Wednesday, March 06, 2013

EMHN 8: Brand Protection and Safe Medicines

Our international health network has produced another good paper, Fake medicines in Asia The importance of brands to medicine quality. Authored by a good friend Philip Stevens, this six pages long paper is able to argue that corporate brand protection and brand competition coupled with rule of law, are the best way to protect the public from counterfeit and/or substandard medicines.

Fake or substandard drugs are dangerous and can be fatal. Either the patient does not get well, allowing the disease inside the body to mutate and become more serious, or the drug causes several adverse reactions and trigger more diseases and complications. 

As the "cheaper medicines" mantra is all over the country and the planet, somehow it gives an opening to dirty businessmen to offer really cheap but fake or substandard medicines. They do this by introducing unknown or lesser known brands to non-suspecting patients and drugstores. Or they simply copy the logo, brand and trademark of some known drug manufacturers, innovator or generic, and sell cheap.

The chief government regulating agency is the Food and Drugs Administration (FDA, in the Philippines, in the US, and so on). The big problem is that this small bureau is mandated to check on the quality of (a) drugs, medicines and vaccines for humans, (b) drugs, vaccines for animals and fishes, (c) food/drink supplements and vitamins, (d) food and juice ingredients, sauces, etc., (e) perfumes, shampoo, soap, detergents, body odor spray, etc., (f) poisonous substances like insecticides and pesticides, and many others.

I think these products constitute at least 10 percent of the total output of the economy. FDA therefore, should have pharmacists, doctors, dentists, chemists, physicists, biologists, engineers, on top of having lawyers and administrators. Is it possible to have such an agency with supposedly super-technical powers and capability to minimize or control mistakes in doing its functions? I really doubt it.

One way to minimize risks and threats to public health, is to devolve product quality to the manufacturers and traders themselves, via brand protection and competition. Like "Jollibbee or McDonalds burger yan", "Starbucks or UCC or Figaro coffee yan", "Pfizer or GSK or Unilab or Pharex medicines yan", "Mercury or Watsons or The Generics yan", and so on. Consumers hold on to the brand as generally safe and these companies do all they can to avoid not even a single, not one, case of food or drinks or drug poisoning. 

Thus, products of these brands will be given minimal regulations and approval process. The main regulator for these brands and companies is the fear of being blacklisted or boycotted or sued by consumers due to bad or unhealthy products. Since these are huge if not global brands, the thought of being put in a bad light scares them more than the peering eyes of a few inspectors from the regulatory agency. Then the latter can focus their energy and resources on new products and brands. Shrewd and opportunist businessmen can put up a company and sell bad products and services that can harm public health. When the company is blacklisted, they simply close down the company and put up a "new" one and create new schemes to fool the public.

The sub-topics discussed by the paper are:

* Limits of regulation
* Brand competition and drug quality
* Intellectual property and brand integrity
* Brands are not just for multinationals
* Rule of law in defending brands
* Technological solutions to fake medicines
* Malysia's meditag scheme
* 2D and QR barcodes
* Dangers of government-mandated technology

And the paper's brief conclusions are:
The most fundamental cause of the spread of fake drugs in Asia has been the inability of manufacturers to protect the identity of their products. This is largely down to a lack of functioning rule of law, which makes it very difficult for manufacturers to protect their trademarks and brands via the civil and criminal courts – thereby handing a free rein to counterfeiters. The extra regulation called for by many commentators may well entrench the corrupt relationship between criminals and certain drug regulators. 
Strengthening the rule of law is a vital but long-term process. In the meantime, the private sector should take advantage of its innovative capacity to experiment with different technological solutions to brand infringement. It is well placed to lead this process, as it has unparalleled access to the entire pharmaceutical supply chain, as well as the clear financial incentive to protect its revenue. Governments should encourage this process, but refrain from mandating specific technologies or systems.

This new paper is another good reference for both government administrators and healthcare advocates in the country or abroad. Markets work. And though there are indeed market failures, there are also market solutions to such failures. Government simply have to focus on only one thing: rule of law. Private players and enterprises should do what they say they are supposed to do, and not offer counterfeits or substandard if not entirely useless products and services. If they don't, existing  governmentregulations and the penalty system should be slapped on them. No exception and no one can grant an exception. The law applies equally to unequal people.

See also:
On IPR Abolition 12: Patent, Mini-Monopolies and Trademark, September 20, 2011
EMHN 4: Free Trade, TPP and Public Health Protection, January 13, 2013
EMHN 5: Free Trade and Markets in Healthcare, January 17. 2013 
EMHN 6: Fake Medicines in Asia, February 15, 2013

EMHN 7: Free Trade Improves Public Health, February 26, 2013

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