Legatum Fellow Roger Bate

Good morning, it is a pleasure to speak first at this important conference. It is important because counterfeit drugs kill tens of thousands, maybe hundreds of thousands every year, and so I'm delighted the Wellcome Trust, which does so much to help bring life-saving interventions into our lives, wants to highlight those products that kill.

Let's dive straight in and start with a definition, or rather a discussion of a definition. The word counterfeiting is derived from the words for imitation, and is primarily a legal term rather than a health one, so it serves legal purposes not health purposes.

The WHO defines: "A counterfeit drug is a drug that has been deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and…may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging."

Note the emboldened parts of this WHO definition. Counterfeiting is primarily a labeling issue, in other words it is often an infringement of trademarks (potentially copyright if a slogan or some writing has been copyrighted), but it has nothing at all to do with patents. A counterfeit medicine is usually of unknown quality passed off as something it isn't (this includes a drug which say it is ciprofloxacin and is not copying a brand, but is in fact just baby powder--and hence is not a trademark infringement but is fraudulently mislabeled). In principle the counterfeit could be a perfect copy of a brand (imagine a perfect copy of a Louis Vuitton handbag). But, the chances of the copy being perfect, bioequivalent and hence acting identically in your body, is slim, perhaps slim to none.

Examples of Substandard Drugs

Defining substandard drugs is much more complicated. They will, of course, be defective in some way, and will include counterfeits that are not perfect copies.

Well-Made Drugs

Old Drugs. However, good drugs which have reached the limit of their shelf life and start to become unstable, and hence ineffective and potentially dangerous, are often not destroyed but are relabeled with a new expiry date and sold as new.

Badly stored. Good drugs within expiry date may have been stored badly at some stage in their delivery from manufacturer to pharmacist (this is rarely a problem in EU but is a problem in Africa and SE Asia). For example some central Government stores, many wholesalers and a vast number of pharmacies in poor countries do not have air conditioning at all, or refrigeration where that is required, which can lead to drugs becoming substandard.

Badly-Made Drugs

The final category of substandard drugs is the thorniest, and arguably the most politically intractable, and that is drugs which are simply not manufactured well enough. Making drugs consistently well is difficult and it is just as hard to know how consistent many producers in the poorest nations are--and there are lots of them. I'm not talking here about the top 15 or 20 Indian generics manufacturers, that will be involved in many aid related donations but maybe the bottom 300 in China, or bottom 200 in India or 100 in Nigeria etc.

From a public health standpoint you'd want to be targeting all of these causes of substandard drugs, yet your response, of course, would be different in each case.

Counterfeiters need to be shut down, laws need to be in place to do that, which are then enforced by customs, police, legal system, with support from private investigators, the legitimate drugs industry and scientists, such as our next speaker.

On the other hand, those selling old expired drugs may just need to be educated, others may know they're acting illegally and should be dealt with accordingly. Understanding storage conditions is a matter of education, but again there is a grey area: how does one deal with pharmacists who turn off refrigerators at night to save money and know the possible cost? Lastly, improving GMP, education again and possibly increased investment. But again, if manufacturers know their products are substandard then legal action may be warranted.

As you can see, when discussing substandard drugs, there are vast areas of grey. I would argue therefore, that action to address these problems is weaker.

Counterfeiting is usually much more black and white.

Now in Europe and America most substandard drugs will be counterfeit, we simply don't have production, storage and old-drug re-sell problems--probably, but in the rest of the world that is not the case, at least where we have data enough to tell.

In India the most comprehensive study sponsored by the Indian Government, actually published, involving many thousands of assays roughly had a result of 0.4% counterfeit and about 8% substandard. In other words 19 out of every 20 substandard drugs (95%) was not a counterfeit.

Few other countries have undertaken or at least not publicized such different results (I was looking through data in the run up to this conference and found one study on Cambodia which explained the difference, about 75% were counterfeit, another on China led to the conclusion that maybe 35% was counterfeit--but that was it). So even if the Indian research drastically understates the percentage of counterfeits, non-counterfeit substandards are definitely a major problem in LDCs.

If public health is being threatened to this degree in LDCs by substandard drugs then why the major focus on counterfeits? (I'm not saying there isn't action on these other causes of substandards, there just isn't as much of a focus on it).

Well first, combating counterfeits is worthwhile from many perspectives--counterfeiters may also be smuggling narcotics, wildlife, or even people, they defraud customs and excise and legitimate manufacturers, as well as and most dangerously endanger the public health. Criminal gangs have got involved with drug counterfeiting because of the high returns and low costs of being involved.

Second, as mentioned, it is easier to position oneself against counterfeiters; except for rare cases its participants know they're breaking the law, know they're harming patients, and maybe killing hundreds, thousands of them. Third it is the main or only problem in western countries, which drive global efforts, and it is a priority of western companies, who can lose billions from counterfeiting problems.

Well, I've spent approaching half my allotted time on this definitional type issue, and will now focus just on counterfeiting, which as I say is undoubtedly a worthy target for action. But before I do, the final thing on definitions is that we need something agreed which addresses all public health hazards, and does not undermine trade in legitimate products. I have some ideas and we could go into that later if there is interest. Ok, so to counterfeits.

The international community, driven by western countries and IMPACT at WHO, has done a pretty good job of alerting people to the dangers of such drugs. It has pushed for all sorts of action and in broad strokes has been right on all of it.

Some countries have been slow to criminalise counterfeiting, some have written laws which were too broad, arguably bringing patents into laws which should have just revolved around trademarks.

Some countries have had woefully low penalties (India until recently had penalties measurable in hundreds of dollars or a few days in jail), but others have gone to the other extreme, notably China which has executed some perpetrators. While penalties should be severe they should be proportional, for many reasons. First, put yourself in the counterfeiter's shoes, if you expect to be executed for being involved in counterfeiting, yes some may stop, but legal experts will tell you that most criminals tend to heavily discount the future, and so some will not be deterred by threats of death. Indeed those that remain in the game will fight back fiercely when cornered, taking some of your police, judges, legislators with them (I've seen this problem for those combating wildlife poaching and we've all heard about it in the war in narcotics--think Colombia). Yes to strong sentencing, but sensible laws.

Again, think of yourself as a developing country Prime Minister; it is cheap to bring in a tough law, it is much more expensive (and less politically-rewarding) to enforce it. And the reality is that politics is driven by competing priorities and incentives, and laws are easier enacted than enforced.

So, more countries' governments need to support their police with budgets for these activities. Historically most of the international support funding has been made available for dealing with narcotics. CBI (like FBI) in India only gets involved in counterfeiting cases which involve opiates. And given cross border problems within India's Federal system, with some states seemingly protecting counterfeiters, the feds needs to be more involved. Remember, if our aim is improved public health it is getting these players off the street not executing them, no matter how many defenceless kids they've killed.

What is the size of the market? Nobody knows. Estimates go as much as over $50bn, but let's just say the number is fluid and runs into the multiple billions.

And this is why our next speaker's work is so important; we need systematic evaluations of how bad the problems are and who are the purveyors and we need to know what science is required to combat it, and support--I'm sure he'll discuss this.

I'm as guilty as many researchers in not contributing to systematic research, like others I've used whatever techniques can be found to assess problems, I have conspicuously focused on substandard drug quality to draw attention to the broader problem, and have not done the forensic analysis to identify the supply chains.

I will say one more thing on data, we not only need more of it, we need it openly published. But we all share the responsibility of being sensible in reporting and using that data. The main repositories of data are probably the large companies. They have (from my knowledge) always welcomed team efforts to shut down counterfeiters and have helped to do so, often far more than the countries they may be helping, but they are not very good at releasing data on counterfeit incidents. They fear, with justification, harm to their brands--publicity about counterfeiting scares patients, who may end up not taking drugs that may save their lives. I also wonder, and others may be able to comment, that concern about counterfeiting of a particular category of a drug (say antimalarials) may drive people to the brands they know best and hence may trust more, in this way generic producers may be worse harmed.

We need to ensure trademark protection because, in this area in particular, brands are good for us. I recall studying public health looking at how food used to be adulterated in the 19th century here in London--we liked to have brightly coloured foods, often with toxins in them; it was a brand, Crosse and Blackwell, that were the first to say we're not making our pickles bright green anymore, we're going to keep them brown, boring but safe, and they taste as good. Over time people went to their brand because it was safer. I'd argue today that we need to protect trademarks not just for the big boys like Pfizer and GSK but for all legitimate producers, like VS International of Mumbai.

Take a look at this. My colleagues found this in Nigeria. One of these is a fake, containing nothing more than baby powder, the brand is little known here, but is made by an Indian producer, who is losing business to the counterfeiters.

According to Vidhyut Shah, the Managing Director of VS International of Mumbai, which owns the brand company Fidson and makes the drug Ciprotab, "Ciprotab is one of our leading brands and also the No. 1 brand of Ciprofloxacin in Nigeria. We are aware that the product is being faked and consequently we have incorporated a number of anti-counterfeit measures to protect the integrity of the product and to ensure that only the Original product reaches the consumer." But still the trademark and packaging is being copied, and very well copied too.

Other systems for track and trace of legitimate products will be required and I have no time to discuss them now.

Conclusion

So to conclude, the key messages I'd like to leave you with are:

• Counterfeits are a key but unknown and perhaps small part of the total substandard problem, especially in poorer nations. Myriad responses are required for all parts of the substandard problem (from enforcement of trademark laws to education about storage and production).
• Anti-counterfeit laws must be based around labeling, including protecting trademarks, but ensuring patents are not covered in those laws. Enforcement of the correct laws must be massively increased.
• Trademark enforcement can save lives, it is easier to spot a breach of trademark than test a drug for quality.