Just a few weeks ago, in late May, yet another international law enforcement operation uncovered another series of drug counterfeiting
outfits, seizing more millions of dollars worth of fake prescription medicines, resulting in the arrest of hundreds more
makers and distributors of illegal drug products. Nearly 200 enforcement agencies across 111 countries, led by Interpol, took
part in Operation Pangea VII, targeting the criminal networks behind the sale of fake medicines.
While action is heating up at the international level to tackle counterfeit drugs, Europe is making its own efforts to stop
fake medicines from entering the legal supply chain. An improbable cross-sector partnership is struggling to secure support
for a pan-European system to keep counterfeits out. It's improbable because it brings together not only manufacturers, wholesalers,
and pharmacists, but also parallel traders—long treated by drug manufacturers as pariahs and even downright enemies. And I
use the word struggling because the system this partnership is advocating will be expensive, complex, and require unprecedented
collaboration right across the European Union.
It's a struggle also because time is running out. This is not a spontaneous gesture by the private sector. It is a response
to European Union rules adopted three years ago, that are due to come into full effect less than three years from now. There
are no options: heavy new obligations will fall on each of these components of the medicines supply chain, and the private
sector players are simply trying to set up the most cost-effective way to meet those obligations through a largely self-regulatory
system. If they fail, they face legal action for non-compliance, and still tougher—and doubtless more expensive and onerous—obligations
under additional legislation and systems that will be imposed on them by the authorities.
In June, the partnership issued a progress report, with an impressive plan of action and an even more impressive appeal for
urgent action by the thousands of drugmakers, wholesalers, pharmacists, and traders across the continent. "Start now," urged
Lothar Jenne, the managing director of German wholesaler Max-Jenne Artzneimitte, who is one of the key architects of the new
system. "Timely implementation requires concrete planning now" was the message from the partnership.
The report listed the many tasks that must be accomplished for the system to work. Specifically, manufacturers will have to
modify production lines to affix a 2D data matrix code on each pack that will bear the product code, batch or lot number,
expiry date, and a unique randomized serial number. They will also have to apply tamper-evidence features to each pack. And
they will have to report the data securely to a national data repository that they will also have to create, along with a
Europe-level "hub" that can allow national systems to talk to each other. Pharmacists will have to install equipment and data-transfer
links so they can read the 2D code and receive instant verification (or an alarm) via the "hub" on each product before they
dispense it. Wholesalers will also have to be plugged into the system so they can keep a check on products going through their
hands. And parallel traders will have to work with the system too, affixing new 2D codes and new tamper-evidence features
to every medicine they re-label or repackage, and reporting the new data to the system. Everyone will have to be able to receive
and respond to queries regarding codes, and make provision for handling exceptions, reverse logistics with recalls, and further
queries and investigations.
There are costs as well as long lead-times attached to all these elements. Current estimates range from $100 million a year
to double that sum, just for running the system. Unsurprisingly, the question of costs has been at the heart of the discussions—and
remains so today. Above all, the cost question has caused a split among manufacturers, with the European Federation of Pharmaceutical
Industries and Associations (EFPIA) firmly inside the partnership, and the generics industry still hesitant on the outside.
The European Generic medicines Association (EGA) feels its members are being unfairly treated, since the products they produce
are—it claims—so rarely counterfeited that the complex new EU requirements are disproportionate and excessive. There is little
reason for them to share the cost burden when the real targets of counterfeiters are the more expensive branded products made
by research-based companies, they say.
The generics industry has not given up hope of winning some exemptions under the EU legislation. But it is also hedging its
bets, and is exploring joining the partnership if it can do a cut-price deal. What it is insisting on is that the costs—most
of which are to be shared among manufacturers—should not be based on volume sales, because that would disadvantage its members,
who specialize in large runs of low-cost products. A compromise could be reached soon. EGA has proposed a flat rate approach,
under which each company would pay a fixed amount for each of the marketing authorizations it holds. Since big companies with
many products in many markets hold more individual marketing authorizations than smaller companies with restricted product
ranges, the idea is that this formula would tip the balance the other way.
But it is not yet a done deal. EFPIA has somewhat reluctantly conceded that this methodology might be acceptable. But EGA
has yet to win the backing of its board for the approach. And even if it does, there are countless other questions to be resolved
to get this system up and running in time for the 2017 deadline that the EU has set—and on which the Commission is refusing
to make any concessions.
By a profound irony, the one thing that all these efforts will have no impact at all on is the one thing that Operation Pangea
VII was exclusively devoted to: illegal online drug sales. The EU legislation covers only the legal supply chain—leaving gullible
patients the world over still just as vulnerable as ever to the purveyors of counterfeit treatments for everything from erectile
dysfunction to cancer.
Reflector is Pharmaceutical Executive's correspondent in Brussels.