Increased efforts and revamped strategy to fight counterfeiting and piracy in the U.S. pharmaceutical market and several other industries worldwide took place in June.
The Organization for Economic Cooperation and Development (OECD) released a report on June 4 about the economic impact of counterfeiting and piracy. The Coalition Against Counterfeiting and Piracy (CACP) announced a high-intensity campaign to strengthen enforcement of U.S. intellectual property rights laws.
CACP, led by the U.S. Chamber of Commerce, combines more than 200 disparate groups, ranging from the Pharmaceutical Research and Manufacturers of America (PhRMA) to the Motion Picture Association of America–all banded together to combat global piracy and counterfeiting.
Strength lies in unity, said Peter Pitts, a former Food and Drug Administration (FDA) associate commissioner and current president of the Center for Medicine in the Public Interest, a free-market group based in Washington, DC. If all CACP members work toward protecting intellectual property rather than fending for themselves, they can make a difference, Pitts said. A victory against pirated movies or music also helps prevent counterfeit drugs from entering the country, he said.
Six Goals
As part of that effort, said Katie Wilson, spokesperson for the U.S. Chamber of Commerce Global Anti-Counterfeiting and Piracy Initiative, CACP will focus on six goals:
- to increase resources at the Department of Justice and Department of Homeland Security;
- to strengthen enforcement at U.S. borders;
- to toughen penalties;
- to improve coordination within the federal government;
- to reform the civil and judicial processes; and
- to educate consumers.
“The coalition’s hope is that we can do against counterfeiting and piracy what mothers have done [to prevent] drunken driving,” Wilson said.
Large Trade
CACP’s announced goals come in the wake of growing threats to intellectual property. Just how much is stolen, no one can say exactly.
The OECD study reported as much as $200 billion worth of trade in counterfeited and pirated products in 2005 alone–excluding those produced domestically or distributed over the Internet.
“If these items were added,” the OECD authors wrote, “the total magnitude of counterfeiting and piracy worldwide could well be several hundred billion dollars more.”
Conservative Estimate
Wilson said the OECD study’s numbers are lower than those reported in other studies, and the data do not break the numbers into individual industry sectors.
CACP encourages industries to monitor counterfeiting and piracy, Wilson said, but “that’s a difficult thing to quantify.”
Nonetheless, estimates of pharmaceutical counterfeiting are chilling. According to the FDA Web site, more than 10 percent of drugs worldwide are counterfeits–and in some countries, more than 50 percent of the drug supplies are fake. According to a World Health Organization paper, “Combating Counterfeit Drugs: A Concept for Effective International Cooperation,” counterfeit drugs constitute 1 to 50 percent of the total pharmaceutical market.
“These unacceptably high levels of counterfeit drugs confirm that national [anti-piracy] measures are insufficient,” the WHO authors wrote.
CACP has attracted the government’s attention, Wilson said. Most public officials now have designated staff members to track intellectual property issues, she explained, and they’re also beginning to understand the ramifications those issues have for the public.
Pending Legislation
Sen. Evan Bayh (D-IN) and Sen. George Voinovich (R-OH) introduced bill FS 522, The Intellectual Property Rights Enforcement Act, in February to create an organized force to attack counterfeiters and pirates, heighten enforcement, and develop a strategic plan to protect intellectual property. At press time, the bill was pending in the Senate Judiciary Committee.
Eric Kleiman, Bayh’s spokesperson, said the bill would create an international task force to enforce each nation’s domestic intellectual property laws.
Pitts said strict enforcement will inhibit counterfeiters and pirates, who currently rake in enormous profits with low risk.
“Everywhere they go,” Pitts said, “they need to know they’re going to be hounded, caught, prosecuted, and incarcerated.”
Differing Views
Free-market experts had differing views of the new enforcement plan.
Linda Gorman, a health policy expert at the Independence Institute, a free-market think tank based in Colorado, said as long as foreign drugs are imported, a few counterfeits will always slip through.
“International law enforcement is a good thing, but likely will not stay ahead of the counterfeiters,” Gorman said. “Rather than pretending that the American government can ensure that everything represented as a drug is safe, it would do better to stop bashing pharmaceutical companies, educate people to the danger, and celebrate companies who go the extra mile to ensure that their supply lines are secure and that they are selling the real thing.”
Paul Gessing, president of the New Mexico-based Rio Grande Foundation, said, “I think it makes sense to work with other nations in an attempt to stop the manufacturing and flow of counterfeit drugs. After all, the United States can’t police the rest of the world, and the only way to get other nations to make this a priority is to bring coordinated pressure to bear.”
Consumer Awareness
Arming the government is only half the battle, as consumer awareness plays a key role in stopping counterfeiting and piracy, said PhRMA spokesperson Jennifer Page. That’s part of the organization’s current mission.
Wilson said constituents need to know how they’re being affected.
“Only when counterfeiting and piracy become a dinner-table conversation do we initiate real change,” Wilson said.
Jillian Melchior ([email protected]) writes from Washington, DC.
For more information …
The World Health Organization report, “Combating Counterfeit Drugs: A Concept for Effective International Cooperation,” is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to http://www.policybot.org and search for document #21713.
OECD campaign against drug piracy, http://www.oecd.org/document/27/0,3343,en_2649_34173_35650907_1_1_1_1,00.html
The Intellectual Property Rights Enforcement Act, http://thomas.loc.gov/cgi-bin/bdquery/z?d110:s.00522:
