Kenya recently adopted an anti-counterfeit law, and now its neighbor Uganda is contemplating adopting similar legislation. The drive to combat counterfeit drugs is a good one, and East African nations definitely needed to initiate legislation, since counterfeit products probably harm thousands in the region. But there are problems with Kenya's legislation and the pending legislation in Uganda, which according to many health groups, could have serious implications on the importation and production of generic drugs, which are identical to branded products.
It is unfortunate that poorly crafted law is undermining improved adoption of anti-counterfeit efforts, and sidetracking other efforts to improve manufacturing practices. Kenya defines counterfeiting as an intellectual property breach of a protected good, which can include:
the manufacture, production, packaging, re-packaging, labeling or making, whether in Kenya or elsewhere, of any goods whereby those protected goods are imitated in such manner and to such a degree that those other goods are identical or substantially similar copies of the protected goods.
The bill goes on to further define counterfeiting as "the manufacturing, producing or making of copies, in Kenya or elsewhere, in violation of an author's rights or related rights." This has generic drug manufacturers, notably from India, on edge.1 African countries account for 14 percent of the estimated $8 billion in drugs that India exports, with Kenya being the third largest African importer of Indian drugs.2 Many Indian drug companies manufacture copies of branded drugs that have gone off patent. However, drug patents expire at different times in different countries. Indian drug companies argue that Kenya's legislation protects the intellectual property rights of drugs registered anywhere in the world. Therefore, if an Indian drug company exports a drug to Kenya that is still under patent in another country, Kenya could label it as counterfeit and take legal action against that company.3
The Kenya Association of Manufacturers, a coalition of 600 small, medium and large enterprises, is the only organization to publicly defend Kenya's Anti-Counterfeit Act. KAM says that it is in place to protect mwananchi [the citizen] from the detrimental effects of using bogus products. KAM rebuffed complaints from generic manufacturers last September, claiming "that measures will be put into place to ensure that it does not in any way meddle with the importation of generics". But it appears such measures have yet to be enacted.
Uganda's proposed anti-counterfeit legislation, the Counterfeit Goods Bill, is expected to be very similar to Kenya's Anti-Counterfeit Act, right down to the controversial definition for counterfeiting. Uganda is the fourth largest African importer of Indian drugs, 4 and if these bills restrict access to generic drugs as is predicted, it could be harmful, to both India's pharmaceutical industry and more importantly the citizens of these countries.
But Kenya and Uganda may not be the only ones to blame for drafting such ambiguous bills. In reading the WHO's report and draft resolution on counterfeit drugs, it is easy to see why there is confusion about what exactly defines ‘counterfeit'; rather than clarifying the issue, the WHO seems to have complicated it. To make matters worse, counterfeit drugs were dropped from the 2009 World Health Assembly agenda, leaving the issue unresolved. A worldwide consensus on a definition for counterfeit drugs is imperative to ensure countries implement legislation that does not inadvertently restrict access to life-saving generic drugs.
While Kenya's anti-counterfeit bill may be ideally suited to protect the manufacturers of fashion items or electronics, its lack of clarity in relation to pharmaceuticals makes it more difficult to deal with an equally serious quality issue. For, wherever surveys have been taken to assess all low quality drugs in the market, counterfeiting is often a smaller problem than the proliferation of legal drugs, which have either been manufactured poorly or stored inappropriately. My own research found that over a third of drugs bought in pharmacies in the Kenyan and Ugandan capitals, Nairobi and Kampala, failed basic quality tests, the majority of these were probably not counterfeit products.
Ironically, Kenya's legislation could condone a shoddy and dangerous product which does not infringe any patent, but outlaw a safe, generic, which might be on patent in another continent. The health risks from all substandard drugs, regardless of whether they breach the Kenyan law are critical and can include treatment failure, unknown side-effects, development of resistance, death and wasted resources. The Kenyan law and current Ugandan bill are only intended to deal with counterfeits, but they make dealing with substandard drugs even more difficult by widening the scope to include generics. The laws should be amended to remove this confusion.
Roger Bate is the Legum Fellow in Global Prosperity at AEI.