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Keeping it real – new anti-counterfeiting directive for the pharmaceutical industry

PRACTICE AREA GROUP: Healthcare
DATE: 14.07.2011

New legislation is due to come before the European Parliament next month which seeks to amend Directive 2001/83/EC on the Community Code relating to medicinal products for human use. The new directive may introduce a number of far-reaching changes and could have a significant impact on the intra-group activities of pharmaceutical companies.

The Proposed Falsified Medicines Directive (the “Proposed Directive”) forms part of three proposals introduced in the European Commission’s update of the "Pharmaceutical Package" adopted in December 2008. It seeks to ensure a harmonised European response to deal with pharmaceutical crime and the severe threat it poses to public health.  

Whilst in the past, counterfeit medicines have predominantly been found on illegal markets, increased sophistication in the ability of counterfeiters, as well as increased complexity in the distribution systems of pharmaceutical products, means that the integrity of legal chains is now under threat. The Proposed Directive aims to counteract this growing problem by protecting the legal distribution chain from the infiltration of counterfeit medicines and reassure customer confidence in respect the medicinal products they purchase.

Obligatory harmonised pan-European safety features

One of the key aspects of the Proposed Directive is the proposed application of obligatory, harmonised safety features that make it possible to identify, authenticate and trace medicinal products. The Proposed Directive contemplates a risk-based approach. The implementation of safety features would be prioritised according to the threat a medicinal product presents to patients or other users’ health and safety. It also contemplates pharmacists and wholesale distributors being able to verify the authenticity of medicinal products by, amongst other things, assessing these mandatory safety features.

The precise safety features remain to be determined and if the Proposed Directive is adopted, the Commission will begin a procedure of consultation with committees of representatives of the Member States as regards the implementing measures and the precise safety features to be required.

Intra-group activities / Exports

The Proposed Directive is to apply to entities who are involved in transactions without actually handling the products (for example entities involved in auctioning or brokering products).  This has potential ramifications for group structures where certain legal entities in the supply chain do not necessarily take physical possession of the product. If the Proposed Directive is adopted, these entities could be regulated under EU Pharmaceutical law to the extent that they are regarded as being involved in the “trading of medicinal products”.

The Proposed Directive also proposes to clarify the scope of the EU regulatory regime in terms of its application to the wholesale distribution of products that are exported and not placed on the EU market.

If the Proposed Directive is adopted, all entities involved in a supply chain (including those which, to date, were not regulated) will need to look at their current systems at the appropriate time, in order to consider whether any changes are required in the context of these additional obligations.

Time Frame for Implementation

The Proposed Directive is due to go before the European Parliament shortly.  We will continue to keep you apprised of developments in this area during the remainder of the year. 

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