Questions raised over Indian anti-counterfeit act

Indian flag on wallLast month, India implemented new legislation designed to give enforcement agencies greater powers to punish those involved in the manufacture and distribution of 'spurious' drugs and cosmetics.

Several years in gestation, the Drugs and Cosmetics (Amendment) Act of 2008 finally came into being on August 10, doubling the minimum jail sentence for those who participate in the trade from five to 10 years, with a maximum term of life imprisonment. In serious cases those accused of the offence will not be eligible for bail.

The Act also boosts the fines that can be levied to those found guilty of trafficking in spurious drugs from a minimum of 10,000 rupees (around $200) to "not less than 10 lakh rupees [$21,000] or three times the value of the drugs confiscated, whichever is more."

The tougher sentencing is to be welcomed, but commentators have cautioned that legislation alone will do little without a firm commitment by government and enforcement agencies to tackle the problem.

Julian Harris of the non-profit International Policy Network, who recently published a paper on counterfeiting in emerging markets (see Counterfeit drugs take hefty toll in developing world), told that "corruption often makes government interventions futile, or even counter-productive."

"While playing down the problem the Indian government announces all kinds of headline-grabbing criminal measures against counterfeiters," said Harris. 

"But the Confederation of Indian Industry admits that companies themselves are often powerless to protect their trademarks - this is the root of the problem, and far more important than the government's tough posturing," he added. 

The act sets out three classifications of offence under the act - spurious and adulterated drugs, grossly substandard drugs and drugs with minor defects, and some have have voiced concerns that definitions of terms such as 'spurious' and 'adulterated', which the amendment does not change, are too vague.
The Indian Drug Manufacturers Association has cited cases where products failing analytical testing for active pharmaceutical ingredient (API) content have been labelled as spurious, placing the manufacturer at risk of severe penalties, where the problem is in fact one of quality control. Similarly, there have been cases where other quality control issues such as microbial contamination or the presence of particulate matter have resulted in a product being classified as adulterated.

Meanwhile, there are also suggestions that the loose definition could encourage frivolous legal challenges aimed not at tackling counterfeits but blocking the launch of competitor products.

The Spicy IP blog, which covers Indian intellectual property issues, points to a case brought earlier this year by Bayer in which it sought to block a generic version of its Nexavar (sorafenib) cancer drug, developed in India by Cipla as Soranib, on the grounds that it was a 'spurious' drug according to the terms of the Drugs and Cosmetics Act. The Delhi High Court dismissed the complaint, saying that Bayer's argument would render all generic drugs spurious under the Act.

While implementation of the amendment is a positive step forward by the Indian government in tackling medicines counterfeiting, it would be unfortunate if a lack of enforcement, as well as the associated problems with definitions, were to undermine its effectiveness.

Related articles:

Indian survey 'finds few counterfeits'

India boosts sentences for fake drug offenders

Counterfeit drugs take hefty toll in developing world

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