A Counterfeit Drug Treaty: Great Idea, Wrong Implementation

On Nov 25, in Istanbul, Turkey, Ministers of Justice from Europe and around the world will meet. Many will attend to sign up to the Council of Europe's MEDICRIME Convention, a proposed treaty to criminalize the manufacture and trade in counterfeited drugs and other medical products. The intent behind this treaty is good, but the wording creates serious difficulties, and European officials lack credibility to pursue this treaty globally as they would like. Only a treaty initiated by WHO will suffice.

Drug counterfeiting is a globalized public health crisis. Outside advanced countries, perhaps 15% of the global drug supply is counterfeit, rising in parts of Africa and Asia to over 50%. It is a trade that kills: in some countries' markets, over half of artesunate treatments for Plasmodium falciparum malaria were counterfeits, containing no active ingredient.

We applaud the notion of a treaty to combat counterfeit drugs. Presently, there is no agreement on how to define a counterfeit drug, let alone a scheme in international law to make counterfeiting a crime and pursue its perpetrators around the globe. Without such an agreement, it is largely impossible for counterfeiters to be extradited from one country to another, or to be prosecuted effectively for their transnational crimes.

As we have established elsewhere,4 the necessary legal doctrines exist, and have done since as long ago as a 1929 treaty to criminalize currency (ie, money) counterfeiting--so there should be no insuperable barrier to a treaty that internationally criminalizes counterfeit drugs and medical products.

The Council of Europe's approach, however, misses the mark, in three ways. First, the proposed MEDICRIME Convention contains a poison pill that would severely impede new generic drugs. Currently, in most countries, a generic drug company that makes, stockpiles, or markets a product without the authorization of an intellectual property owner is liable for infringement in civil courts. But countries in Europe or elsewhere that join the Convention will be required, under Article 8(a)(i), to enact criminal offences against such unauthorized activities--thus making infringement a criminal matter. Because about 30% of generic drug launches infringe, to impose criminal liability--perhaps even imprisonment--will have a vast chilling effect on the generic drug industry.

Second, the MEDICRIME Convention proposes to criminalize honest medicine manufacturers for unintentional mistakes. As worded, it would criminalize the "intentional manufacturing" of counterfeit products, but defines "counterfeit" products too broadly, as needing only "a false representation as regards identity and/or source". Thus those who intentionally manufacture a medicine, but inadvertently make a false representation about it, could face prosecution. Since accidents happen even at careful companies--egg, heparin products manufactured by Baxter, which were recalled because of a previously unknown contaminant--punishing such accidents criminally is draconian and unjust.

Third, Europe's medicine policy is distrusted by important developing countries, particularly India and Brazil. In 2008 and 2009, at least 19 separate Indian shipments of generic drugs destined for Brazil and elsewhere were seized by European authorities, leading to a World Trade Organization lawsuit.8 The seized drugs were either initially denied transit and returned to India, or had transit delayed for far more than the required maximum limit of 20 days. Reports also implicate European Union officials in crafting an anti-counterfeit law in Kenya, and helping draft one in Uganda, which, similar to the proposed MEDICRIME Convention, risked criminalization of proper generic drugs under false cover of forbidding counterfeits. Even if, as seems likely, these actions were carried out by a small number of overzealous officials, rather than representing any cross-European policy, the resulting tensions with Brazil and India were palpable at the 2010 World Health Assembly, and make consensus on a European-led treaty all but impossible.

These problems might have been avoided if the Council of Europe had sought public comment as it drafted the MEDICRIME Convention. Regrettably, the Council finalizes the current draft behind closed doors, including in its working group the brand name pharmaceutical industry (Sanofi -Aventis) but not the generics industry.10 If there is any last-minute opportunity to amend away the draft treaty's serious faults before the November signing ceremony makes it law, the Council is not saying so.

We accordingly recommend the Council of Europe cancel its signing ceremony, and make way for a more carefully worded draft, off ered by a less controversial messenger. To that end, WHO should convene negotiations for an anti-counterfeiting treaty, as it successfully did with the Framework Convention on Tobacco Control, for two reasons.
First, the current tensions between Europe and developing countries cannot be allowed further to delay action on the central reality, accepted by all, that drug counterfeiting is bad. A WHO-led treaty process can reaffirm this central fact, while providing a forum for all sides to argue their interests. Brazil and India have among the world's most talented diplomatic corps, and it is simply implausible that Europe could pull the wool over their eyes.

Second, unlike the secretive process the Council of Europe used to author the MEDICRIME Convention, open and well-attended treaty negotiations tend to iron out textual difficulties and unintended consequences. Probably the major challenge for those negotiations is to define the bright line that criminalizes deliberately fraudulent counterfeit drugs, while allowing legitimate generic medicines. The distinction should aim to heighten public health protection, and not intellectual property protection (which already has its own treaties), to avoid repeating the error of Article 8(a)(i).

It might sound daunting in Geneva, but the time has come for WHO to lead a treaty against counterfeit drugs. Probably no other entity can do it--and it must be done.

Roger Bate is the Legatum Fellow in Global Prosperity. Amir Attaran is a member of the Faculties of Law and Medicine at the University of Ottawa.

Photo Credit: stock.xchang/forwardcom

Also Visit
AEIdeas Blog The American Magazine
About the Author



What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
  • 28
  • 29
  • 30
  • 31
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.