The Dutch Drug Mess: Why Trademarks Matter

Roger Bate | 18 May 2009
The New Ledger
In March, Dutch customs authorities seized cargoes of anti-HIV drugs at Schipol airport. The drugs had been manufactured by India's Aurobindo Pharma, had been purchased by UNITAID, and were en route to Nigeria. Two months earlier, the same authorities had seized a consignment of drugs to fight high blood pressure manufactured by another Indian firm, Dr Reddy's Lab, on its way to Brazil.

The seizures sent health activists and the Indian government into a tail-spin. "This is an act of piracy by the European Union," Indian commerce secretary G.K. Pillai told LiveMint, "It is part of the strategy by these countries to target generic drugs from India." The firestorm hastened the tabling of an important text to strengthen the definition of counterfeit drugs, and has called WHO's entire anti-counterfeiting agenda into question.

From my reading, the Indian drugs would have breached patents if offered for sale in the Netherlands, but not in the destination countries; in the latest case, the brand-holder (GSK) had not objected to the purchase, and several European Union governments, including France and the UK, had contributed to the shipment's costs. By seizing legitimately marked generics, the Dutch authorities appear to have over-reached themselves, possibly supported by multinational companies.

But had the products breached trademark laws and included false packaging, it may have been a different story. False packaging—whether of purported brand-name or generic drugs—indicates both an intention to defraud and little assurance of quality. Because most developing countries are incapable of policing the drugs entering their countries, interventions which detect trademark infringements and allow them to be punished in Europe confer a significant public health benefit to patients in destination countries.

The Kenyan media recently exposed collusion between local business elites in the capital of Nairobi and Indian pharmaceutical traders. The group packaged poorly-produced products as trusted brand-name and generic drugs, which earned them huge profits but likely at the expense of the lives of hundreds of children. A report by government officials and University of Nairobi and World Health Organization consultants leaked to The Daily Nation newspaper "confirms what has always been known to be the biggest obstacle to a successful anti-malaria campaign—well-entrenched cartels of drug manufacturers and distributors working in cahoots with corrupt Health ministry officials to supply their own drugs," the newspaper reported.

The Nation shared a copy of the report with me, which has never been made public. It revealed a huge range in quality in the products on sale across the eight provinces of Kenya at the end of 2007. For a relatively poor country, there were a remarkable 113 manufacturers of antimalarial products. Sixty-four percent of the products came from China, Kenya and India, yet only one Chinese, one Indian, and no Kenyan antimalarial products were approved by the WHO. Over 65 products on sale were not approved. Only 42.6 percent of all 187 products had been registered with the relevant Pharmacy Board at the Ministry of Health, which, while it does not necessarily denote good quality, is technically a requirement of the law.

The WHO/Ministry of Health study found that less than one third of the antimalarial formulations in Kenya were recommended by the Ministry of Health; on average, 16 percent of them failed a battery of basic quality control tests. There was a higher failure rate for the most popular drugs. A project I led in 2007, looking at the most popular antimalarial products in Nairobi, found a 38 percent failure rate.

Poor quality drugs kill hundreds indirectly by not curing malaria. Some drugs may also kill directly because of the heavy metals and bacterial contamination many fakes contain. Some of the drug failures contain too little of the active ingredient, which accelerates drug resistance, undermining the viability of future treatments. Chloroquine, a cheap and effective anti-malarial, is now useless for many Africans, partly because of the widespread use of substandard strength pills. The WHO/Ministry of Health study found 34 amodiaquine-only products (18 were not registered), even though the World Health Organization recommends that this drug only be taken in combination with another drug (artesunate) to reduce the chance of resistance. AQ-only drugs will likely accelerate AQ resistance, which is already a problem in Kenya.

While aid agencies generally buy good quality drugs, some, including the Global Fund, occasionally buy from unvetted, low-cost Indian suppliers. In 2007, the Fund contracted to buy over 7 million anti-malarial treatments for Kenya from Ajanta, an Indian company; the drugs were not properly tested and the company failed to deliver the requisite amount on time. In the end, the U.S. government's President's Malaria Initiative intervened, using its stock of good quality alternatives to save life.

Activists are right to ensure that cheap generic drugs—those biologically equivalent to brand originals—pass through customs trade posts in Europe and elsewhere unhindered. But assessing product trademarks—of both brand and generic drugs—is essential. The majority of the antimalarial products on sale in Kenya are neither brands nor generics but copy products of unknown provenance and variable quality. While inspecting trademarks will only prevent some of the bad products entering African nations like Kenya, any vigilance is surely to be welcomed.

http://newledger.com/2009/05/the-dutch-drug-mess-why-trademarks-matter/