In late 2021, the Prosecutor General’s Office (PGO) of Ukraine, based on the information from the operation units of the State Border Guard Service of Ukraine, initiated a criminal proceeding on manufacturing and illegal trafficking of counterfeit medicines for oncological diseases, hepatitis, HIV etc. According to the prosecution, the criminal group manufacturing and distributing counterfeit medicines was organized by citizens of Ukraine, against whom an indictment has been submitted to the court. The criminal group also included citizens of Russian Federation, Republic of India, Azerbaijan, Republic of Turkey and others. Their identities and role are currently being established during the investigation. 

The pretrial investigation found that the annual manufacturing scale of some medicines ranged from 500 to 3,000 packages worth from $250 to $5,000 per package. The main channels for the sale of counterfeit medicines were advertisements on the Internet. Moreover, the medicines were sold directly to patients through doctors, and the role of doctors is now being investigated.

The Ukrainian PGO Information Policy Department told the Interfax-Ukraine news agency that the investigation was initiated by two pharmaceutical companies – manufacturers of innovative medicines which discovered trafficking of counterfeit as authorized and unauthorized medicines in Ukraine.

According to the information, some of counterfeit medicines were sold through doctors who prescribed unauthorized or expensive medicines and offered patients to purchase them through illegal trafficking channels. However, doctors were not always aware that they were dealing with counterfeits.

Similarly, "grey import" to Ukraine was also conducted without compliance with the regulations on transport of medicines, temperature requirements and outside the official supply lines.

Part of counterfeit medicines was manufactured in small lots in an apartment of one of the elite apartment complexes in Pechersky district of Kyiv. This manufacturing was suppressed in 2019. The defendants are now on bail pending sentencing.

The investigation revealed that the volume of illegal trafficking and shipments of counterfeit medicines in some cases overran the official supply and manufacture of medicines.

Attorney-at-law, Partner at Legal Alliance Company Illya Kostin told Interfax-Ukraine about success and problems in combating counterfeit medicines.

- What did the investigation of the chain that manufactured and sold counterfeit medicines reveal?

The constant cooperation with the Pharmaceutical Security Institute, FBI, law enforcement agencies of India, the detection and the arrest of couriers with large lots of medicines – all that is a reality during the investigation of the counterfeit medicines cases.

In particular, one of the most massive clandestine marketing networks of counterfeit medicines within the territory of CIS, European and Asian countries was detected.

The chain included 164 items of counterfeit medicines; some 45 international pharmaceutical manufacturers whose products had been counterfeited or smuggled into Ukraine. There were 18 countries where counterfeit medicines were sold. The turnover of illegal trafficking of counterfeit medicines is estimated at UAH 150 million.

The pretrial investigation had lasted for about 30 months, during which more than 140 expert examinations appointed by the judicial scrutiny had been conducted and 6 persons had been arrested in Ukraine and abroad within the international investigation.

The mentioned information does only confirm that counterfeit and illegal trafficking of medicines is still cutting issue today. It is being looked into by both public agencies and various organizations, there are roundtable discussions, conferences and other events dedicated to the issue, nevertheless, hardly anyone can succeed in the practical aspects of supporting such operations and achieving the final results.

According to the statistics, the turnover of both the illegal trafficking and the grey import of the pharmaceutical market reaches more than UAH 4 billion per year that only confirms the scale of the problem.

- How are counterfeit medicines defined in Ukraine's legislation?

It is important to start with the definition of counterfeit medicine as it appears to be the first problem because the definition in the current legislation of Ukraine is not sufficient by all means.

Thus, the Law of Ukraine "On Medicines" stipulates the following:

"Counterfeited medicine is a medicine which is purposely marked non-identically (not respectively) to the data (one or more of them) about the medicine with the appropriate name entered in the State register of medicines of Ukraine, as well as a medicinal product intentionally counterfeited, and does not correspond to the data (one or more of them), including the composition, about the medicinal product with the appropriate name, entered in the State register of medicines of Ukraine."

Based on the mentioned above it may be concluded that medicines which are not authorized in Ukraine, but are counterfeited, are not de jure considered to be so. The example of such a situation is when a medicine is authorized in Ukraine at a dosage of 10 mg but the same medicine in a dosage of 5 mg is not submitted to the State register of medicines of Ukraine. Therefore, the counterfeit medicine in a dosage of 5 mg won`t be considered to be counterfeit under the current legislation of Ukraine.

However, pursuant to the legislation, international legal acts ratified by the Verkhovna Rada of Ukraine have more legal force than the national ones.

Thus, the Council of Europe Convention on the counterfeiting of medical products and similar crimes involving threats to public health No. 4908-VI was ratified in Ukraine and entered into force on January 1, 2016. The Convention defined the term medicine that doesn't require the authorization of such medicine in Ukraine. In addition, there also is a definition of the counterfeit - a false representation as regards identity and/or source. 

Therefore, the use of the Council of Europe Convention on the counterfeiting of medical products and similar crimes involving threats to public health provisions expands the opportunities of prosecuting persons for counterfeiting medicines.

- Effect of counterfeiting of medicines

Unfortunately, the problem of the imperfect terminology is not the main one in the counterfeit medicines control. The illegal trafficking is harmful for the human life and health as well as for the national budget of Ukraine.

As it was stated above, the turnover of counterfeit medicines amounts to over UAH 4 billion per year, more than UAH 600 mill of which are annually not paid to the national budget of Ukraine.

As for the damage to human life and health, it is impossible to estimate such damage due to the deficiency of the abundance of data. It is partially related to the fact that medicines that are being counterfeited are for the treatment of AIDS, hepatitis, various forms of the oncological diseases, efficacy of which is impossible to study due to the severity of the diseases.

People buy counterfeit medicines for a number of reasons, the main ones being high prices of medicines, higher prices of certain medicines in Ukraine than in other countries, lack of the official sale of specific innovative medicines, the need for medicines in case of their exit from the market.

We can only guess the number of people that ended up getting counterfeit medicines that were, at the very least, non-effective and solely consisted of vitamins or innoxious substances and did not cause serious health consequences.

Nevertheless, the complications do not come to an end since such procedures as investigation and expert examination require further improvement.

- What are the difficulties of conducting expert examination of a counterfeit?

Let us start with the expert examination. This is one of the essential steps in determining whether a medicine has been counterfeited.

The most common ways of counterfeiting are as follows: repackaged cheap substitute (generic) as the original medicine, prepackaged medicines with impurities, in other words a situation when the concentration of the active ingredient of the medicine is drastically downplayed, a complete counterfeit where the unknown substances are displayed as the original medicines.

The expert examination is conducted to determine the way medicines were counterfeited. The proper laboratory is required for the high quality of the expert examination.

- Are there such laboratories in Ukraine?

Such laboratories, surely, do exist in Ukraine but they are not certified according to the Law of Ukraine "On Forensic Examination." Yes, we can lay emphasis on the State-owned enterprise "Central Laboratory for Drugs Quality Analysis and Medical Products" (hereinafter referred to as the Central Laboratory) that is authorized to conduct the testing of medicines for quality control of medicines in case of the suspicion of counterfeiting of such medicines, as well as to represent Ukraine at the General European Official Medicines Control Laboratory Network (GEON). Nevertheless, the Central Laboratory is not authorized to conduct the forensic examination as the result of only such examination is considered to be the proper evidence.

This situation is one of the reasons why such a small number of cases concerning counterfeit medicines reach the court.

- What are the aspects of pretrial investigation?

According to the information received from the Prosecutor General's Office of Ukraine, the average number of the annually recorded criminal offenses on the territory of Ukraine under Article 321-1 of the Criminal Code of Ukraine (counterfeiting of medicines or trafficking in counterfeit medicines) is about 30, while the average number of such cases annually brought to the court is 3.

The problem of counterfeit medicines control is also caused by the lack of the proper coordination between such public agencies as the National Police of Ukraine, the State Service of Ukraine on Medicines and Drugs Control, the State Customs Service of Ukraine, the State Tax Service of Ukraine and others.

Such cooperation is necessary since counterfeit medicines can be manufactured and distributed in one population center of Ukraine as well as through international channels, the origin of which cannot be traced.

In addition to that, there is a lack of the unified methodology during the pretrial investigation, of the set operating procedures in identifying counterfeit medicines in the current legislation of Ukraine.

Thus, the Criminal Code of Ukraine provides the liability for, particularly, the sale of the scienter counterfeit medicines, therefore such liability is only possible if the intent of a person is established. Hence, it is possible to bring a person to liability only in case if such person was aware of the counterfeiting of medicines. Surely, it is feasible to prove and yet quite difficult as it is necessary to conduct a large number of covert investigative activities (video surveillance, wiretapping of telephone conversations, access to email correspondence, chats and messengers, etc.).

Overall, persons' actions on counterfeiting of medicines are most likely to be classified under Articles 321-1, 305 and 229 of the Criminal Code of Ukraine, meaning that the liability is provided for counterfeiting of medicines, trafficking and smuggling of counterfeit medicines, Illegal use of a trade (or service) mark, registered trade name, qualified indication of origin, or any other intentional violation of the rights to these objects. 

- What is the role of pharmaceutical companies in fight against counterfeit?

Opposed to the criminal offenses against life or property, where the "script" for the investigator to follow is defined and intelligible, problems arise at each stage of disclosing illegal trafficking of medicines. For example, the disclosure of counterfeit medicines, withdrawal of such medicines and sending the sample items for the expert examination. It is common for the regular expert institutions not to be able to identify the fact of the forgery and to only provide information about the content of the substance or its volume.

As a result, situations where the sample items of counterfeit medicines are sent for the expert examination to the laboratories of the pharmaceutical companies whose products are being forged are very common in Ukraine. Thus, the averment of the fact of counterfeiting of medicines in Ukraine is excessively formalized while foreign experience is simpler. In similar situations in foreign countries, pharmaceutical companies can independently confirm the fraud.

The involvement of pharmaceutical companies in the pretrial investigation is crucial. Unfortunately, difficulties arise even in such situations. In most cases there are problems of communication with the pharmaceutical companies, whose head offices are not in Ukraine. The Legal Alliance Company's team has a lot of practical experience of the representation of the pharmaceutical companies' interests in minimizing the cases of counterfeiting of medicines.

It is should be noted that the partnership between the pharmaceutical companies and public agencies during the pretrial investigation is highly important, as the pharmaceutical companies are the ones that bear financial losses along with the national budget of Ukraine.

Summing up the information, the real changes in the control of counterfeit medicines require the constant and effective cooperation between the public agencies and pharmaceutical companies, as well as the amendment of Ukraine's current legislation. Only with the efforts of both the private sector and public authorities it can be possible to achieve positive results.

- What should pharmaceuticals do to fight against counterfeiting of medicines? 

In our opinion, the action plan development of the pretrial investigation in cases on counterfeiting of medicines for the law enforcement officers should be a number one priority.

Legal Alliance Company in co-authorship with the Prosecutor General's Office of Ukraine developed the first part of the methodical guidelines entitled "Medicines: Anti-counterfeiting in Ukraine /action plan/" (hereinafter referred to as the Methodical guidelines).

This issue covers the criteria for detecting counterfeit medicines; the widespread illegal trafficking channels of counterfeit medicines; action plan for reporting offences under Articles 321-1, 305 and 229 of the Criminal Code of Ukraine; samples of the necessary documents.

The action plan for the reporting of crimes regarding counterfeit medicines requires a special attention. In particular, there is information about the proper public agencies of the pretrial investigation, necessary evidence and all the important nuances in Methodical guidelines.

Nevertheless, it is important to point out that the first part of the Methodical guidelines is developed solely for the pharmaceutical companies. However, Legal Alliance Company is developing the second part, which will include the algorithm of the investigation, especially in questions regarding the investigative detection actions concerning counterfeit medicines.

The extensive discussion of the action plan for both injured persons and the law enforcement agencies will take place on January 20, 2022 at 10.00 upon the initiative of the European Business Association (EBA) Health Care Committee and Legal Alliance Company.