Prerequisites and Outcomes of Medicines Counterfeit
Author: Zoia Zamikhovska, Associate, Legal Alliance Company
People keeping their eyes on pharma market news will not be surprised to find out that another medicinal product has been seized out of circulation. Literally, every day the State Administration of Medicinal Products publishes on its website the decrees on temporary ban/prohibition of selling and application of medicines due to counterfeit suspicions. For example, only in November was adopted 35 decisions relating to medicines regardless of geography of their production: Ofloksyn®200 produced by Zentiva company, Czech republic (order on the temporary ban dated 29.11.2016), Hederyn produced by DKP Pharmaceutical factory, Ukraine ( order on the ban dated 21.11.2016), Glycine produced by Arpimed Ltd, Armenia (order on the temporary ban dated 17.11.2016), Rapten 75 produced by Hemofarm AD, Serbia (order on the temporary ban dated 15.11.2016), TSYPRYNOL® produced by KRKA, Slovenia (order on the temporary ban dated 03.11.2016). At the same time, these decisions of the State Administration do not provide the details on the exact reasons for suspicion/recognition of counterfeit products.
The legislator deems the counterfeit medicines as products with intentional discrepancies in labeling or in other information (to include in composition) in comparison to the information on medicinal product of the same name, which is included into the State Register of Medicinal Products of Ukraine. Therewith, such discrepancies may relate to one or many of product characteristics. The law relates counterfeit medicines to the first and the most dangerous class of medicinal products’ discrepancies. They include the noncompliance with medicines quality control methods that may lead to the risk of loss of life or negative health outcomes.
According to WHO, there are the following main types of counterfeits: 1) product that does not have any active ingredients; 2) product that contains all ingredients, but it is unclear what conditions and technologies were used for their manufacture; and 3) product with more expensive ingredient replaced with the cheaper one.
It is worth to mention that counterfeit products may be identified by pharmacy authorities or wholesale and retail trade entities in the course of incoming control, as well as by the State Administration on Pharmaceutical Products during its inspection.
During incoming control meaning the inspection of documentation, to include quality, visual control of the product, the pharmacy or distributor (wholesale and retail trade entities) officials may suspect the adulteration of the series of certain product. These suspicions should be immediately reported to the territorial department of the State Administration on Pharmaceutical Products. Simultaneously, the product should be isolated with the indication of the reasons for seizure from circulation and transfer date.
At the same time, it should be noted that the State Administration on Pharmaceutical Products may conduct counterfeit inspections based on the application from citizens, in case they have any doubts about the quality of the product. In this case, the whole batch should be seized for in vitro tests.
Moreover, article 321-1 of the Criminal Code of Ukraine envisages the criminal liability for the manufacture, purchase, transportation, sending, storing aimed at selling or actual sale of admittedly counterfeit medicines. Therefore, during the investigation the law enforcement authorities may identify the series of counterfeit products, for instance, when inspecting the pharmacies. They should inform the State Administration on Pharmaceutical Products about this and request to provide the specialists in order to ascertain the counterfeit. As a result, the State Administration on Pharmaceutical Products conducts in vitro tests of the product series provided by the law enforcement authorities. In such a way, the State Administration on Pharmaceutical Products adopts the decree on products exemption from circulation using also the results of law enforcement authorities’ inspection.
Careful readers could notice that the open announcements generally relate to the prohibition of sale and use of counterfeit products. However, the law envisages the opportunities for constant or temporary prohibition that differ by the grounds and outcomes for market players.
Thus, one of the reasons for temporary ban of circulation are negative results of in vitro tests of series samples or medicines’ series that proved the discrepancies of first class (meaning «counterfeit») and the identification of medicines’ series that were suspected of counterfeit.
In case of the abovementioned prerequisites, the territorial departments of the State Administration on Pharmaceutical Products should immediately report this to the Administration. In its turn, the State Administration on Pharmaceutical Products of Ukraine should consider such reports and assess the availability of the described grounds within 5 business days. In case the information is confirmed, the decree should be issues concerning the temporary ban of medicine’s series.
With the same decree the State Administration on Pharmaceutical Products shall order the business entities that sell, use or store such products to place them immediately to specially allotted separated from other products places in quarantine and not to use them during the designated period until the State Administration on Pharmaceutical Products of Ukraine makes its final decision on permanent termination or renewal of circulation. The legislation determines that the period for circulation ban should not exceed 90 days. Nevertheless, the decree itself does not provide the details for the quarantine period, but uses the following wording: «until the State Administration on Pharmaceutical Products makes final decision».
Further, during 30 calendar days from issuing the decree on temporary ban the State Administration on Pharmaceutical Products should conduct in vitro tests of counterfeit medicines series, as well as investigate the origin and routs for dissemination of such medicines.
In case the results of investigation determine the fact of counterfeit, the State Administration on Pharmaceutical Products shall make a decision on permanent ban on medicines series circulation. The Administration informs its decision to the registration certificate holder or his official representative, territorial departments of the State Administration on Pharmaceutical Products, MOH of Ukraine via email and publication in media. Moreover, the regulatory authority sends urgent message regarding the quality defects (withdrawal of medicinal product) to the authorized bodies of the European Union, country-members of pharmaceutical inspection council, and other states that concluded the corresponding agreements with Ukraine.
In their turn the business entities that received the notification on the ban of medicinal product circulation and use, should withdraw it from circulation by returning the product to the supplier or by utilizing it pursuant to law procedure. This should be reported to the State Administration on Pharmaceutical Products within the tern of two weeks.
It is worth to mention that temporary ban of medicinal products does not ensure the permanent limitations. Thus, the circulation of temporary banned medicinal products may be renewed, but only under the circumstances provided by law.
Certainly, in case of counterfeit products, the bona fide holder of registration certificate will be more than happy to get rid of the forgery. As the fact of existence of such products, which are not able to reach the intended by original product therapeutic effect, undermines the business reputation and cuts the demand for such products among the consumers. Moreover, the company shall not gain any revenue from the sale of illegal products. Nevertheless, there are cases when the decisions on counterfeit have been made without any due legal basis. Consequently, taking into consideration this fact leads to the disposal (utilization) of such products, the manufacturer/registration certificate holder face negative outcomes in the form of assets utilization, pecuniary and non-pecuniary damage. Today there is the only way to protect the infringed rights – to apply to the court with an administrative claim regarding the termination of the corresponding decision made by the State Administration on Pharmaceutical Products.
For successful protection of rights in litigation it is required to assess the compliance of territorial department of the State Administration on Pharmaceutical Products and the State Administration on Pharmaceutical Products with the procedure for each stage of temporary/permanent ban adoption, which is envisaged by the Procedures for Temporary/Permanent Ban on Medicinal Products Circulation in the Territory of Ukraine approved by the MOH Order № 809 dated 22.11.2011 (hereinafter – “Procedure for Ban”). Based on the court practice, the failure to comply with such procedures serves as a basis for court ruling in favor of the plaintiff. In particular, it is about the use of the grounds for ban other than those determined in paragraphs 3.1. and 3.2. of the Procedures for Ban, the imposition by the State Administration on Pharmaceutical Products of ban based not on the notification of the Administration’s territorial department, the violation of the procedure for samples selection for in vitro analysis by the officials of the State Administration on Pharmaceutical Products, which is envisaged by the relevant procedure approved by the Cabinet of Ministers of Ukraine № 260 dated 03.02.2010, etc.
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