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SEIZURE OF INDIAN GENERIC MEDICINES BY EUROPEAN CUSTOMS IN THE NAME OF COUNTERFEIT SEIZURE OF INDIAN GENERIC MEDICINES BY EUROPEAN CUSTOMS IN THE NAME.

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Presentation on theme: "SEIZURE OF INDIAN GENERIC MEDICINES BY EUROPEAN CUSTOMS IN THE NAME OF COUNTERFEIT SEIZURE OF INDIAN GENERIC MEDICINES BY EUROPEAN CUSTOMS IN THE NAME."— Presentation transcript:

1 SEIZURE OF INDIAN GENERIC MEDICINES BY EUROPEAN CUSTOMS IN THE NAME OF COUNTERFEIT SEIZURE OF INDIAN GENERIC MEDICINES BY EUROPEAN CUSTOMS IN THE NAME OF COUNTERFEIT Dr. Alka Mehta Cipla Limited

2 INTELLECTUAL PROPERTY An intellectual property is any product or invention of human intellect that is unique, novel, and non-obvious and has some commercial value Types of Intellectual Property Patents Copyrights; and Trademarks

3 Patent - Definition A patent is a monopoly right granted to an inventor, giving the inventor the right for a limited period of time to prevent others from making, using or selling his invention without due permission from the inventor. A patent can be a) bought, b) sold, c) rented; or d) hired

4 Infringement whoever without authority makes, uses, offers to sell, sells, or imports any patented invention during the term of the patent, infringes the patent.

5 Many countries do not have manufacturing capacity to produce medicines and rely on the import of affordable generic medicines from abroad in order to treat their populations. As such, the trade in legitimate medicines between countries is fundamental to ensure access to medicines for millions of people in the developing world. Ensuring access to medicines in developing countries, as enshrined in the Doha Declaration and the WTO decision, cannot be implemented effectively if, on key transit routes, the risk exists that supplies can be regularly subject to interception based on the assertion of patent infringement in the transit country. If patent protection is absent in the country of destination, there is no basis for provisional holding actions to prevent possible foreign infringement. Introduction:

6 When drug X is patented in Netherlands, but not South America, and a Company exports X from India to South America, and the flight containing drug X makes a stopover in Netherlands on the way to South America, the drug on board the flight does not infringe the Netherlands patent. However, if the Company has reason to suspect that the (possible) Dutch patent holder will have formulated a request for notification for that particular drug; an alternative routing can prevent delay by customs/seizures. This would force exporters to look at alternative routes to send the medicines, which is likely to impact the cost competitiveness of Indian generic drugs.

7 Council Regulation (EC) No. 1383/2003, permits customs authorities to seize goods passing through customs of an EU member state when these goods are suspected of infringing patents granted and subsisting in these countries, provided that the patent holder has registered in advance with the customs authorities. The regulations permit customs to hold these goods for ten working days (or a further period provided for in the regulations) and inform the patent holder of the seizure. The patent holder then has to apply to a civil court, request a civil seizure and initiate legal proceedings in order to prove that infringement has taken place. This authority to seize goods not only applies to goods that are destined for the EU country to which these regulations apply, but also to goods that are merely passing through these ports on their way to another country outside the EU. For example goods bound from India to South America, which are passing through an EU member state, are also liable to be seized. Courts in different EU member states appear to have pronounced different views on the legality of these provisions, when the goods are not intended for an EU member country and the law is not completely settled in this regard. These provisions may have a significant impact on Indian companies, most of which use the EU route to transport pharmaceutical products to markets where the patent is not recognized or the product is off patent. By forcing Indian companies to opt for a different route to transport the goods to the intended market, the cost of transport may significantly add to the cost of producing the pharmaceutical product, thus adversely impacting the India's ability to remain competitive. This is especially relevant in the case of bulk exports from India of the API (active pharmaceutical ingredient) because it is one of the largest exporters in the world of these products. India's cost advantage may be reduced if companies are constrained to send pharmaceutical products such as the bulk drug used for formulating much needed medicines in the developing world through alternative routes. This will, obviously, also impact the availability of much needed medicines in developing countries, to which India exports these goods.

8 Three consignments of Indian-manufactured generic medicines – seized last year while in transit in the EU – have been earmarked for destruction by EU authorities. These consignments – of clopidogrel, rivastigmine and olanzapine – were being exported from India to other developing countries to treat patients with serious and life-threatening conditions such as heart attacks, strokes, Alzheimer's disease, Parkinson's disease and psychosis. Yet they were seized by Dutch customs authorities on the basis of alleged patent infringement. Although these medicines are not under patent in India or in the destination countries, EU customs legislation still permits the destruction of these life-saving medicines. A humanitarian organisation, Médecins Sans Frontières (MSF), has highlighted several other recent cases of generic medicines in transit in the EU that have been detained, seized or destroyed. Facts

9 The root of the current wave of seizures is the blurring of the definition between legitimate generic medicines and illegal counterfeit medicines. It is vital to differentiate between illegal counterfeit medicines – which the World Health Organization defines as medicines having a false representation of identity and/or source – and legitimate generic medicines, which are, in most cases, simply unbranded versions of patented medicines.

10 The current definition of counterfeit medicines by the World Health Organization (WHO) and the one proposed by the WHO-backed International Medical Products Anti-Counterfeiting Taskforce (IMPACT) is leading to such interpretation of in-transit drug consignments from India. Definition of “Counterfeit Goods” 1) Customs Legislation: Regulation (EC) 1383/2003 concerning customs action against goods suspected of infringing certain IPR rights (…); Art. 2 Nr. 1a i. goods, including packaging, bearing without authorization a trademark identical to the trademark validly registered in respect of the same type of goods… ii. any trademark symbol (including a …brochure…) on the same conditions as the goods referred to in point (i); iii. packaging materials bearing the trademarks of counterfeit goods, presented separately, on the same conditions as the goods referred to in point (i); 2) WHO Definition (2007): “A medicial product is counterfeit when there is a false representation in relation to its identity, history or source”.  does not include IPR violations!

11 According to Pharmexcil, companies whose consignments also ran into similar trouble (other than as listed below) include JB Chemicals and Pharmaceuticals Ltd, Medico Remedies Pvt. Ltd, Titan Pharma India Pvt. Ltd, and Mission Pharmaceuticals Ltd, all based in Mumbai, and Hyderabad-based Sainor Pharma Pvt. Ltd. Listed below are the consignments of Indian companies that were seized on grounds of patent infringement by the Dutch customs authorities : Ind-Swift Laboratories Ltd (Clopidogrel Bilsulphate- API): Destined for Columbia A consignment valued at some $100,000 (Rs 49 lakh) of Ind-Swift in transit for Venezuela was seized in November by customs authorities in the Netherlands under suspicions of being counterfeit. The product was the generic drug pantoprazole, used for treating ulcers, in the form of pellets that were to be filled in capsules and sold in Venezuela, where Ind-swift has marketing rights for it.

12 : Cipla Ltd, through Uni World Pharma Ltd, Dubai (Olanzapine 10 mg Tabs): Destined for Peru : Cipla Ltd, through Uni World Pharma Ltd, Dubai (Rivastigmine 3 mg Tabs): Peru : Dr Reddy’s Laboratories Ltd (Losartan - API): Destined for Brazil A DRL shipment of the generic version of losartan was seized in transit in the Netherlands. This shipment, on its way to Brazil, was held by the customs authority at Rotterdam, which said it infringed the patent of the original drug—Cozaar. Losartan is not patented in India or Brazil. The patent for Cozaar in the Netherlands is held by DuPont, while US-based pharma multinational Merck and Co. holds the marketing rights." 5. A consignment of HIV/AIDS medicines by Aurobindo Pharma Ltd meant for use in Nigeria was seized by Dutch officials. The grounds on which they were allegedly seized again is that they contained counterfeit goods. Contd..

13 Background: A consignment of 500 Kg of Losartan potassium was bound for Brazil. It was seized in transit by the Netherlands customs authorities under the authority of an EC council regulation, permitting the seizure of goods on suspicion of patent infringement in the Netherlands. Apparently, Losartan is protected in the Netherlands by a product patent of Merck/Dupont which is valid until September The only issue was one of patent infringement in the Netherlands. The value of the consignment seized is $ 55,000 and not $500,000 as mentioned in the media. Subsequently Dr. Reddy's discussed the matter with the patent holders and secured the release of the goods from the custody of the customs authorities. Merck/Dupont agreed to release the goods to Dr. Reddy's on Thursday (8th Jan) and the goods are now back in India. Dr. Reddy's Case

14 The Dutch government has asked the European Commission (EU) for a review of the EU Customs regulations. The Dutch government has taken up this damage control exercise after developing countries strongly criticised the seizure of consignments of Losartan. Subsequent to these seizures which prompted India and Brazil to issue very strong statements against this action, DRL opted to back down and have its consignment returned to India.

15 In addition to Brazil and India, those voicing concerns about access to medicines and customs were: Argentina, Bolivia, Burkina Faso, China, Costa Rica, Cuba, Ecuador, Egypt, Indonesia, Israel, Nigeria, Pakistan, Paraguay, Peru, South Africa, Thailand and Venezuela.

16 The statement made by the European Commission, on behalf of the European Union, at the WTO General Council on 3 February, stresses that the seizure was allowed by TRIPS and that it was based on provisions in EU customs law that allow customs to temporarily detain goods. However, the EC Regulation No 1383/2003 goes beyond the obligations required under the TRIPS Agreement, in which a footnote* clearly states that goods in transit can be kept outside the field of application of the general customs procedures. *Footnote: It is understood that there shall be no obligation to apply such procedures to imports of goods put on the market in another country by or with the consent of the right holder, or to goods in transit.

17 Article 41 of the TRIPS Agreement also states that any intellectual enforcement measures should “be applied in such a manner as to avoid the creation of barriers to legitimate trade.” Finally, the 2001 Doha Declaration on TRIPS and Public Health – signed by the members of the European Union - underlines that “the  TRIPS  Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all.” Article 51 Suspension of Release by Customs Authorities Members shall, in conformity with the provisions set out below, adopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods. Members may enable such an application to be made in respect of goods which involve other infringements of intellectual property rights, provided that the requirements of this Section are met. Members may also provide for corresponding procedures concerning the suspension by the customs authorities of the release of infringing goods destined for exportation from their territories.

18 As per Generics Bulletin dated March 11, 2009 Dutch customs officials contradicted the World Trade Organization’s (WTO’s) agreement on trade-related aspects of intellectual-property rights (TRIPS) and broke the European Union’s commitments under the WTO’s Doha Declaration, members of the European Parliament (MEPs) have asserted in a letter to the EU Commissioners for Trade and for Taxation and Customs Union. Highlighting recent Dutch seizures of losartan being shipped from India to Brazil and of abacavir that was in transit from India to Nigeria, the MEPs insist “seizures of generic drugs within the EU are becoming an increasingly widespread problem”. The European Regulation cited by the European Commission at the WTO General Council (Generics bulletin, 13 February 2009, page 11) “goes beyond the obligations required under the TRIPS agreement, in which a footnote clearly states that goods in transit can be kept outside the field of application of the general customs procedures”, the MEPs maintain. Latching onto a letter sent by Médicins Sans Frontières (Generics bulletin, 6 March 2009, page 13), the MEPs call on the Commission to clarify its position on EC Regulation 1383/2003 and its application to medicines.

19 At the WTO TRIPS Council of 3 March the DG Trade official justified the recent seizures of generic medicines on the basis of the need to combat the entry of fake medicines into the EU. The cases that we have outlined above involved legitimate generic medicines and not fake, counterfeit or pirated medicines. The original purpose of Regulation 1383/2003 was to combat counterfeit and pirated goods and not to detain goods that infringe IPRs. The EC Regulation 1383/2003 must be changed in order that customs officials have clear guidance on its implementation and therefore avoid disrupting legitimate trade.

20 WHO issues mild statement on transit of medicines, on March 13th, 2009 The WHO has just issued a statement on the transit of medicines. It is short and mild. The statement does not mention goods in transit in the title. It does not mention at all that medicines have been seized. The best part of the statement is the following quote: “ Ensuring that the interests of trade and health are appropriately managed, also means that the flow of legitimate medicines, including generic medicines, is not impeded” The action part of the statement is weak, however: “ In relation to this issue, WHO is continuing to follow developments and consulting with Member States and relevant international intergovernmental organizations. WHO also understands that there is ongoing dialogue among the parties concerned to resolve the matter. Given the public health impact of this issue, WHO remains ready to provide, upon request, technical and policy support to Member States.“

21 Views of NGOs The following are the views of few NGOs on role of the WHO in addressing public health concerns over goods in transit. Buko Pharma-Kampagne, Christian Wagner-Ahlfs "Cheap generics are essential for developing countries. Each attempt to label legally produced generics as counterfeit or product piracy, affects public health. We ask WHO to use its mandate for public health by encouraging European governments not to block generic imports to developing countries.“ HAI Global, Tim Reed, ( , "As an NGO who has worked collaboratively with the World health Organisation (WHO) for many years on delivering increased access to essential medicines and the rational use of medicines in low and middle income countries, Health Action International is dismayed that WHO has remained quiet for so long about the recent spate of generic medicine seizures in Europe. This is an opportunity for WHO to show strong leadership and promote its own principle of universal access to essential medicines, with a clear message that the actions in European ports are unacceptable. Instead, we have a deafening silence."

22 Contd… HAI Europe, Teresa Alves, ( , "The public health dimension of the European seizures of generics cannot be ignored. Yet, the clock is ticking while the international health community awaits WHO's reaction. WHO must act decisively to drive global health advocacy and represent the interests of those who do not have access to the medicines they need.“ Knowledge Ecology, James Love, (office , mobile , "The WHO should protect the poor, and champion access to medicine. There is a campaign by a handful of giant pharmaceutical companies and trade associations to undermine legitimate trade in generic medicines. As noted by the Director General of the World Trade Organization (WTO), the seizures of medicines in transit to developing country markets is a serious issue. There are many resolutions and declarations that speak to the need to promote access to medicines, and the WHO clearly has a mandate in this area. The WHO needs to find its voice, and act."

23 Contd… TransAtlantic Consumer Dialogue, Anne-Catherine Lorrain ( , "The silence of the World Health Organisation (WHO) sends the wrong signal on the crucial issue of the supply of legitimate generic medicines to developing countries. Consumers are looking to the WHO to provide leadership and expertise in resolving this issue, which is critical for our life and health.“ Third World Network, Sangeeta Shashikant (office: ,mobile: , "The lack of a prompt response by WHO on an issue that affects access to medicines in developing countries is extremely disappointing.It suggest a lack of commitment and leadership in WHO. As an organisation tasked with the attainment by all peoples of the highest possible level of health, WHO must without any further delay push the EU to amend its Directive. WHO should also assess and speak out against the anti- counterfeiting initiatives such as IMPACT, WCO's SECURE, ACTA that could have serious consequences for the availability of generics and access to medicines."

24 Vote of thanks My sincere thanks to Pharmaexil for Pharmaexil's efforts and to Government of India to support the Indian companies, especially Cipla in fighting this unjust seizure in the name of Intellectual property violation when Netherlands was used merely as a transit for goods intended for Peru. My sincere thanks to my colleagues Ms. Patsy Jeffery and Ms. Bhakti Vajratkar in preparing this presentation My sincere thanks to Spicy IP colleagues for allowing me to reproduce the data.

25 THANK YOU FOR YOUR TIME AND PATIENCE


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