A spurious drug is an illegitimate outcome of greed, one that hits consumers at their weakest point. It either doesn’t deliver the expected benefit of combating disease, or harms, even fatally. That’s why both people and governments require the rot from this deliberate fraud to be stemmed. There is regulatory momentum to do so in India, as Mint has shown, with focused reporting on this issue over the past 19 months.
Illustration: Jayachandran / Mint
But global pressure is building up, less from genuine concern for public health, more for making it a ploy to enforce private property rights. Several bodies are conflating patent, copyright and trademark infringement with fake drugs and lobbying to have counterfeiting encompass all this — which can lead to perverse outcomes in the future. The health ministry’s rejection of the World Health Organization’s proposed broader definition of counterfeit drugs is a correct stance in that context.
WHO defines a counterfeit drug as one which is “deliberately and fraudulently mislabelled with respect to identity, composition, and/or source.” It wants to remove the clause “deliberately and fraudulently” and include the term “history”. This has led to valid concerns that generic drugs, which India is a preferred supplier, may be treated as counterfeit. A case could be made by, say, Roche, which is fighting a lawsuit against Cipla for patent and trademark infringement for the anti-infective Valgancyclovir, sold as Valcyte by Roche and Valcept by Cipla.
Why is WHO mixing up matters? The controversy arose from its IMPACT initiative, set up in 2006 by some member states. It has been criticized by developing countries and public health experts who highlight its industry-dominated composition, which implies a conflict of interest; its agenda for addressing counterfeiting as an end in itself; and the hasty approach in getting its enforcement-led agenda endorsed.
Patents, trademarks and copyrights are private rights provided in public laws that call for private enforcement actions. Global interest groups, however, want public enforcement — so, even customs authorities can seize or delay the transit of legitimate generic drugs on suspicion of counterfeiting. This could be yet another non-tariff barrier to legitimate trade. Their stance is that governments’ issue of legal compulsory licences in public interest has the same effect as counterfeiters — of blocking innovation. Several global initiatives, such as the Anti-Counterfeiting Trade Agreement (to conclude in 2009) led by the US, are pushing this trend of IP maximalism.
In all this, what is getting ignored is that patent regimes, which allow monopoly rights-based exorbitant prices, create incentives to counterfeit as well.
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