Kenya Pressured To Implement Anti-Counterfeit Law Despite Access Fears

NAIROBI – An influential manufacturers’ lobbying group in Kenya is pushing the government to start enforcing an anti-counterfeiting law within weeks, despite fears from public health advocates that the new rules will impede access to generic drugs and set an unwanted precedent in East Africa.

The Kenya Association of Manufacturers (KAM) says it wants the Anti-Counterfeit Act to come into force by mid-July and is in talks with the government to make sure that happens. The law was passed last year but has not yet taken effect because of budgeting and procedural delays.

KAM and other advocates say counterfeiters peddle fake batteries, cosmetics, pens and numerous other products – including live-saving drugs – across Africa, with estimates of counterfeit penetration ranging up to 40 percent for some items. The association claims that counterfeits cost companies 50 billion shillings ($650 million) and the government 19 billion shillings ($250 million) in taxes in 2008.

“We needed legislation that was to give backing to the fight against counterfeits,” said Joseph Wairuko, who served on KAM’s anti-counterfeiting committee. “All other laws there before were fragmented and could not support the fight against counterfeits.”

Yet public health advocates argue that the act’s definition of what constitutes a counterfeit product is too vague, and could be used to block the import and local manufacture of generic drugs. If the law goes into effect, they say, similar laws under consideration in Uganda and elsewhere in East Africa could face a smoother ride.

Health Action International (HAI) and other domestic groups fought to amend the act and scored minor success, but are not satisfied with the result. They argue that the act’s language could lump generic drugs – both those that infringe on patent rights and those that do not – in the counterfeit category. They say the two issues of counterfeiting and patent rights must remain separate.

Generics [Note: original modified to remove editing error] are not considered counterfeits because they are not pretending to be a known brand.

“We basically said, ‘If you can assure us that this act will not prevent the seizure of a legitimate shipment of generic medicines, then we’ll be more than happy to go ahead, but there’s no consensus on how to interpret that definition,” said Christa Cepuch, a pharmacist with HAI Africa. “Nobody could assure us that it was going to be OK and that access to generics was not going to be undermined by this act.”

Officials at HAI and elsewhere fear that pharmaceutical companies which have backed the passage of the act could use it as a weapon to clamp down on generic drugs, though they acknowledge not having seen any evidence of such tactics so far in Kenya.

The Act is so broad that it could, for example, allow a pharmaceutical company to charge legitimately produced generics as counterfeits in Kenya even if its patent is not registered there.

“It means one does not have to have IP rights registered in Kenya for it to be enforced in Kenya, which is against the whole principle of territorial application of IP rights,” said Peter Munyi, an intellectual property rights lawyer who works with HAI.

The Kenya Association of Manufacturers says the law is clear. In the meantime, the association says there has been an uptick in the incidence of counterfeit products on the Kenya market as illegal importers rush to get their products on the market before the act goes into effect.

“There’s no blockage of generic drugs. These are recognised as not counterfeits,” said Wairuko. “The law is very clear. Let them consult first and they can then go and talk about something they know.”

As the debate continues, the stakes could not be higher. The US government’s President’s Emergency Plan for AIDS Relief (PEPFAR) programme and the Global Fund to Fight AIDS, Tuberculosis and Malaria, import hundreds of millions of dollars in drugs, almost all of them generic, into Africa each year. Often, those drugs are the only hope for the continent’s poor.

Indian companies have been in an uproar about the Kenyan move. In response to the legislation, the Indian government called a meeting of African ambassadors to note its concern about Kenya’s move.

GlaxoSmithKline, which is a member of the Kenya Association of Manufacturers, says it welcomes the anti-counterfeiting act and “supported its development through local trade association activity,” Lisa Behrens, director of product communications, said in written answers to questions from Intellectual Property Watch.

Behrens said she believes the act’s language does not confuse counterfeits and generics, and said that “even illegal, patent-infringing generics should not be viewed as ‘counterfeits.'”

“Clearly generics have a role to play in improving affordability of medicines to some of the world’s poorest countries and peoples,” Behrens said. “This is why we have provided 8 voluntary licences for ARVs [antiretrovirals] to African generic companies. But the main challenge is less now about the price of medicines but getting products of appropriate quality to the people who need them. We support the importation of generics from India, China and elsewhere so long as they are legal and quality standards are adhered to.”

While HAI Africa and others acknowledge that the act has yet to slow the traffic of generics into East Africa, they fear it could set a precedent. For example, Uganda and Tanzania are both considering bills with similar language. A policy to harmonise anti-counterfeit laws in the East African community also is being discussed.

They also say that whether or not pharmaceutical companies are involved, legally produced generic drugs are being seized in European ports. They point to several recent cases in which customs agents in Europe have impounded legitimate antiretrovirals and other drugs destined from Asia to South America and Africa on suspicion that the drugs violated European patent rights. In January, for example, a shipment of the blood-pressure drug losartan headed from India to Brazil. Merck, which held the patent on the drug, demanded the destruction of the shipment, according to media reports at the time.

“The action has exacerbated the concerns of a number of developing countries that several initiatives to address counterfeit drugs might have a ‘hidden agenda’ to attack legitimate trade in generics,” Frederick Abbott, an international law professor at the Florida State University College of Law, wrote in an essay published by the International Centre for Trade and Sustainable Development. “Once again, the public legitimacy of the WTO is under attack as a consequence of a hyper-extended approach to intellectual property law by some of its developed country members.”

As the debate continues, public health advocates say the real problem is substandard medicines – ones that have expired, or were not manufactured properly – and access to good medicines. Because the Kenyan public health sector routinely faces drug shortages, people must buy their drugs in shops, where the incidence of substandard drugs is much higher.

“We all agree that there is a need to fight counterfeits, but it should really be done in a way that public health and access to generic quality drugs is not impaired,” said Alexandra Heumber, IP Policy Adviser, MSF Access to Essential Medicines Campaign.