable Functions in Theory and Practice", p. 46,
2
Counterfeit culture documentary. Archived from the original on 2015-05-05. Retrieved 2013-06-21.
3
World Health Organization. General Information on Counterfeit Medicines [webpage on the Internet].
Available from: http://www.who.int/medicines/services/counterfeit/overview/en/..
5. This however should not be confused with the term substandard medicines, which may
be described as genuine drug products which do not meet the required quality
specifications. “Gray pharmaceuticals” is a term recently used for the marketing of
competitive brands by illicit profiteers who do not have regulatory approval.
1. Counterfeit products are those:
1) without active pharmaceutical ingredients (APIs), including the wrong ingredients,
which may or may not be toxic. In this case, the API is often replaced by inexpensive
substitutes such as flour, curcuma, or cassava in oral formulations and water in injections.
Even more of a problem is that these products may contain toxic or pathogenic chemical
impurities, which have potentially lethal consequences, with an example being methanol
detected in a counterfeited amoxicillin injection;4
2) with incorrect quantities of these APIs, where these products usually contain less than
the stated amount. Examples here are less expensive or outdated drugs, which may be
repackaged, such as diazepam syrup which was sold as cotrimoxazole syrup in Nigeria
and erythromycin sold as the antimalarial, artesunate, in southeast Asia. Another example
is praziquantel, used against schistosomiasis, where the forgery was detected because
each tablet should have contained 600 mg of API and the tablets only weighed 480 mg
in total. In addition, the leaflet was written in poor English, without any manufacturer
identification;5
3) with fake or counterfeit packaging, where the packaging may be copied, or in some
cases modified, to escape prosecution for infringing intellectual property.6
The problem is growing, with the World Health Organisation concerned that over 50%
of online medications could be fake.7
As such, illegal online pharmacies and other similar
services are now finding it easier to sell and distribute their fraudulent wares. In March
2020, an Interpol initiative called Operation Pangea XIII saw authorities from 90
countries take collective action against the illicit online sale of medicines and medical
4
World Health Organization. General Information on Counterfeit Medicines [webpage on the Internet].
Available from: http://www.who.int/medicines/services/counterfeit/overview/en/.
5
Sulaiman SM, Traoŕe M, Engels D, Hagan P, Cioli D. Counterfeit praziquantel. Lancet. 2001;358:666–
667.
6
Counterfeit drugs and medical devices in developing countries, https://www.dovepress.com/counterfeit-
drugs-and-medical-devices-in-developing-countries-peer-reviewed-fulltext-article-RRTM#r_ref3,
7
Counterfeit Medications | Global Statistics | Australia Risks, https://www.pharmout.net/counterfeit-
medications-global-statistics/,
6. products, resulting in the seizure of counterfeit pharmaceuticals worth more than $14
million.8
A World Health Organization (WHO) report in 2017 said, “About 10.5% of medicines
sold in low and middle-income countries, including India, are substandard and falsified."
This is especially alarming at a time when the world is anxious about the adequacy of
basic medicine supplies, given the reduced production and increased demand mostly
everywhere.9
3. TACKLING COUNTERFEIT MEDICINES IN INDIA
India is one of the leading global producers of low-cost generic medicines due to its high
domestic demand and inexpensive manufacturing costs. The country's pharmaceutical
market is the world's third largest in terms of volume, but the thirteenth largest in
value.10
However, counterfeiting is pervasive, with an estimated 20 per cent ($4.3 billion
in 2013-14) of India's drug market comprised of counterfeit drugs.11
While counterfeiting
is a global issue, it is much more prevalent in low and middle income countries with an
estimated 10 to 30 per cent of medicines in these countries being counterfeit, compared
to just one per cent of medicines in high-income countries.12
A counterfeit medicine is defined as one that either contains the wrong active ingredient,
none of the specified active ingredient, or the correct active ingredient at the wrong
dose.13
It is estimated that three quarters of counterfeit medicines produced globally
originate from India, which seriously undermines the international reputation of its
8
Mike Seed, COVID and the growing threat of counterfeit medicines, Pharma Times online,
https://www.pharmatimes.com/web_exclusives/COVID_and_the_growing_threat_of_counterfeit_medici
nes_1368856
9
Opinion | The menace of counterfeit drugs that India must fight,
https://www.livemint.com/opinion/online-views/the-menace-of-counterfeit-drugs-that-india-must-fight-
11596981009560.html
10
Indian Pharmaceutical Industry, February 2018. See also:
https://www.ibef.org/industry/pharmaceutical-india.aspx
11
Fake Drugs from India Present a Public Health Threat, 24 February 2014. See also:
https://safemedsonline.org/2014/02/fake-drugs-india-present-public-health-threat/
12
Counterfeit drugs, 7 April 2014. See also: https://www.cdc.gov/features/counterfeitdrugs/index.html
13
Counterfeit medicine. See also:
https://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/CounterfeitMedi
cine/
7. rapidly developing pharmaceutical sector.14
Some of the main reasons for the large
counterfeit medicines market in India include:
limited access to medical care, especially in rural areas
fragmented supply chain
lack of consumer awareness
prevalent practice of self-medication
high cost of genuine medicines
weak enforcement of legislation and corruption
prevalence of internet pharmacies
technology advancements in counterfeiting
Most counterfeit medicines are taken unknowingly, as detecting counterfeit medicines is
difficult, even for health care professionals.
1. Challenges posed by counterfeit medicines
The large counterfeit trade in India has created a number of complex challenges for the
health care and life science industries.
Lost business opportunities: the presence of counterfeits can result in the loss
of market share and business opportunities for manufacturers of genuine
pharmaceutical products. It is estimated that counterfeit medicines contribute to
a loss of $46 billion annually to pharmaceutical companies worldwide.
Undermining the adoption of generics: an estimated 90 per cent of the value of
India's drug market is dominated by branded generics.8
In order to reduce health
care costs, many governments promote the use of less expensive unbranded
generic medicines, but the availability of counterfeits is an obstacle to uptake.
Increasing the economic and social burden: the use of counterfeit medicines
results in an increase in cost to the health care system due to the need for further
interventions for unwanted side effects and/or advanced disease progression. This
is a particular issue for Indians, where out of pocket drug spending is already high
at almost 70 per cent, and affordability levels are low.
14
Verma S, Kumar R and Philip P. The Business of Counterfeit Drugs in India: A Critical Evaluation. See
also: https://www.ripublication.com/ijmibs-spl/ijmibsv4n2spl_04.pdf
8. Resourcing: to tackle the issue of counterfeits, the Indian government has
employed various anti-counterfeiting strategies, but with limited impact, largely
due to India's Central Drugs Standard Control Organization, the country's drug
regulator, having only 323 employees in 2014, about two per cent the size of the
FDA. This under-resourcing is likely to undermine the success of any future
strategies.
4. INDIAN LAW PERSPECTIVE
In India, we do not have specific laws relating to piracy and counterfeiting of goods.
Under trademark laws in India, the rights holder or owner of the brand has rights under
the law of “passing off”. Passing off refers to the production of goods under the same or
similar brand attempting to cash in on the goodwill of the true owner of the brand. India
is also a member of TRIPS and under the TRIPS Agreement ‘counterfeit trademark
goods’ are goods that bear, without authorisation, a trademark that is identical to, or
which cannot be distinguished in its essential aspects from, a registered trademark.6
Article 61 of TRIPS provides that member states need to provide for criminal procedures
and penalties to be applied in cases of wilful trademark counterfeiting or copyright piracy
on a commercial scale.15
The India Customs Act 1962, read with the IP Rights (Imported Goods) Enforcement
Rules 2007 allows trademark, designs, brand owners to record their rights with Indian
Customs Authorities for the seizure of imported counterfeit goods. Under the Customs
Act, counterfeit goods are per se prohibited goods so the Authority will notify the rights
holder of any imported goods and if found to be fake, the same will be destroyed in front
of the rights holder. In some instances, the Authority will also notify the rights holder
even if they haven’t registered with the Authority. Counterfeit and piracy in India are
cognizable offences, that is, law enforcement has search and seizure rights. In addition,
criminal liabilities may be attached to offences under the Trademarks Act, Copyright Act
and Geographical Indications Act.
15
https://www.wto.org/english/docs_e/legal_e/27-trips_05_e.htm,
9. Counterfeiters of spurious drugs in India are also accountable under the Drugs and
Cosmetics Act 1940 (DCA). Spurious drugs here are defined as those that “deliberately
and fraudulently mislabeled and manufactured to mislead patients by concealing their
identity, source of manufacture and its content to profiteer on the popularity of fast-
moving branded or generic medicines”.16
Substandard drugs refer to drugs that are
deemed to be Not of Standard Quality (NSQ) or substandard if it fails to comply with the
standards specified under the DCA.17
Under the DCA, offences are cognizable and
violators of the Act may be processed through the Indian Code of Criminal Procedure,
1973. Law enforcement is permitted under the DCA to inspect, seize and confiscate any
spurious, adulterated and misbranded drugs.
Another interesting element is the definition of “drugs” under the DCA. The term ‘drugs’
has been very broadly defined under the act. It includes “all medicines for internal or
external use of human beings or animals and all substances intended to be used for or in
the diagnosis, treatment, mitigation or prevention of any disease or disorder in human
beings or animals…and substances intended to be used for the destruction of vermin or
insects which cause disease in human beings or animals as may be specified from time
to time by the Central Government by notification in the Official Gazette18
. Therefore,
this definition encompasses all quintessential drugs and medicines but also includes “any
substance” that is intended to mitigate or treat any disease in human beings or animals.
The definition further gives the central government the right to issue notifications to
include any such substance within the definition of “drug” under the DCA and bring it
within the scope of the DCA and its rules. For example, by notifications (S.O. 1335 dated
02.06.1961 and X.11013/2/72-D dated 09.07.1975) the government stated that if the
composition of the product possesses disinfectant properties or claim to possess
disinfectant properties, these products would be considered within the definition of
“drugs” under the DCA. Thereby, including all disinfectants for fabric, surfaces, air and
water, sterilants, pesticides, etc within the scope of the DCA. In addition, in light of the
Covid-19 situation, the government has issued a notification last month that all medical
devices will also be treated as “drugs” and will be regulated under the
16
Drugs and Cosmetics Act (1940), Section 17B, subsections (a) through (e)19, as amended by the Drugs
and Cosmetics (Amendment) Act, 1982
17
Drugs and Cosmetics Act (1940), second schedule, Section 5 (a) and (b), Chapter V.
18
Sections 3(b)(I), 3(b)(ii) of the DCA.
10. DCA11 from April 1, 2020.
We can only imagine the exhausting task of the law enforcement agencies to seize and
prosecute such counterfeiters, in addition to maintaining the peace and security in this
time of crisis. Therefore, we can do our part by doing our due diligence and purchasing
products only by regulated sources, and by reporting any counterfeit product that we may
come across. Online sites have their own procedures for reporting fake goods. Amazon,
for example, has an Intellectual Property Right Infringement Report online form that can
be accessed on their portal. Rights holders should register with the Customs Authorities
and for any counterfeit product or spurious drugs we should contact the nearest law
enforcement authority to initiate due process i.e. search and seizure remedies.
5. STRATEGIES TO OVERCOME THE ISSUE OF
COUNTERFEIT MEDICINES
Drug counterfeiting has become a worldwide problem. There is no country, which can
deter the existence of counterfeit drugs in its pharmaceutical market. Counterfeiting or
falsified medicines requires collaboration at national, regional and international levels
between the law providers, enforcement agencies, manufacturers and suppliers. Health
professionals and medical practitioners in particular have a crucial role to play in
notifying patients to counterfeit medicines and educating them to detect their presence.
In pursuance to this, many Pharma companies are using holograms so that consumers can
determine the authenticity of the drug by checking the hologram, but these days, fake
drug manufacturers have been able to copy the holograms as well. Therefore there is a
need to upgrade the technology from the manufacturer’s end as well. Companies have
also started using barcodes on medicines that can be photographed using smart phones
like blackberry and I-phone and the image messaged to a number. This also depends on
the quality of the camera. This method again is accessible only to the few consumers who
have smart phones and not the majority. In all, there is little that a consumer can do at
his/her end to determine the authenticity of the drug. Government, Law enforcement
agencies and Pharmaceutical industries should take necessary steps to provide generic
and branded medicines easily available to consumers at reasonable rates so as to meet
their demand effectively. In order to combat counterfeiters, it is necessary to develop and
11. enforce appropriate mechanisms of effective collaboration between health authorities,
police, customs, the judiciary, manufacturers, wholesalers, retailers, health professionals
and consumers. The distribution channel of Indian pharmaceutical industry should be
regulated effectively so as to avoid counterfeiters to penetrate into the supply chain with
their inferior drugs. The distribution channel should be upgraded with the latest
technological instruments like Barcode, Holograms, hidden identification marks, Radio
Frequency Identification (RFID) chips and tags so that individual serial numbers on each
product can be tracked and traced through the supply chain.19
1. Some of strategies
There are a number of strategies that can be implemented to tackle the issue of counterfeit
medicines.
1. Raising public awareness: containing the spread of counterfeit medicines is a
big challenge, but educating patients and improving awareness is a good place to
start. Health care professionals, medical practitioners and pharmaceutical
companies all have a role to play in notifying patients and educating them to
detect the presence of counterfeits. This is a sizeable challenge given that over a
quarter of the population is illiterate, and almost 70 per cent of the population live
in rural areas where self-medication is prevalent. However, approximately 78 per
cent of India's 650 million mobile phone users have access to the internet, and
online education may be a far more effective way to tackle the issue quickly and
efficiently.20
2. Implementing innovative anti-counterfeiting measures: inadequate anti-
counterfeiting measures by pharmaceutical companies make their products
vulnerable to counterfeiting. The presence of counterfeit medicine brands in the
market lead to drug recalls and subsequent damage to brand image and company
reputation. Most companies are following worldwide mandatory methods like
mass serialisation in which machine-readable codes containing a serial number
are added to each pack of medicines, enabling the product to be tracked and
19
Saurabh Verma, Rajender Kumar and P.J. Philip, The Business of Counterfeit Drugs in India:
A Critical Evaluation, Research Scholar, Department of Humanities & Social Sciences, NIT,
Kurukshetra–136119, Haryana, https://www.ripublication.com/ijmibs-spl/ijmibsv4n2spl_04.pdf
20
Iyengar R. India poised for smartphone revolution, 28 September 2017. See also:
http://money.cnn.com/2017/09/26/technology/india-mobile-congress-market-numbers/index.html,
12. traced. Pharmaceutical companies can fight the rise of counterfeiting by
implementing new generation anti-counterfeiting technologies, such as the use of
forensic markers (chemical, biological and DNA taggants), cloud-based supply
chain data repositories, and blockchain technology in supply chains. Companies
can also use external providers of anti-counterfeiting technologies to avoid the
need to create their own systems.
3. Developing stricter laws: in India, The Drugs and Cosmetics Act (1940)
regulates the import, manufacturing and distribution of drugs, empowering
government agencies to inspect, seize and confiscate products found to be
'adulterated spurious misbranded'. The act was amended in 2008, which increased
the punishment to offenders, but there are still certain challenges, including
inconsistent application of laws across states, weak drug quality investigation
systems, and weak prosecution of counterfeit medicine manufacturers. According
to the WHO, 50 per cent of drugs sold online are fraudulent.21
New protocols
which the EU and US aim to implement by 2019 are intended to tackle this. The
EU's Falsified Medicines Directive will require companies to adopt mass
serialisation, whereas the US Drug and Security Act will require authentication
at every supply chain juncture. The EU is also fighting illegal online pharmacies
that supply counterfeit medicines by requiring them to display a logo identifying
themselves. This logo links to the website of the national competent authority
listing all legally operating online pharmacies. More effective adherence to
existing laws and adopting stricter laws has the potential to improve the fight
against counterfeiting.22
6. CONCLUSIVE COMMENTS
In summary, the availability and distribution of falsified products is an age-old problem,
with higher penetration in LMICs (low and middle-income countries), a situation that is
likely to get worse as disruptions place greater stresses on regulatory and supply chain
21
Growing threat from counterfeit medicines. See also: http://www.who.int/bulletin/volumes/88/4/10-
020410/en/
22
Pratik Avhad, Tackling Counterfeit Medicines In India,
https://www.mondaq.com/uk/healthcare/691144/tackling-counterfeit-medicines-in-india
13. processes. In the age of COVID-19, there is an ongoing need to ensure adequate supplies
of medicines and medical equipment, not only for meeting the needs of the pandemic but
also for other health needs. In meeting these needs, governments, pharmaceutical
regulatory agencies, and associate supply chains must have practical and financially
supported strategies to ensure quality-assured medicines are made available for the
determined need. More importantly, it is imperative medicines regulatory authorities and
relevant stakeholders implement robust authentication and procurement processes to
ensure quality medicines supply.40 In line with this, we propose the following set of
strategies can be cascaded to relevant stakeholders to ensure the availability of quality
medicines during the time of COVID-19 and beyond
14. 7. BIBLIOGRAPH
World Health Organization. General Information on Counterfeit Medicines
[webpage on the Internet]. Available from:
http://www.who.int/medicines/services/counterfeit/overview/en/..
World Health Organization. General Information on Counterfeit Medicines
[webpage on the Internet]. Available from:
http://www.who.int/medicines/services/counterfeit/overview/en/.
Sulaiman SM, Traoŕe M, Engels D, Hagan P, Cioli D. Counterfeit praziquantel.
Lancet. 2001;358:666–667.
Growing threat from counterfeit medicines. See also:
http://www.who.int/bulletin/volumes/88/4/10-020410/en/
Pratik Avhad, Tackling Counterfeit Medicines In India,
https://www.mondaq.com/uk/healthcare/691144/tackling-counterfeit-medicines-
in-india
Saurabh Verma, Rajender Kumar and P.J. Philip, The Business of Counterfeit
Drugs in India:A Critical Evaluation, Research Scholar, Department of
Humanities & Social Sciences, NIT, Kurukshetra–136119, Haryana,
https://www.ripublication.com/ijmibs-spl/ijmibsv4n2spl_04.pdf
Drugs and Cosmetics Act (1940), Section 17B, subsections (a) through (e)19, as
amended by the Drugs and Cosmetics (Amendment) Act, 1982
https://www.wto.org/english/docs_e/legal_e/27-trips_05_e.htm,
Mike Seed, COVID and the growing threat of counterfeit medicines, Pharma
Times
online,https://www.pharmatimes.com/web_exclusives/COVID_and_the_growin
g_threat_of_counterfeit_medicines_1368856
Indian Pharmaceutical Industry, February 2018. See also:
https://www.ibef.org/industry/pharmaceutical-india.aspx
Counterfeit medicine. See also:
https://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicin
eSafely/CounterfeitMedicine/