Explanatory Memorandum
On the Draft Federal Law "On Amendments and Modifications to the Federal Law "On Medicines," the RF Criminal Code and the RF Code On Administrative Law Violations

The battle against counterfeit medicines requires the immediate adoption of modifications and amendments to federal legislation. Counterfeit medicines pose a real threat to the economic and social security of the country and inflict damage on the health of the population. The use of counterfeit medications without active pharmacological elements leads to the sabotage of patients' treatments, to chronic illness and other negative consequences-- even to fatalities.

In the last few years we have experienced a steady growth in counterfeit medicine cases. In 1998, nine cases were uncovered; in 1999, the number grew to 29; in 2000, there were 105 cases; and in the first 10 months of 2001, the number was 74.

According to the Interagency Commission for Health Protection of the Security Council of the Russian Federation, counterfeit medicines make up approximately 7% of the total sales volume of pharmaceuticals, for a sum of $20-30 million dollars.

The problem is exacerbated both by the absence of the very definition of "counterfeit medicine" in the Law "On Medicines," as well as by the lack of clarity in legal norms, the absence of serious criminal sanctions, and the lack of appropriate state control in this sphere. Because of the importance of this matter, on October 24, 2001, the Interagency Commission for Health Protection of the Security Council of the Russian Federation considered the issue "On Measures to Prevent Production and Distribution of Counterfeit Medicines." Given the social importance of the fight against the spread of counterfeit medicines, the Interagency Committee recommended that the Government of the Russian Federation instruct the Ministry of Health of Russia and other interested ministries and agencies to propose appropriate amendments and modifications to federal legislation with the goal of creating a legal basis for the fight against counterfeit medicines. If urgent measures are not taken to prevent production and distribution of counterfeit medicines, the health of the population will be adversely affected, which in turn constitutes a threat to national security.

At the present time, counterfeit medicines are discovered by divisions of the control-permitting system of the Ministry of Health in the course of certifying and checking the quality of medicines, as well as by domestic producers and foreign firms which discover counterfeits directly in the pharmacies. Due to the absence of a definition of "counterfeit medicines" in the legislation, the state cannot regulate the circulation of counterfeit medicines or undertake measures to fight them.

In regard to the above-mentioned draft law "On the Introduction of Modifications to the Federal Law 'On Medicines,'" it is proposed that a definition of counterfeit medicine be included, and that amendments prohibiting any activity connected with the production and distribution of counterfeit medicines be introduced into the relevant sections of federal legislation.
The proposed provisions comply with existing international experience in this area. The definition of "counterfeit medicines" was introduced by the World Health Organization in 1992 and is included in the legislation of the majority of developed countries around the world.

In the regions of the Russian Federation, the health protection management agencies and organizations for certification of medicines conduct inspections of pharmacies and health institutions, under instruction from the Ministry of Health of Russia, to remove counterfeit medicines from circulation and send materials on any cases they discover to law enforcement agencies for investigation. However, because of the absence of laws dealing with the production, storage, packaging, labeling, transportation and distribution of counterfeit medicines, the law enforcement agencies are forced to close criminal cases for lack of a criminal code covering the various aspects of counterfeit medicines. For this reason, the effectiveness of measures designed to fight counterfeit medicines is nil.

Inasmuch as the use of counterfeit medicines endangers human life and health, the draft law "On the Introduction of Modifications and Amendments to the Criminal Code of the Russian Federation" stipulates that this type of criminal activity be attached to Paragraph 25, "Crimes against the Health of the Population and Public Morality." Therefore, it has been proposed that Article 238 be supplemented by Article 238.1, which establishes that it is a criminal act to produce, store, pack, label, transport, sell or carry out any operation related to the counterfeiting of medicines.

Similar legal problems have been decided in the same way. For example, on April 23, 2001 the State Duma adopted Decree No. 1442--the draft of Federal Law 90000 279-2 "On Amendments and Modifications to the Criminal Code of the Russian Federation," which introduced criminal penalties for the illegal use of trademarks.

To increase the effectiveness of the fight against counterfeit medicines, along with the introduction of Article 238.1 of the Criminal Code of the Russian Federation a provision regarding administrative responsibility for less serious unlawful acts in the sphere of counterfeit medicines needs to be introduced.

For this reason it is proposed to supplement Article 14.26 of the Code of the Russian Federation on Administrative Violations by establishing administrative responsibility for the production, preparation, storage, packaging, labeling, transportation, purchase for the purpose of distribution, or sale of counterfeit medicines, the value of which does not exceed 200 minimum salaries.

It should be noted that the implementation of the draft laws does not require additional funds from the federal budget and will not reduce budget receipts.

About |  Members |  Calendar | Activities |  Coalition |  News |  Reference |  Contact |  Map