Opinion Pieces

India, Brazil and South Africa make a stand on falsified and substandard medicines

Last week the Permanent Missions to the UN in Geneva of India, Brazil and South Africa (IBSA) held a seminar to explore the current challenges and long-term solutions to the issue of falsified and substandard medicines. Whatever you call them, (and the overlooked nuances between definitions is partly the problem), the issue of “counterfeit”, falsified, spurious, and substandard medicines will prove to be a divisive one in the coming years. On the surface this issue is about access to medicines and the realization of the right to health, it is about protecting populations from increasingly sophisticated international criminals who endanger people’s lives and undermine confidence in already fragile health systems. But it is also about deeply vested business interests with a whole lot of money hanging in the balance.

The purpose of this event on the one hand seemed to be about raising awareness, but it also seemed to me to be about expressing to the diplomatic community the logic behind the argument with which India and Brazil are taking the EU to court over accusations of trade violations. Falsified and substandard medicines refer to a basket of challenges. It could mean that medicines are mislabelled, poorly packaged, transported and stored with disregard for safety standards, or that they are out-right pirated goods prepared with potentially ineffective or even harmful ingredients. The result in these cases is the same-consumers and patients are misled and endangered, and already overburdened health systems and regulatory agencies in low- and middle-income countries are further strained. Stopping these counterfeit medicines from entering the market is a necessary and straightforward activity requiring international cooperation; however, anti-counterfeiting initiatives have also been employed as strategic tactics by major pharmaceutical industries to protect their increasingly embattled market shares from the threat of a growing generics industry in emerging economies.

The EU is a major player in this new policy minefield. In 2008 and 2009 there were 20-odd cases of seizures of Indian-made generic drugs in transit at European ports, with 16 reported in the Netherlands. The seizures were justified under national customs laws which allow goods in transit to be stopped if they are suspected of being either illegal or substandard. According to the India Times, the seized medicines were impounded following complaints from European companies that held valid patents to these medicines in their own countries. The Indian government argues that such seizures are against the multilateral intellectual property agreement TRIPS as the medicines were off-patent both in India and the country where they were being exported [1]. It would seem that countries with an interest in protecting their pharmaceutical industries are using this very real public health and human rights issue to circumvent international trade laws-specifically the built-in flexibilities in the TRIPS agreement that allow for generics to be produced in order to ensure access to life-saving medicines in poor populations.

In May 2010 India and Brazil took the matter to the World Trade Organization (WTO), and despite early October reports in the Indian media that the issue had been resolved, it seems that in fact no breakthroughs have been made. Official talks between India, Brazil, the Netherlands and the EU are likely to escalate into a hearing before the WTO Dispute Settlement Board-the world’s multilateral mechanism for resolving trade quarrels.

The issue of counterfeit medicines is clearly being abused. The position of IBSA is hard to argue against; on their side they claim to be fighting for the welfare of the poor and suffering populations whose right to health is being denied through their inability to access life-saving medicines every time the supply of generics is interrupted. 89.93% of anti-retroviral drugs for the treatment of HIV which are purchased by the Global Fund are from Indian generics companies [2]. At the same time, however, it would be na├»ve not to recognise the business interests of the emerging economies in this issue. India is the world’s largest manufacturer of generic drugs. That said, there is absolutely nothing wrong with India fighting against protectionist measures that don’t allow their goods to compete fairly on the global market. But are we standing on a slippery slope? OECD countries and businesses have been accused of using public health as a front to push through a strong intellectual property enforcement regime [3]. To what extent are India and Brazil now doing the same? That is, using public health as a front to protect their generics industries? To prevent this shouldn’t trade issues be dealt with separately from the public health issues?

The difference for me between the strategies of big pharma countries and generics countries seems to be that generics producers also have the argument of human rights on their side. While a booming generics industry may be threatening the profits of OECD pharmaceutical firms, and while this may have an affect on the welfare of individuals in these industries or mean higher prices which could negatively impact patients in their primary markets-I don’t think anyone’s basic human rights or their means to survive are being jeopardized. The same doesn’t hold when the generics companies are victims of protectionism. Perhaps from a business and trade perspective we have to pick the lesser of two evils.

I fear, however that this will not be the case. Approaching this issue as a matter of international trade law alone means we will quibble over definitions, precedents and statutes. We will ask, was there an IP infringement or a trademark violation? By separating the trade issues from the health and human rights issues we may get a cleaner picture of what’s really going on here and why the parties involved can’t come to an agreement on their own-money and politics will come to the fore-and the multilateral system may be able to solve the trade related aspects of this issue. The necessity to address this problem as both a trade and a human rights issue should be obvious. Questions like “how will the outcome of this case impact access to life-saving medicines” must be asked as well. Special Rapporteur on the Right to Health, Anand Grover, speaking at the IBSA seminar, asked whether the issue of counterfeits wasn’t a “red herring”? “Who are we aiding? Who are we supporting?” provoked Grover. “You [the EU] are very good at promoting human rights, but not when it comes to your pharmaceutical industry, you are protecting them instead.”

The IBSA seminar left me convinced of two things: some trade issues cannot be considered in isolation of the sectors in which they are driving forces. When we are dealing with a key determinant of health-or in this case, of survival-the actors considered in a court for trade disputes must go beyond the companies and customs officials directly involved, indirect victims on both sides must also be discussed. Therefore the engagement of the health and the human rights community in issues of trade and IP is paramount. Second, we must be wary not to confuse two separate issues. The use of the term counterfeit or substandard as a strategy to circumvent trade laws needs to be recognised and discussed separately from the criminal issues of production and trade in truly falsified and dangerous or ineffective medicines.


[1] WTO drug seizure case to stay until EU changes Customs laws: Khullar

[2] statistic referenced by the Special Rapportuer for the Right to Health, Mr Anand Grover, at the IBSA seminar. 15 October 2010

[3] Gopakumar, KM and Sashikant, S. Unpacking the issue of counterfeit medicines. Third World Network, Penang. 2010

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