[e-drug] How to control pharmaceutical traders/brokers?

E-DRUG: How to control pharmaceutical traders/brokers?
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Dear E-druggers,

Is there a missing link in the control of the global pharmaceutical
trade?

We control starting materials (QC lab), manufacturing sites (GMP
inspections), finished products (medicines registration), pharmaceutical
companies (codes of conduct, licenses, prequalification), procurement
agencies (new WHO guidelines in TRS 937 annex 6), wholesalers (GDP),
pharmacies (licenses), pharmacists (professional register, ethics) etc,
but the international traders or brokers seem to escape control.

Obviously there are many ethical, honest and good-willing traders, who
provide useful procurement services. But how can we be sure?

We could insist on licensing them. This needs to be done by a competent
authority in the country where the trader/broker is based. Such a
country may be far away. Do we trust that far-away authority? How do we
verify that their certificate is genuine? And, how can one assess the
quality of their operations and the products they trade in? Is there a
professional global trading association which can set standards, and do
peer-review? Should we develop GTP? (Good Trading Practices).
What could we then inspect if the medicines are not there, but we find
an office with a computer, fax and telephone?

OK, let's control their products then! But how can we check these if
their traded products are never entering their own warehouses, let alone
the country where the trader is based? Traders often buy products
somewhere else, outsource their production, or ship the (uncontrolled?)
products directly from supplier or source to the target country.
National Medicine laws focus on products, premises, people or processes,
rather than on distant procurement services. Medicine laws are national,
and it is difficult to "license" someone who is outside the country. OK,
agents or importers could be licensed in the importing country.

What can be done in the exporting country? These countries often have an
economical interest to facilitate exports so are not likely to be
"difficult" if the products are exported to far-away countries. This
does not only apply to developing countries but equally to the European
Union, where national authorities do not really check the export of
medicines.

How to control the "no-man-land" between the exporting and the importing
country? Free trade zones are growing rapidly, and are not popular if
they start checking the quality of temporarily stored medicines. Do we
know the temperature in sea-containers where the medicines are stored,
maybe for months?

What can the buyers do? Obviously, they could insist on the documents
that document the whole drug supply chain from raw material to finished
product. They can and should insist on having the name/place of
manufacturer on the label. But how to assess that this is a true
statement? How to assess that Certificates of Origin and even
Certificates of Pharmaceutical Products (so-called CPPs) are authentic?

Brokers might not like to disclose their sources (as otherwise the
customer might cut out the middleman, and buy directly from the original
supplier). So the names on certificates are sometimes erased or changed,
labels are replaced, products are repackaged into new containers,
documents may even be made up. It happens that at the receiving end the
buyer has no way to be sure that the product delivered was the one
originally ordered (from manufacturer X in country Y).

Importing countries could of course insist that all imported products
are registered. But WHO surveys have shown that many developing
countries do not have the capacity, skills or even political will to
invest in strengthening Drug Regulatory Authorities. And the
international community has not (yet) seen this as a priority issue, so
little support is going towards Regulatory Authorities. Brokers can
therefore easily target countries where the regulatory controls are
weak, and circumvent strict controls.

Regular wholesalers or suppliers might sometimes be reluctant to deliver
products to developing countries or war zones as payments are slow or
unreliable. Brokers can offer credit if the price is higher. So in the
end, consumers in those countries run the risk of paying higher prices
for products of uncertain origin and unknown quality.

We think that the honest and good-willing traders should be transparent,
and be prepared to reveal their sources and disclose the information
about the medicines they trade in. But how to establish the difference
between the good and bad guys? Should the regulatory authorities in the
countries where the offices of the traders are based play a role in
ensuring that traders comply with the ethics and good practices in
medicines supply? WHO to develop GTP? Self-control by an international
pharmaceutical traders organization?

The debate is open: tell us about your experiences with traders/brokers,
both the good and bad ones and how you make sure that they perform with
the delivery of good quality medicines. Trading companies are also
invited to react.

Regards

Wilbert Bannenberg, public health physician (wjb1610@gmail.com)
Rob Verhage, pharmacist (verhager@gmail.com)

E-DRUG: How to control pharmaceutical traders/brokers? (2)
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Hi,

I am a pharmacist who is now publishing books for the pharmaceutical and
herbal medicine fields.

Earlier I was employed with a pharmaceutical manufacturer in India where I
was in-charge of exports. During that time (early 1990s), we had just
started exports and could only enter the re-export market initially before
we could get our products registered in consuming countries (mainly Africa).

There are companies concentrated particularly in Antwerp, Brussels and
Hamburg, doing very good business with African and South American countries, where they have got their brand names registered. They used to get their brand name registered in those countries and get them made in India and other countries. There was (maybe still is) a concept called Neutral Labelling where a code is allotted by the drug control authority which uniquely identifies the manufacturer of any product anywhere in the world and the label can still claim the product to be manufactured by the owner of the brand (in any language, French in many cases where we were exporting) although French language is not allowed in Indian labels for sale in India.

Sometimes, these supplies were to be made for a European Aid program, where
there were stipulations that the products must be purchased from European
companies only (to promote European companies). So for example, the brand
owner was in Brussels who gets the supply order for some items in the
international tender floated by the local health ministry. He has an
arrangement (or partnership) with a company in Frankfurt. So he buys the
products from a European company in Germany to satisfy the importing
country. But this German company buys the product from India. In fact most
times the products never entered Europe at all but shipped directly from
India to an African country, say Mali. Remember, this is all legal and above board, all products being duly manufactured in approved manufacturing
facility under the drug control department of India.

However, I believe such an age of innocence is long over. The menace of
counterfeit drugs has changed the equation over the last 4-5 years, whereby
brokers of pharmaceutical products are susceptible to be
exploited/used/controlled/lured by money power.

I have been researching for, and now finally writing, a book on Counterfeit
Pharmaceuticals.

While many reasons and sources have been identified to be addressed by
various parts of the society (like industry, government etc.), there is
universal acceptance of the fact that a weak supply-chain is the place where such counterfeit pharmaceuticals are able to enter the legitimate
pharmaceutical trade in any country. So, chances are that a patient in
Nairobi may go to the nearest health centre of the government and still get
a counterfeit pharmaceutical product that says made by X manufacturer in A
country but has been actually made by Y manufacturer in B country, having
entered the supply chain through a corrupt broker or a corrupt warehouse
in-charge.

The wholesalers and distributors in almost all countries (especially USA and European countries) are subject to very minimal stringent inspections at infrequent intervals, so that the condition is that almost anybody with some courage and bluff, can become a pharmaceutical wholesaler. Chances are that in these conditions, rather than a bored housewife, the roadside petty criminal will enter the game, to his advantage.

While the pharmaceutical companies are not doing enough, the government
agencies are also not looking to be serious about this nemesis. While a long discussion on this subject is not appropriate on this platform, it can be safely said that all concerned parties, need to pull up their socks.

A simple suggestion would be to buy directly from any manufacturer, say 5-10 manufacturers who among themselves can supply all the requirements of a
particular purchase order. This ensures that the products come directly from the manufacturer to the ordering authority. However, this arrangement
requires periodic inspections of the manufacturing site either by the
authority or any designated organization (pre-shipment inspection companies
like SGS or other private or official audit organizations).

A point of caution here: the issue of counterfeit pharmaceuticals should not be allowed to be hijacked by the big pharmaceutical giants to use for
Generic Vs Branded products war, which is a separate issue.

I would be following this thread with interest.

J P S Kohli, B. Pharm
CEO
Business Horizons
www.businesshorizons.com

BUSINESS HORIZONS
Books for Pharmaceuticals and Herbal Medicine
G - 59, Masjid Moth, GK-2, New Delhi 110048 India
Phone: +91-921206 1554 Fax: +91-11-4163 7296 US Fax: +1-815-642 4900

E-DRUG: How to control pharmaceutical traders/brokers? (3)
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Dear E-druggers,

It is very difficult for the brokers to disclose the origin of their
products for the fear that their client may as well buy directly from the
source/manufacturer. The regulatory authority in the country in which the
trader/broker is operating has very little interest in this trader because
the products are not even coming into their country. So for these regulatory bodies to control the traders in their country will be very difficult if not impossible. However, there is still need to regulate their business and those with experience in dealing with these Traders may give their views.

Regards

Langton Mukura
Pharmaceutical Services Manager
Christian Health Association of Malawi
P.O. Box 30378
Lilongwe 3
Malawi
Phone: +265-1-775 180
Email: lmukura@cham.org.mw

E-DRUG: How to control pharmaceutical traders/brokers? (4)
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In 1993 IHD (International HealthCare Distributors) was established by 5
multinationals to, inter alia, stop counterfeit trading. The pharmaceutical wholesalers and pharmacists were up in arms but there is no doubt that this was an excellent move to put the brakes on grey market trading.

Nic Brummer
njb@mzl.co.za

[Info here: http://www.ihd.com/. Having been started by Bayer, Boehringer-Ingelheim, Ciba-Geigy and Roche, the moderator is sceptical. IHC has now more partners and claims to be South Africas main distributor and service many Sub-Saharan African countries. I encourage Nic Brummer (affilitation next time please) to give more information about IHC if he has any experience with them. Or may be someone from SA can contribute?]

E-DRUG: How to control pharmaceutical traders/brokers? (4)
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Two points:
One there are established international principles of agency in the
international sale of goods. The sale of pharmaceuticals is no less a sale
of goods and thus several established sets of laws and practices apply. One is the international law of agency and national laws on agency will apply. These govern the degree to which the buyer/government can "pass through" requirements to the principal of the agent which may or may not be the manufacturer.

Second, as the agency relationship is a business relationship it is likely
that the ministry of trade or whatever it is called has some degree of
regulatory authority. This is so whether this authority is exercised or not
and whether it is sufficient or not. Even though the procurement is for
drugs and thus subject to the ministry of health, it is ALSO subject to the
local commercial laws and any applicable international commercial laws. The issue of agency is one that requires coordination across ministries and an appropriately supportive legal environment. Unfortunately this relationship is not addressed in development work.

Finally the procurement contract should address all issues related to agents but too often these documents are insufficient in many respects, not the least of which is that they do not address nor anticipate the problems, risks or needs of the transaction so that the documents provide direction.

Michele Forzley, JD, MPH
Professor of Law and Consultant
mforzley@comcast.net
301-565-0680

E-DRUG: How to control pharmaceutical traders/brokers? (6)
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Does Mr. Brummer consider "stop counterfeit trading" to be the same as "put
the brakes on grey market trading?"

The first is illegal; the second is not. As many have said in recent
months, these are distinct issues.
http://ssrn.com/abstract=926985

Kevin Outterson
BU Law
mko@bu.edu

Boston University School of Law
765 Commonwealth Ave., Boston MA 02215
617 353 3103
http://ssrn.com/author=340746

E-DRUG: EU DG competition inquiry into the pharmaceutical sector
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First results from the EU inquiry on the pharmaceutical market

http://ec.europa.eu/comm/competition/sectors/pharmaceuticals/inquiry/ind
ex.html [repair link]

Kees de Joncheere
Regional Adviser Health Technology and Pharmaceuticals
WHO Regional office for Europe
8 Scherfigsvej, 2100 Copenhagen, Denmark
tel 45-39171432
fax 45-39171855
email cjo@euro.who.int
website http://www.euro.who.int/pharmaceuticals