Thefts, Counterfeits, and Parallel imports. Andrea C. Klein

Transcription

1 Thefts, Counterfeits, and Parallel imports. Andrea C. Klein

2 Together with counterfeiting theft of medicines is emerging as the new frontier of pharmaceutical crime between 2006 and 2013 one hospital out of ten registered thefts of pharmaceuticals A pharmaceutical company official said on average five cargoes disappeared every month in Italy

3 A growing emergency

4 Value of thefts by type of medicines

5 Why stealing medicines Primary goods Growing demand High price Small and light Risks lower than dealing narcotics Easier to counterfeit

6 Thefts from warehouses or distribution trucks Given the drivers discussed, a high level of organization is needed The structure of the supply chain and its vulnerabilities are crucial for criminals when deciding how and where to steal medicines. Driven by price differences throughout Europe Weakness of the distribution chain

7 Not an exclusively Italian crime

8 The Italian Job: the Herceptin case

9 The Italian Job: the Herceptin case March 2014, a U.K. wholesaler first notices the discrepancies between lots numbers on the packaging of Herceptin Some of these lot numbers were found in the Italian Drug Agency database of stolen drugs established in 2013 The drugs were stolen from hospitals and distribution trucks and transferred to the licensed Italian wholesaler After being laundered through fictitious foreign brokers products were directed to high price markets in northern Europe, often to Germany

10 The Italian Job: the Herceptin case Germany is the market that attracts most of the legal parallel trade 1. It is a market with higher prices 2. German pharmacies need to fulfill a specific quota: 5% share of the total turnover has to derive from goods originating from the parallel trade

11 The Italian Job: Hungary the Herceptin case Italy United Kingdom Germany Romania This distributor received invoices for the drugs from fake wholesalers/brokers Latvia set up in Hungary, Romania and Latvia to provide clean purchasing invoices and then sold in other European Countries

12 The Italian Job: the Herceptin case In at least one of the stolen doses the active principle was replaced by an antibiotic The investigation uncovered that criminal organizations sometimes dilute the active principle of the drugs to increase profits

13 This case shows the combination of pharma crimes amplified by weaknesses in the distribution chain a) theft and b) drug counterfeiting c) illegal trafficking using the parallel imports distribution network a. THEFT: Highly organized international criminal network mostly based in Italy, that commissions thefts

14 b. DRUG COUNTERFEITING: A chemical analysis of one of the counterfeit products labelled as Herceptin has confirmed the product did not contain the active ingredient for Herceptin. Additionally, in some cases, while the doses contained Herceptin, there was evidence of tampering or dilution.

15 c. PARALLEL IMPORTS: the discovery of fake and diverted cancer drugs puts the spotlight on parallel distributors more than on parallel imports Parallel importers represent a small percentage of the overall market for cancer drugs but account for most cases of counterfeits or medicines under standard.

16 Impact of Thefts on IP - Trademark Reputation - Counterfeiting rr r

17 The Falsified Medicine Directive DIRECTIVE 2011/62/EU Italy: published in the Official Journal on 07/03/2014

18 The EU s Falsified Medicines Directive is in force since 2013, but not yet fully implemented. New measures include an obligatory authenticity feature on packaging, logo identifying legal online pharmacies, and tougher rules on controls and inspections of producers. While there is discussion around these new measures it is the definition of false medicament in the FMD that allowed the Italian Medicines Agency to investigate and report to criminal authorities suspect activities.

19 Falsified Medincinal Product: Any medicinal product with a false representation of: identity: packaging, labelling, name or compostion; source, including manufacturer, country of manufacturing, country of origin: its history, including records and documents relating to the distribution channel used..

20 15 criminals arrested in the last 4 weeks March 16: pharmaceuticals seized - including oncological drugs that needed specific storage conditions AIFA now leading the FakeShare project

21 FakeShare cooperation and intelligence against online selling of falsified medincines web tools to facilitate sharing of information among Member States and support enforcement

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23 Thefts, Counterfeits, and Parallel imports. Andrea C. Klein Thanks!