The problem of falsified medicines is substantial and growing. According to European Customs' statistics, between 2006 to 2009 the number of such medicines seized at the point of entry into the EU rose three-fold – to some 7.5 million items.
How many actually made it through in the same period is a matter for conjecture, but with the global production now no longer focussed just on so-called 'life-style' products, there have been some alarming instances of fake versions of important therapeutic medicines finding their way into legal outlets.
It is an undeniably lucrative market. Worldwide, falsified drug sales are expected to reach €60bn this year, and within Europe alone – where a Pfizer-commissioned study suggests a staggering one-in-five of the population has purchased prescription-only medicines from illicit sources – worth more than €10.5 billion annually.
Against this background, the Council of the European Union's formal adoption of the Directive on Falsified Medicines in May at its first reading – and with the sole abstention of the Latvian delegation over measures that might extend the provisions to non-prescription drugs at a later date – came as little surprise to anyone.
However, despite the welcome it received from stake-holders in general, it is clear there will be implications for the industry. With the clock ticking on its transposition into member states' respective laws, many of the critical details still remain to be decided.
One of the most critical details will surely be the protection of the upstream supply chain, which may ultimately have the most significant impact on the industry, particularly in respect of importers, manufacturers and distributors of active pharmaceutical ingredients (APIs).
Upstream implications of adopting the Directive on Falsified Medicines
The headline elements of the Directive have been widely reported – a whole raft of measures designed to safeguard the chain of supply, which the European Federation of Pharmaceutical Industries and Associations (EFPIA) called "an important move in achieving greater protection for patients from counterfeit medicines." These new initiatives include the addition of tamper-proof seals and safety features to verify the authenticity of prescription medicines down to the individual pack, along with greater provisions to deal with internet sales and tougher sanctions for those who distribute or trade in falsified medicines.
However, it is the features intended to protect the upstream supply chain which may ultimately have most impact on the industry, particularly the rules surrounding the actions of importers, manufacturers and distributors of APIs.
Arguably one of the most important of these will be the harmonisation of the good manufacturing practice (GMP) requirements that the Directive has ushered in – along with the significantly enhanced oversight conditions it imposes on manufacturers for ensuring compliance.
With the majority of APIs being imported from non-EU countries, chiefly China and India, this is obviously an important step, but it is one which will leave pharmaceutical companies needing to be able to demonstrate greater direct supervision of their upstream supply chain.
Once enshrined in law, unless the country of origin is officially listed as having 'equivalent' regulatory controls – based on EU GMP rules – the Directive calls for documentary confirmation from the appropriate national body to confirm the ingredients comply with the European GMP conditions for imported APIs. In addition, a written declaration from the manufacturer that their API suppliers have been properly audited for GMP compliance will also be necessary.
Further along the supply chain, registration is to be extended to include brokers, acting as intermediaries in the sale and purchase of APIs, while 'qualified persons' at pharmaceutical companies find themselves with increased obligations to verify API provenance and report any instances of falsification.
It all forms part of what consultant biochemist Dr Clare Miles describes as a "shifting emphasis" placing greater responsibility on the industry as a whole.
"The question [of falsified medicines] is going to change life for distributors too," she said, referring to the new European Commission (EC) guidelines on good distribution practice (GDP), which were put out for consultation in July.
The existing arrangements were drawn up at a time when the pharmaceutical industry was much less globalised, which as the EC document points out, means "the content of the guidelines on GDP published in 1994 is no longer adequate" for today's complex, multinational supply chain. "It obviously has to be brought into step with the Directive," she concedes, "but in its present form, it's pretty clear that things are going to change for a lot of sectors of the industry."
The draft contains a range of requirements, extending and enhancing previous GDP, with the issue of falsified medicines and control of APIs cropping up throughout – and like the Directive itself, it too has been specifically broadened to encompass brokers, despite their effectively indirect role in the supply chain.
There are changes suggested too in what constitutes 'storage' – consignments warehoused for more than 24 hours could fall within the scope of wholesale distribution licensing – and to the necessary level of record keeping required, but Miles believes it will be authentication that will have the biggest repercussions for the industry at large.
It is a key component of the Directive and appears throughout the GDP document. "The smart money is on serialisation in one form or another. It's not a big jump; Belgium and Germany do it already," she explains. "Adding serial numbers to individual packs will certainly help verify medicines. It'll need resources to implement, and it means more work at the point of dispensing – but the real nightmare would be for pharmaceutical wholesalers, if they're going to have to start scanning down to the individual pack level. It's not exactly going to speed up the distribution chain, and it would be bound to impact on the day to day running of pharmaceutical companies."
Refining the details of the Council of the European Union's Directive
Work to refine the details of implementation is being undertaken using the new 'delegated acts' approach – a relatively novel arrangement for EU law-making which arose in the wake of the final adoption of the Lisbon Treaty. Although this route changes some of the ways that stakeholders can make their feelings known, as Brian Ager, Director General of EFPIA, made clear in a statement, their input remains essential to ensure the Directive's success. There is widespread support amongst the industry for the goals the new approach sets out to achieve, with joint positions being drawn up, for instance, between the EFPIA, the Pharmaceutical Group of the European Union (PGEU) and the European Association of Pharmaceutical Wholesalers (GIRP), alongside companies like Pfizer, GSK and Grünenthal Pharma taking closely aligned positions.
At the same time, the intensified regulatory dialogue called for between EU and non-EU manufacturers, particularly in relation to APIs, is also being explored. How all this will eventually translate into practice, however, remains to be seen – and thus it will be a little while before the full implications of the Directive for the industry will become apparent. As Dr. Cornelia Kompe of Grünenthal Pharma puts it, "we will await the corresponding results."