Re-framing ‘counterfeit from a public health perspective’: A case for fraudulent medicine
| Author | Marinella Marmo,Rhiannon Bandiera |
| Date | 01 June 2017 |
| Published date | 01 June 2017 |
| DOI | 10.1177/0004865815626768 |
| Subject Matter | Articles |
Article
Australian & New Zealand
Journal of Criminology
2017, Vol. 50(2) 195–212
Re-framing ‘counterfeit from a
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DOI: 10.1177/0004865815626768
case for fraudulent medicine
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Rhiannon Bandiera and Marinella Marmo
Flinders University, Australia
Abstract
‘Black market’ counterfeiters operating outside of authorised industry are often framed as the
perpetrators of dangerous and defective medicines within legal pharmaceutical markets.
However, the assumption that all medicines which deliberately violate regulatory standards
and quality specifications have black market origins is ill conceived, as poor medicine quality
can occur regardless of who the manufacturer of the medicine may be. This paper proposes a
reframing of all pharmaceutical products which intentionally, or negligently, fail to comply with
regulatory standards and which are then fraudulently depicted as being of standard, from
‘counterfeit’ to ‘fraudulent medicines’. This proposal is reinforced with examples from
Australian law, where Australian pharmaceutical companies, who deliberately violated regu-
latory standards and produced defective and dangerous medicines, have been prosecuted
using legislation designed to capture poor-quality counterfeit drugs. The paper argues that
these corporate crimes should not be framed as ‘counterfeiting’ but as ‘frauds’, thus con-
taining acts of ‘counterfeiting’ to existing intellectual property law and providing due recog-
nition for all acts which defraud and cause harm to the consumer.
Keywords
Counterfeit medicine, fraudulent medicine, intellectual property, intellectual property
maximalism, medicine fraud, public interest
Introduction
Counterfeit medicines are an increasing health and crime problem in the developing
world (Dukes, Braithwaite, & Maloney, 2014). Counterfeits make up approximately
10% of all medicines within legal distribution around the globe; in developing countries,
rates are greater than 30% (World Health Organization (WHO), 2012). Some sources
report rates as high as 90% in some developing countries, and estimate that deaths as a
result of counterfeit medicines are likely to be in the hundreds of thousands each year
(Pitts, 2006; WHO, 2003). Unsurprisingly, much of the literature in this area has focused
on the victimisation of consumers and the negative consequences of consumption
Corresponding author:
Rhiannon Bandiera, Flinders University, Adelaide 5001, Australia.
Email: rhiannon.bandiera@flinders.edu.au
196
Australian & New Zealand Journal of Criminology 50(2)
(Armengod & Baudenbacher, 2009; Attaran et al., 2012; Bate, Hess, Brush, & Malaria,
2009), and thus criminalises ‘black market’ counterfeiters as the culpable ‘others’ and the
purveyors of dangerous and defective medicine within legal pharmaceutical markets
(Bate & Boateng, 2007; Liang, 2006).
Yet the ways in which crime and criminalisation are defined within the literature, and
by extension the state, can be fundamentally distorted (Pearce, 1973, 1976). For instance,
many developed countries remain relatively unaffected by the issue of counterfeiting
(WHO, 2003, 2012). We also find that in developed countries, crimes of the pharma-
ceutical industry have been on the increase (Dukes et al., 2014). And while counterfeit
medicines are less of a problem for Australia – counterfeits make up less than 1% of the
medicines within Australian legal supplies (WHO, 2012) – Australia has by no means
been immune to the issue of poor quality and fraudulent medicines. The many crimes of
the Australian pharmaceutical industry over the past decade have been documented in
numerous cases (Department of Health and Aging (DoHA), 2003; R v Comax-Pharma
Pty Ltd, 2008; R v Pan Pharmaceuticals Pty Ltd, 2008; Secretary, Dept of Health and
Aging v Prime Nature Prize Pty Ltd (in liq), 2010) and scholarly sources (Faunce, Urbas,
& Skillen, 2011; Faunce, Urbas, Skillen, & Smith, 2010). In developed countries such as
the United States (US), deaths as a result of the frauds and malpractices of the pharma-
ceutical industry far outweigh those rates recorded for murder and manslaughter
combined (Dukes et al., 2014).
We therefore argue that it is ill conceived to assume that the failure to comply with
good manufacturing practices and quality specifications is limited to non-authorised
manufacturers, and that corporate non-compliance with such standards cannot be a
result of ‘deliberate causes’ – a fact which is ‘often ignored or underestimated’ within
the academic literature (Cauldron et al., 2008, p. 1063). Central to this often overlooked
criminological issue is the need to acknowledge that the frauds and malpractices of
pharmaceutical companies also lead to a violation of regulatory standards, and the
production of poor quality and fraudulent medicines. This paper therefore distances
itself from the criminalisation angle embraced by recent literature which frames black
market counterfeiters as the culpable ‘others’. Instead, this paper focuses on those harms
experienced by individual consumers as a result of the malpractices and frauds of the
pharmaceutical industry; an issue which has been under discussed, if not neglected by,
the academic literature.1
Tension exists for counterfeit medicines – one of many types of poor quality and
fraudulent medicine in circulation – due to a conflict between intellectual property (IP)
enforcement and public health protection. Unlike other commonly counterfeited items, a
counterfeit drug not only infringes upon IP rights but is also capable of causing physical
harm. However in current definitions for counterfeit medicines, the counterfeiting
aspects of these offences (the misrepresentation of the goodwill and reputation of the
rights holder) are not made distinct from those aspects which also make these medicines
‘fraudulent’ to the consumer (the deliberate misrepresentation of the good which leads
one party to dishonestly ‘gain’ over another). The failure to distinguish between the two
interest issues impacted by counterfeiting (private and public) has caused conflict at the
international level in developing an exact definition for counterfeit medicines.
‘Counterfeit’ therefore remains a conceptually vague term within both legislation and
Bandiera and Marmo
197
the academic literature, and many poor quality and fraudulent medicines are often
mislabelled as ‘counterfeit’ as a result.
This paper highlights the consequences of this lack of clarity by providing examples
from Australian law. These case studies demonstrate instances where legislation
designed to capture poor-quality counterfeit medicines has been used to prosecute
Australian pharmaceutical companies for the intentional production of non-compliant
and fraudulent medicines. We propose to reconceptualise these drug misrepresentations
experienced by consumers as ‘fraudulent medicine’ and ‘medicine fraud’ rather than as
counterfeit medicines, so as to frame the harms caused by intentionally (or negligently)
non-compliant and fraudulent medicinal products in much clearer terms. Adopting a
term like ‘fraudulent medicine’ to categorise all medicines which deliberately violate
regulatory standards and quality specifications, regardless of the type of manufacturer,
would allow acts of counterfeiting (violations of private rights) to be contained to
existing IP law and would provide due recognition to those acts which defraud and
cause harm to the end consumer. As a consequence of this reframing, victims would
have much clearer and tested protection from the state, while also allowing for the
punishment of companies – and by extension, black market medicine counterfeiters –
beyond the strict limits imposed by current criminal laws. This would also serve the
purpose of clarifying the misconceptions the term ‘counterfeit’ has generated within the
literature and beyond by centring the responsibility for IP enforcement with pharma-
ceutical companies.
This paper explores these issues in three parts. Part One re-conceptualises the term
counterfeit medicine to make clear the distinction between the private and the public
interest issues impacted by the offence. Part Two examines the ways in which
counterfeit medicines are currently defined within the international space and in
particular, how a lack of consensus in defining the issue at the international level
has given rise to the conceptual problems inherent to most present-day definitions.
This section begins by evaluating the definition developed by the WHO in 1992, and
the difficulties WHO has since faced in attempting to frame drug counterfeiting as a
public health-only issue. Part Three will in turn examine how counterfeit medicines
are defined within Australian law and under the Therapeutic Goods Act 1989 (Cth).
Selected case studies, which include Curacel International, Pan Pharmaceuticals,
Comax-Pharma and Prime Nature Prize (PNP), are provided to demonstrate the
net-widening effect of the current definition and thus, its ability to misconstrue
true rates of criminal counterfeiting and corporate crime in the Australian pharma-
ceutical industry.
Part one: A conceptual breakdown of the offence of
counterfeiting within the IP context
It is important to emphasise here that ‘[e]xact definitions in this field are of crucial
importance’, as previous attempts by the research-based pharmaceutical industry to
curb the trade of counterfeit medicines, while often well...
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