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Professor Amir Attaran

Working paper for discussion only. Please email comments to the author.

MODEL LAW ON MEDICINE CRIME

DISCUSSION DRAFT

INTRODUCTION

Medicine crime is the dark side of globalization and health. Rising wealth and falling trade barriers mean that more people than ever before are able to afford and access medicines — an overwhelmingly good thing for public health — but this comes at the cost oforganized criminalsalso traffickingfalsified, substandard or counterfeit medicines globally, which too often produce tragedies of injury or death. To date, the salutary and criminal effects of the medicine trade are tightly bound to one another as globalization’syin and yang for public health.

But the relationship need not be as indivisible as that. One can in principle counterbalanceexistingfree trade laws that create opportunities for illicit trafficking, with new criminal laws that make it easier to prosecute the perpetrators, seize their assets, and extradite them to face justice, wherever in the world they may hide. Currently this equilibrium does not exist, becausethe legal project of opening the doors of globalizationhas raced too far ahead of the complementary legal project of stationing “guards”at those doors to fight crime.

Thus the solution to medicine crime, which is facilitated by globalization, is ironically more globalization, although of the criminal law kind. Done properly, patients can benefit from cheaper and more accessible medicines from around the globe, with confidence that those medicines are good quality, safe and effective. This is a goal that the public health community, the law enforcement community, and the pharmaceutical industry certainly can agree on, so long as the focus is not diluted and other agendas do not intrude.

This model law on medicine crime represents the first effort of its kind to provide countries with a legislative template to fight medicine crime. It has its origins in a research project funded by Canada’s Social Sciences and Humanities Research Council, with later funding fromthe UN Office of Drugs and Crime (both aregratefully acknowledged). However, as others have reported, UNODC preferred to develop different model law provisions, which better match European interests andwhich criminalize all fraudulent misrepresentation or falsification of documents affecting medicines, including intellectual property fraudsuch as trademark counterfeiting.[1]

In contrast, this model law is devised with developing countries as the highest priority – because they suffer the most from medicine crime – and specifically excludestrademark counterfeiting andintellectual property violations (see Article 28(2) below). The pure focus is on health, while remaining agnostic onintellectual property violations (because other laws deal with those already).

Before reading this model law, it is important to note three caveats.

First, thismodel law is not ready for implementation. Model laws are by their nature only approximations of real laws, and much like one-size-fits-all clothing, the fit is never perfect. Therefore, any country wanting to use this model lawmustexpect to do some tailoring,to take into account the local legal and medical traditions, prevailing social, economic and cultural conditions, and any relevant constitutional principles.

Second, this model law does not attempt to create a whole new regime of medicine regulation, because doing so would cause clashes with existing medicine regulatory laws. Instead, the design philosophy has been to write this model law in such a way that it can blend smoothly and coexistwith whatever medicine regulatory law that a country already has. For example, the model lawdeliberately avoidsdefining a “medicine” because it is assumed that all countries already have a law to define that word, and obviously, it ismore elegant for this model’s legal provisionstocoexistwith existing laws, rather than to clash with them and necessitate their rewriting.Legislative coexistence was also the design philosophy of a group of legal experts working with the World Health Organization (WHO) in 2007, although it is rejected by the Council of Europe’s MEDICRIME Convention.[2]

Third, and following the coexistence philosophy just mentioned,this model law makes no independent normative judgment about which medicines are “good” or “bad”. Instead, the model law defers to the official quality standards that countries or regions have already chosen, in line with their stage of development. This is the approach favored by the World Health Organization’s Member States, who in 2013 jointly decided that “to prevent and reduce the risk to public health from substandard, spurious, falsely-labeled, falsified or counterfeit medical products,” it is necessary to ensure that “only medical products meeting the national and/or regional regulatory authority requirements are manufactured, imported, distributed and supplied.”[3] No outside judgment is called for in the WHO Member States’ consensus, so none is offered here.

Thusthis model law doesnot contain every aspect of the law that is needed to ensure medicine quality or to combat transnational organized crime, and countries need to have certain foundationallaws in place. Unfortunately, not all of them do: WHO estimates that a third of countries have little or no functional medicine regulation. For these countries, this model law has to be taken along with more fundamental legal reform, and technical assistance is available from WHO and UNODC in the medicine regulatory and criminal law spheres, respectively.

The model law that follows is organized in these parts, and among the key features:

  • Part I contains the statement of purpose and definitions used throughout the model law. There is a key distinction here between merely “substandard” medicines, which are not intentional, and “falsified” medicines, which are substandard by intent. The definitions are broad enough to apply to all sorts of medicine, including compounded medicines, traditional medicines, experimental medicines, and even the ingredients of medicines.
  • Part IIsets out the scope of the model law’s jurisdiction. Included here are some provisions for extraterritorial jurisdiction, jurisdiction over money laundering related to medicine crime, and jurisdiction over offences committed by corporations.
  • Part III contains the basic criminal offences. These include manufacturing, advertising, selling or otherwise trafficking illegal medicines, as well as the packaging of medicines or paraphernalia used in such crimes. Not all the prohibitions are absolute, and some have exceptions (e.g. administering a substandard medicine where there is medical urgency and no alternative). Aiding, abetting and conspiring in the offences is also criminalized.
  • Part IVdeals with the phenomenon of “internet pharmacies”. It criminalizes the use of internet services to sell medicines without a prescription, and criminalizes internet domain name registrarswho maintain an internet address with knowledge that it used for crime. Last, it contains a new innovation that lets the courts seize the electronic payments (e.g. credit card payments) of extraterritorial offenders who refuse to answer an indictment.
  • Part Vsets out principles for criminal sentencing. For example, criminals who target WHO Essential Medicines, which are mainstay treatments for billions of people, or who target anti-infective medicines, where there is a danger of evolving drug resistance, are sentenced more harshly. Where a medicine crime contributes to a patient’s harm or death, that also is sentenced more harshly. Sentences can also be adjusted: downward for persons who assist law enforcement, and upward for repeat offenders.
  • Part VIcontains principles to guide the administration of justice. It rules out using the model law in cases where prosecution is clearly unjust (e.g. scientists using a placebo drug, educators teaching about medicine crime) or outside the realm of health protection (e.g. intellectual property offences like trademark counterfeiting). It also creates a reward system for whistleblowerswho report medicine crime, and provides for witness protection where organized criminal groups threaten them or their families. And it provides guidance to the court on how to determine if a medicine crime contributed to a patient’s injury or death.
  • Part VIIprovides for other coercive measures, such as the seizure of criminal assets and proceeds of crime, and the destruction of seized goods.
  • Part VIIIcontains special measures for international trade. The most important is a power to designate only certain, specially-controlled ports for the importation of medicines, the circumvention of which is a crime. There are also provisions to make transnational medicine crimes extraditable offences.
  • Part IXcontains “safety valve” measures for special cases where it may be necessary to useunregistered and therefore unlawful medicines. These include a transitional mechanism for developing countries that are not yet at the stage of having proper medicine regulation, and an emergency mechanism for disaster situations where a country may need medicines in a hurry (such as a natural disaster, a pandemic, or war).

This model law builds on the previous work of others who are gratefully acknowledged, even if their ideas are not always followed exactly:

  • The advice of the global representatives of the health professions, including the World Federation of Public Health Associations, the International Pharmacists Federation, and the International Council of Nurses.[4]
  • WHO’s 2007Draft Principles and Elements for National Legislation against Counterfeit Medical Productsand the subsequent work of WHO Member States on substandard, spurious, falsely-labeled, falsified or counterfeit medical products.[5]
  • The consensus statement of the African Federation of Public Health Associations.[6]
  • LegitScript, for its expertise in the domain of internet pharmacy crimes.
  • The United Nations Convention against Transnational Organized Crime (UNTOC).[7]
  • The Council of Europe’s MEDICRIME Convention(not in force at this time).[8]

Medicine crime has now reached a point of sophistication that makes itexceptionally challenging to prosecute. The criminals have can mimic flawless packaging, can forge or steal security labels, can copy holograms to a level of detail that needs a microscope to detect, and can evenfakeingredients so artfully that the fakes pass some forms of analytical testing.[9] There is also the problem of licensed pharmaceutical companies, who with gross negligence cut corners and produce medicines that, while appearing legitimate are dangerously compromised.[10] Knowing this, many countries, including at least four of the five permanent members of the United Nations Security Council,[11] and the major medicine-manufacturing countries of the United States and India,[12] treat both deliberate frauds and grossly negligent acts involving medicines as intentional, and therefore criminal in their laws. Some countries even prosecute medicine crime as an absolute liability offence.[13]

When lecturing to audiences of experts such as pharmacists, doctors, or nurses, I have often passed around two medicines — one real, the other fake — and asked them which they would take if their own life depended on it. Just as many guess right as wrong. The average expert, to say nothing of the average patient, simply stands no chance against these criminals. It is hoped that this model law serves as a useful and thought-provoking guide toward ending the criminals’ impunity, and ensuring the safety of every patient.

Professor Amir Attaran

Institute of Population Health

Faculty of Law &

Faculty of Medicine

University of Ottawa, Canada

November 2014

PART I –OPENING PROVISIONS

Article1: Objectives of the Model Law

(1) The objectives of this model law are:

a)to protect the health and safety of humans and animals from criminal activity;

b)todefend the integrity of the medicine supply chain;

c)to complement the prudential regulation of medicines in [insert the name of the State], and;

d)to promote and facilitate national and international cooperation in order to meet these objectives.

(2) This model law shall be interpreted to apply to all crimes arising within its subject matter and the jurisdiction of[insert the name of the State].

Article 2: Definitions and Use of Terms

For the purposes of this model law, the following definitions shall apply:

“Competent authority” means [insert name of the relevant government department] in the case of a medicine for humans and [insert name of the relevant government department] in the case of a medicine for animals;

“Compounded medicine”means afinished pharmaceutical substance created from bulk substances or ingredients for use in humans or animals by a pharmacist or other person authorized to compound medicines under [insert the name of the law governing compound pharmacy];

“Counterfeit medicine” means any medicine that without authorization of the trademark owner bears a trademark that is identical or confusingly similar to a trademark registered in [State or Free Trade Area];

“Domain name” means a text string utilized by the domain name system to resolve an Internet Protocol address;

“Domain name registrar” means a person, wherever located in the world, whoregisters the reservation of a domain name to a person, other than a top-level domain name;

“Falsified medicine” means any substandard medicine that is manufactured, produced or otherwise created in accordance with Article 6(1);

“Good manufacturing practices” means the Good Manufacturing Practices of the World Health Organization or the competent authority, as amended from time to time;

“Organized criminal group” shall mean a structured group of [insert number: two or three] or more persons, existing for a period of time and acting in concert with the aim of committing one or more offences to which this model law applies, in order to obtain, directly or indirectly, a financial or other material benefit.

“Packaging material” means all material used to contain or identify a medicine in single or bulk quantity, and without limiting the generality of the foregoing includes a vial, ampoule, syringe, carton, blister pack, label, hologram, security ink or serial number.

“Person” includes both a natural person and a legal person, unless specified otherwise;

“Proceeds of crime” mean any property derived from or obtained, directly or indirectly, through the commission of an offence or unlawful activity, whether such property is located, or the offence is committed, within or outside [insert the name of the State];

“Registered medicine” meansany finished, unfinished or investigational pharmaceutical product, ingredient, or formulation of active and inactive ingredients, that isapproved for use in humans or animals, in accordance with:

(a)the requirements of [insert the name of all domestic drug registration laws, including for natural health products, traditional medicines and investigational medicines]; or

(b)the order of the competent authority deeming it to be a registered medicine in accordance with the provisions of Part XIII.

“Substandard medicine” means:

(a)for a registered medicine, a medicine that is in contravention of the prescribed specifications of the competent authority, or;

(b)for an unregistered or compounded medicine, a medicine that, excepting any trademark, is misidentified with respect to its identity, source or history;

and without limiting the generality of the foregoing may include a medicine that is expired, degraded, improperly labeled, contains inappropriate substances, or incorrectly formulated ingredients;

“Supply chain” means the sequential chain of custody through which a medicine passes from a manufacturer to a consumer or user;

“Traffic” means to advertise, broker, deliver, dispense, donate, export, import, offer, sell, transfer or transport an item;

“Unregistered medicine” means any finished or unfinished pharmaceutical product, ingredient, or formulation of active and inactive ingredients, other than a compounded or registered medicine in [State or Free Trade Area], that is represented for use in:

(a)the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical or mental state, or its symptoms, in humans or animals, or

(b)restoring, correcting or modifying organic functions in humans or animals.

COMMENTARY:

Arguably the most demanding part of taking legal action against medicine crime is defining wrongful medicines accurately. Previous attempts have been abandoned as too broad or narrow. For example, the member states of the World Health Organization in 2011 decided to abandon WHO’s definition of “counterfeit” medicines because it was overbroad in the sense of potentially criminalizing good quality generic medicines that infringed intellectual property rights. At the same time, the WHO definition was underbroad in that it omitted threats such as falsified medicinal ingredients, or falsified medicines for animals.

To avoid both over- and under-breadth, themode law uses a more sophisticated nomenclature of several terms, which was devised by a team of lawyers, government officials and health professionals from Africa, Asia, Europe and the Americas.[14] Using several unique termsis preferable to using a single term such as “counterfeit” or “spurious” to mean several things. Further, certain words like “counterfeit” already are defined in international instruments like the TRIPS Agreement and the MEDICRIME Convention, but with obvious disagreement on what the term means.[15] The terms used in this model avoid these difficulties.

The model law deliberately does not define what a “medicine” is, since all countries have laws to define that already and it would be unwise for the model to propound a conflicting definition. Instead, the model simply separates a country’s medicines into one of two categories: (i) “registered medicines”, which are the very large majority of medicines in use, and (ii) “compounded medicines”, which are custom-made products usually made by a licensed pharmacist. All systems of medicine (e.g. Western medicine, Chinese medicine, Ayurveda, homeopathy) utilize both registered and compounded medicines, and national legal systems typically provide for both.[16]

Both registered and compounded medicines are legal—except when they are “substandard medicines” or “falsified medicines” as defined here.

A “substandard medicine” is simply one that is mislabeled in some material respect or that transgresses the requirements of its registration by the national medicine regulatory agency. Calling a medicine “substandard” implies nothing about intent. A medicine can be substandard because of natural causes like expiration, or because of gross negligence, or because of fraud.