The PBN Company
Unofficial Translation

Izvestiya

April 27, 2002
Page 1

Medicine for Fear
Who stands to gain from a scandal with counterfeit medicines on the Russian market?

By Tatiana Bateneva

Quote of the day: "Those who doctors themselves with the help of a medical handbook run a risk to die from a misprint." Christian Friedrich Hebbel, a German play writer.

The Association of International Pharmaceutical Manufacturers (AIPM) presented a survey of forty-eight foreign and five Russian pharmaceutical companies on the issue of counterfeit medicines in the Russian Federation. According to polled experts, the share of counterfeit drugs is growing at an unprecedented rate and amounts presently to about 12 percent of the entire market.

Late last year, officials from the Ministry of Health said it was 7 percent, the figures provided by officials from the Ministry of Internal Affairs ranged from 3 to 7 percent. According to press reports, after a doping scandal with our famous gymnasts the medical agency provided official information that up to 40 percent of medicines in the pharmacies were counterfeit. What information is right?

If you ask any of us, common people, what a counterfeit drug is, we will give a quick answer: it is a fake, which can damage human health or even kill a man. If you ask a specialist, the answer will be different: these are products which are accompanied by false information about the ingredients and/or manufacturer. This means that counterfeits are medicines that contain normal ingredients, but were produced with infringements of the patent law or without a license, or even its packing does not have all the requisites. Do you see the difference?

The products of the second type (it accounts for the majority of counterfeits) are not often hazardous for health, but they incur damage to the interests of the state and producers. Presenting the result of the survey at a press conference at the Interfax news agency, President of the Coalition for Intellectual Property Rights, Peter Necarsulmer, unveiled the amount of annual damage, which is $250 million. Of course, fakes are dangerous in any form. To eliminate counterfeits, the Ministry of Health created a medicines quality control system, which includes regional control and analytical laboratories. Their function is to inspect all medicines imported in the region, issue compliance certificates, etc. If the amount of counterfeits, as experts say, is growing rapidly, the official statistics (see the chart below) does not reflect this, it is clear that the system does not work properly.

Officials cite the lack of powers, inadequate legislation, which does not allow to punish producers and distributors of counterfeits. The Ministry of Health, however, has such an instrument, which is the licensing system and the function of supervision over the pharmaceutical market set forth by the legislation. Pharmaceutical Inspection has been created to implement this function. However, a year ago, Deputy Minister Anton Katlinsky failed to provide at least one example when infringers were deprived of licenses. This year Deputy Head of the Department for Medicine Quality Control, Alexander Toporkov, said that there were three such cases, while there were 227 illegal producers discovered. ZAO Ferein products are again shown as an example of counterfeits - Bralangin, Tariferid and Ferestal (by the way, they are officially registered by the Ministry of Health), which look much like Baralgin, Tarivid and Festal produced by a famous foreign company. It becomes nearly a rule: information about counterfeits is more terrifying, but actual fakes, which have damaged human health, are not shown to the public.

The vague situation was slightly clarified by Mr. Necarsulmer at the press conference. He said that the major reason was the absence of political will to resolve the problem. Even the existing law provisions can be applied effectively. In other words, a will resolves all problems. For the time being, there are horrors alone and there is no information on how and what officials do to resolve this problem. Perhaps, this is a way to distract public attention from more actual issues - drug prices, delivery of drugs to people enjoying privileges and pharmaceutical market property re-division.

How can an ordinary drug buyer secure himself, if state institutions obliged to do this fail? He should be watchful and not to buy drugs from individuals and in shady kiosks. He is better to go to solid stationary pharmacies. He should pay attention to drug packages: bad printing, no information on the producer, no expiration dates and no prescription should cause suspicion. However, the test of suspicion is not free: according to the Law "On Consumer Rights", the seller will pay for an analysis to be made by the control laboratory, and if the drug is of good quality the consumer will pay.

It is possible to resolve the problem of counterfeiting. Take developed countries, where the market share of counterfeits is no more than 2%. However, to do this, one should work rather than simply scare the people.

Expert Opinions

Svetlana Zavidova, a legal adviser for the International Confederation of Consumer Associations, says, "I think now the people are scared with counterfeits. The supplementary supervising system being established by the Ministry of Health will also permit (who can become a market participant) and not control. Producers and distributors will have to pay at each stage of such a system. As a result, the consumer will pay more. It is necessary to simply control the market subject as it is done in trade."

Andrey Mladentsev, OAO Nizhpharm (one of Russia's largest pharmaceutical companies) General Director, says, "I am ready to negotiate. For example, it makes sense to establish the system of state registration of pharmaceutical equipment: finished products can always identify the equipment used to produce them. Neither AIPM nor other pharmaceutical market participants should press the situation. This may have a bad effect on the consumer, first of all."

Counterfeit Drug Discover Dynamics

Source: the RF Ministry of Health