TWN Info Service on Health Issues (Nov17/08)
22 November 2017
Third World Network

Proposed WHO criteria on medicines in transit open door for seizures

Published in SUNS #8580 dated 22 November 2017

Geneva, 21 Nov (TWN) - A discussion document prepared by the Secretariat of the World Health Organization (WHO) proposes criteria to justify interventions with respect to medicines in transit.

This document is prepared for the 6th meeting of the Member State Mechanism (MSM) to be held from 28 November to 1 December at the WHO headquarters in Geneva.

[The MSM was established under a 2012 resolution of the World Health Assembly, WHA 65.19, "in order to protect public health and promote access to affordable, safe, efficacious and quality medical products, promote, through effective collaboration among Member States and the Secretariat, the prevention and control of substandard/spurious/falsely-labelled/falsified/counterfeit medical products".]

The discussion document suggests the following criteria "as possible justifications for an intervention on the ground of public health":

* Reasonable grounds for suspecting that the medicine is falsified or substandard and/or

* Reasonable grounds for suspecting that the medicine was going to be placed on the market of the country in which it was "in transit" and/or

* Reasonable grounds for suspecting that the medicine represented a genuine and realistic threat to public health e.g. WHO prioritized medicines including the Essential Medicines List, and/or

* Reasonable grounds for suspecting that the consignment represented a genuine and realistic threat to the environment.

[Even though the document does not use the term "seizure", the main form of such intervention has been the seizure of medicines in transit by the customs authorities of transit countries.]

Apart from the question of the legality of such interventions regarding medicines in transit, these grounds provide a blanket justification for the seizure of medicines in transit.

The proposed criterion "reasonable grounds for suspecting" allows customs authorities to intervene in the consignments of medicines in transit.

The document does not provide any clue on what constitutes "reasonable grounds for suspecting". As a result, it is up to the customs authorities to determine the constituent elements of reasonable grounds for suspecting and this could be used as a trade barrier against generic medicines. Further, any reasonable grounds to suspect refers to a medicine in transit that is falsified or substandard or representing a genuine and realistic threat to the public health or a genuine and realistic threat to the environment.

These grounds are too broad and customs authorities often are not in a position to determine whether a medicine is substandard or falsified, let alone that it is a threat to public health or the environment.

The 70th World Health Assembly (WHA) in 2017 adopted the following definitions of substandard and falsified medicines in accordance with the recommendation of the 5th meeting of the MSM:

A substandard medicine: Also called "out of specification", these are authorized medical products that fail to meet either their quality standards or their specifications, or both.

Falsified medical products: "Medical products that deliberately/fraudulently misrepresent their identity, composition or source."

"Any consideration related to intellectual property rights does not fall within this definition.

"Such deliberate/fraudulent misrepresentation refers to any substitution, adulteration, and reproduction of an authorized medical product or the manufacture of a medical product that is not an authorized product.

"'Identity' shall refer to the name, labeling or packaging or to documents that support the authenticity of an authorized medical product.

"'Composition' shall refer to any ingredient or component of the medical product in accordance with applicable specifications authorized/recognized by NRRA [national/regional regulatory authority].

"'Source' shall refer to the identification, including name and address, of the marketing authorization holder, manufacturer, importer, exporter, distributor or retailer, as applicable.

"Medical products should not be considered as falsified solely on the grounds that they are unauthorized for marketing in any given country."

Thus it is extremely difficult, if not impossible, for the customs authorities to make a determination on whether a medicine is substandard or falsified without the help of drug regulatory agencies. Even the drug regulatory agencies need time to carry out laboratory tests to find out whether a medicine is substandard or not.

Legitimising such interventions/seizure by customs would not only create trade barriers but also delay access to medicines in developing countries. Further, it is also a fact that not all substandard medicines pose a threat to human health. Only critical and major deviation from specifications calls for regulatory actions.

In other words, minor deviations from the specifications are not considered as a threat to human life and health.

In the past, as part of the European Union's intellectual property enforcement strategy, European customs authorities seized medicine shipments destined for various developing countries mainly from India.

A freedom of information application by the non-governmental health group, Health Action International, filed with the Netherland's authorities, revealed that in 2008 itself there were 17 such seizures of medicines in transit. Such seizures were also reported from Germany in 2009. At that time the seizures were carried out under the European Union (EU) Regulation No. 1383/2003 on border measures meant for intellectual property enforcement.

The EU regulation on customs enforcement of intellectual property adopted in 2013 (EU Regulation No. 608/2013) also authorises EU customs to intervene in goods in transit.

( ).

In 2011, the European Parliament and Council adopted a directive on "the prevention of the entry into the legal supply chain of falsified medicinal product" ( ).

This amended Directive 2001/83/EC on the Community code relating to medicinal products for human use, stated that "Member States shall take the necessary measures in order to prevent medicinal products that are introduced into the Union, but are not intended to be placed on the market of the Union, from entering into circulation if there are sufficient grounds to suspect that those products are falsified."

The EU directive is only for falsified medicines. However, the WHO Secretariat proposes intervention even in the case of substandard medicines.

The proposal expands the justifications from intellectual property enforcement to include a threat to public health and environment. Thus it significantly broadens the ground for the seizure of medicines in transit.

The legality of such intervention with respect to goods in transit is doubtful. Article V of the General Agreement on Tariffs and Trade (GATT 1994) provides the WTO Member States with freedom of transit.

Even though Article XX of GATT allows exceptions on GATT obligations, including obligations under Article V under certain circumstances, Member States can only depart from the GATT obligations if it is "necessary to protect human, animal or plant life or health".

A transit country that makes an intervention on medicines in transit has to prove the necessity of their measures. Since there are regulatory authorities in the country of import including the drug regulatory agencies to find out whether a medicine is falsified or substandard, it would be difficult to justify such measures by the customs authorities of a transit country under Article XX.

Further, the chapeau of Article XX states: "Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures".

As mentioned above, the drug regulatory agencies of exporting and importing countries are better placed to find out the quality of medicines rather than the unilateral actions of transit country authorities that would fall within the meaning of "arbitrary" or "unjustifiable".

In addition, the Article XX exceptions are mainly to protect the regulatory space of importing countries rather than the country in transit. Therefore, Article XX requires a high degree of proof to justify actions in the case of goods in transit.

Therefore, it is difficult to justify the seizure/interventions by the customs authorities of transit countries without the request of the importing country.

The WHO secretariat's discussion document is heavily drawn from the EU practices without elaborating on the legality of the interventions on medicines in transit. The document states: "In summary, the criteria set out by the European Court of Justice justifying Customs intervention of goods in transit may be a good starting point in determining the factors which would justify an intervention on public health grounds. If there is credible evidence suggesting that a medicine may be substandard or falsified then action could be justified".

The discussion document was prepared in consultation with the World Customs Union and a lawyer. However, the document does not reveal the identity of the lawyer.

It proposes the establishment of a small technical working group, represented by all regions, to make final recommendations.