The insidious problem of counterfeiting in healthcare

For hold­ers of intel­lec­tu­al prop­er­ty (IP), coun­ter­feit­ing presents an insid­i­ous prob­lem. The man­u­fac­ture and sale of fal­si­fied prod­ucts erodes rev­enue and prof­its, dam­ages brand con­fi­dence and rep­u­ta­tion, and bur­dens con­sumers with sub­stan­dard goods. 

In the case of health­care prod­ucts, the results can be even more dan­ger­ous. Coun­ter­feit­ed health­care can pose seri­ous health risks that, in the most seri­ous of cas­es, could prove to be life threat­en­ing.  

For the pro­duc­ers of health­care prod­ucts, IP is an espe­cial­ly crit­i­cal means of pro­tect­ing sci­en­tif­ic inno­va­tion and sup­port­ing busi­ness strate­gies. Yet accord­ing to the World Health Orga­ni­za­tion (WHO), two bil­lion peo­ple world­wide lack access to nec­es­sary health­care prod­ucts, pre­sent­ing sig­nif­i­cant oppor­tu­ni­ties for coun­ter­feit­ers. Growth of ecom­merce has only exac­er­bat­ed the prob­lem. 

Trade in coun­ter­feit med­i­cines, which have had their iden­ti­ty, source or com­po­si­tion mis­rep­re­sent­ed, reached $4.4 bil­lion in 2016, the Organ­i­sa­tion for Eco­nom­ic Co-oper­a­tion and Devel­op­ment-Euro­pean Union Intel­lec­tu­al Prop­er­ty Office Trade in Coun­ter­feit Phar­ma­ceu­ti­cal Prod­ucts report revealed in March 2020. Crim­i­nal­i­ty in the field cov­ers a wide vari­ety of activ­i­ties includ­ing theft, tam­per­ing and ille­gal diver­sion, with coun­ter­feit­ing pro­duc­ing the high­est vol­umes of inci­dents.  

The scope of trade in coun­ter­feit med­ical devices, which cov­ers a wide field from tweez­ers to advanced sur­gi­cal instru­ments, is less well under­stood. 

“Unlike infor­ma­tion on coun­ter­feit med­i­cines, med­ical device coun­ter­feit­ing is still often regard­ed as clas­si­fied in the health­care world and as a result we don’t have con­sis­tent data on it,” says Phil Lewis, direc­tor gen­er­al of the UK-based Anti-Coun­ter­feit­ing Group. 

“The fig­ures pro­duced by WHO ten years ago revealed 8 per cent of med­ical devices at the time were known to be fake. The num­bers are now like­ly to be much high­er.”    

Crim­i­nal activ­i­ty in health­care has also inten­si­fied with the coro­n­avirus pan­dem­ic. Under Interpol’s Oper­a­tion Pangea XIII, con­duct­ed last March, police, cus­toms and health author­i­ties in 90 coun­tries seized coun­ter­feit face masks, self-test­ing kits, anti-viral med­ica­tion and oth­er prod­ucts worth more than $14 mil­lion, lead­ing to 121 arrests and the clo­sure of 2,500 weblinks and web­sites. 

Nation­al and region­al reg­u­la­tion, and the work of health­care pro­duc­ers and law enforce­ment agen­cies includ­ing the police and cus­toms offi­cials, all pro­vide the front-line defence against health­care coun­ter­feit­ing. Health­care pro­duc­ers use a pletho­ra of mea­sures to com­bat the prob­lem, notably bar­codes, holo­grams and anti-tam­per­ing devices as well as a range of field­work.  

In addi­tion to manda­to­ry fea­tures required by reg­u­la­tors for pack­ag­ing, includ­ing seri­al­i­sa­tion, phar­ma­ceu­ti­cals giant Novar­tis uses overt and covert secu­ri­ty fea­tures so coun­try ver­i­fiers can iden­ti­fy fal­si­fied prod­ucts. Mobile lab­o­ra­to­ries are used by its foren­sic teams to analyse sus­pect­ed sam­ples in the field. A new cloud-based, mobile-enabled solu­tion, which will accel­er­ate the test­ing, detect­ing and report­ing of false med­i­cines to nation­al author­i­ties and WHO, is now being pilot­ed.  

Tech­nol­o­gy is a crit­i­cal enabler in the fight against phar­ma­ceu­ti­cal crime, says Stanis­las Bar­ro, Novar­tis glob­al head of anti-coun­ter­feit­ing. “Detect­ing fal­si­fied med­i­cines requires state-of-the-art tech­nol­o­gy to test pack­ag­ing and prod­ucts in the field. We use online mon­i­tor­ing, like webcrawlers with cus­tomised para­me­ters, to mon­i­tor the inter­net 24/7 to detect illic­it sales of sus­pect­ed fal­si­fied med­i­cines using our brands,” he says.

The com­pa­ny has also built a data ana­lyt­ics and visu­al­i­sa­tion dash­board to sup­port its risk-analy­sis effort, he adds.  

Although coun­ter­feit­ers are pros­e­cut­ed by law enforce­ment agen­cies, the actions of IP hold­ers remain vital.  

“We file trade­marks to clear­ly iden­ti­fy our prod­ucts and record our IP rights with cus­toms author­i­ties glob­al­ly to empow­er them to iden­ti­fy sus­pect­ed fal­si­fied goods,” says Myrtha Hur­ta­do Rivas, Novar­tis glob­al head of legal brand pro­tec­tion. 

“But com­pa­nies like ours can­not ful­ly shift respon­si­bil­i­ty to reduce patient risk to nation­al law enforcers. Tak­ing action based on IP rights is nec­es­sary, for instance to ensure rogue online phar­ma­cies are tak­en down swift­ly. In the major­i­ty of legal actions, hav­ing an IP right increas­es the chances of suc­cess against coun­ter­feit­ers.”

Legit­i­mate phar­ma­ceu­ti­cal com­pa­nies also have a duty to report con­firmed inci­dents of fal­si­fied ver­sions of their prod­ucts to local health author­i­ties, Novar­tis points out, and it has vol­un­tar­i­ly com­mit­ted to report­ing these to WHO with­in sev­en days of dis­cov­ery fol­low­ing WHO’s rec­om­men­da­tions.    

Ewan Grist, part­ner in the IP prac­tice of inter­na­tion­al law firm Bird & Bird, con­curs that IP remains the bedrock on which actions against coun­ter­feit­ers are based. 

“The two IP rights most like­ly to be infringed in health­care cas­es are patents and trade­marks,” he says. “On the basis of IP infringe­ments, IP own­ers can file take-down noti­fi­ca­tions with ecom­merce plat­forms and they can take direct civ­il action against coun­ter­feit­ers where it is pos­si­ble and prac­ti­cal. Often the IP infringe­ment enables the inter­ven­tion of law enforce­ment agen­cies and sup­ports pros­e­cu­tions.”

While organ­i­sa­tions such as hos­pi­tals are dili­gent in ensur­ing the authen­tic­i­ty of their med­ical sup­plies, small­er organ­i­sa­tions and pri­vate con­sumers can be more sus­cep­ti­ble to coun­ter­feit­ing.  

“Devel­op­ing coun­tries are par­tic­u­lar­ly vul­ner­a­ble as coun­ter­feit­ers tar­get areas where cor­rup­tion is more rife and law enforce­ment weak­er,” says Lewis at the Anti-Coun­ter­feit­ing Group 

Some 90 per cent of fake prod­ucts orig­i­nate in Chi­na, accord­ing to Bob Barchiesi, pres­i­dent of the Inter­na­tion­al Anti­Coun­ter­feit­ing Coali­tion. 

“In the last decade, the Chi­nese gov­ern­ment has made marked improve­ments in address­ing the issue, but more could be done. One par­tic­u­lar prob­lem is the propen­si­ty of Chi­nese author­i­ties to seize coun­ter­feit goods, but not pros­e­cute pro­duc­ers. A sig­nif­i­cant issue remains the num­ber of peo­ple employed in pro­duc­tion of coun­ter­feit goods,” he explains.  

But coun­ter­feit­ers are nim­ble too and the fight against them requires the con­tin­ued and con­cert­ed efforts of all stake­hold­ers. “Col­lec­tive action is the cor­ner­stone of our strat­e­gy to com­bat fal­si­fied med­i­cines,” says Bar­ro.