15 October 2013

Russian Health Ministry Proposes Law to Criminalize Counterfeit Medicine

On September 30, the Russian Ministry of Health submitted a draft bill to the State Duma that would criminalize the production and sale of counterfeit medicine and medical products.
Russian Health Ministry Proposes Law to Criminalize Counterfeit Medicine
The proposed legislation is designed to harmonize all Russian law regarding counterfeit medical products and to implement the Medicrime agreement, otherwise known as the “Convention on the Counterfeiting of Medical Products and Similar Crimes Involving Threats to Public Health.” Industry observers hope that the specificity of the proposed legislation will give law enforcement agencies greater support in prosecuting counterfeit producers, and that the bill’s criminal penalties will deter future offenders. 


Background 


Adopted by Russia in October 2011, the Council of Europe’s Medicrime agreement works to clarify and criminalize the manufacture and supply of -- as well as falsification related to -- counterfeit medical products on an international scale. The agreement specifically targets the producers and manufacturers of the counterfeit drugs by holding them criminally liable for their actions.


The draft bill introduced by the Russian Health Ministry is entitled “On Amendments to Certain Legislative Acts of the Russian Federation to Ratify the Council of Europe’s Medicrime Convention.” The proposed law penalizes the production, manufacture, importation, storage, transport, sale, and transfer of counterfeit drugs and medical devices with a potential 3-5 year prison term. If these actions result in loss of life, the producer/seller could face 5-8 years in prison. The bill also provides criminal penalties for forgery and falsifying information regarding the packaging of medicines.


The proposed bill is unique in its specific focus on medical counterfeits. Due to the lack of specialized pharmaceutical counterfeit legislation, the Russian government has primarily used criminal codes regarding safety violations, fraud and trademarks in order to prosecute medical counterfeiters. This draft bill differs from existing law in that it explicitly criminalizes the production and sale of medical counterfeits. This more specific legal framework could provide for more effective prosecution of individuals and companies.
 
Russian Counterfeit Medicine Market
 
In January 2013, a report entitled “Pharmpiracy in Russia, 2004-2012”, was produced by the State and Law Institute of the Russian Academy of Sciences, the Association of Employees of Law Enforcement Agencies and Special Services (ARPO), ARPO's Public Council for Healthcare and Social Welfare, the Scientific Center for Quality Control, and the Union of Professional Pharmaceutical Organizations. The report highlighted two central obstacles to combatting counterfeit medical products in Russia:
  1. Poor information -- the Russian government lacks reliable and objective information about the extent of the medical counterfeit problem
  2. A disjointed campaign to utilize government resources and the lack of a central regulatory body. 
The report also sheds light on the Russian counterfeit medical market. For instance, given the 10% estimated counterfeit share of the Russian market provided by the Ministry of Economic Development, “Pharmpiracy” calculated the total value of counterfeits at $2.5 billion in 2012 (the Russian pharmaceutical market as a whole was valued at roughly $28 billion). Estimates from other government agencies and NGOs have also shown the total ratio of counterfeit drugs in the Russian market to be within a range of 0.02-12%. Additionally, the report notes that over the past decade in Russia, pharmaceutical piracy charges have only been brought against roughly 1,000-1,500 individuals and companies. In that same period, the Russian government only confiscated counterfeit medical products valued at 4-5 million rubles ($125,000-$156,000) per year.


This deficiency in prosecution demonstrates that the problems of inadequate information, an unclear regulatory authority and the absence of well-defined legislation combine to make it difficult for government officials to enforce medical counterfeit law.  
 
Perspective and Expectations
 
Views of the potential impact this new law may have are mixed. Given the strong similarities in labeling and packaging between counterfeit and legal products, skeptics such as Helena Nevolina, director of the Pharmacy Guild, worry that pharmacies will not have the ability to check every medical product and document for counterfeits. Also, the president of the League of Advocates for Patients, Alexander Saversky, argues that the Russian Criminal Code already contains provisions that criminalize medical counterfeits (fraud and falsification) and that the adoption of additional provisions alone will not solve the problem.