USTR flags PH anew on fake medicines

Published May 1, 2021, 1:24 PM

by Bernie Cahiles-Magkilat

The Philippines was flagged again by the US Trade Representative (USTR) as among the leading sources of counterfeit medicines distributed globally during the pandemic year, but was cited as model in fighting illegal camcording, enabling the country to stay out for the 8th year from the annual list of intellectual property rights violators.

In its 2021 Special 301 Report, which lists countries that violate intellectual property rights protection and enforcement, the USTR praised the Philippines for being able to adopt laws that prevented unauthorized camcording.

“The United States urges countries to adopt laws and enforcement practices designed to prevent unauthorized camcording, such as laws that have been adopted in Canada, Japan, and the Philippines,” the report said. It identified Argentina, Brazil, Ecuador, India, Peru, and Russia for not effectively criminalizing unauthorized camcording in theaters, although Peru has submitted draft legislation to address the issue.


Concerns on counterfeit medicines were spotlighted with USTR noting that the review period for the latest report has taken place during the COVID-19 pandemic, the largest global health crisis in more than a century. The USTR said that top priority of the United States during this pandemic is saving lives and ending the pandemic in the United States and around the world. The USTR raised this issue against the Philippines two years ago.

The report cited a study by Organization for Economic Co-operation and Development  and European Union Intellectual Property Office that found China, India, the Philippines, Vietnam, Indonesia, and Pakistan are the leading sources of counterfeit medicines distributed globally. It also said that the past year, countries reported significant quantities of COVID-19 testing kits, personal protective equipment (PPE) such as N95 and equivalent masks, and sanitizers, detergents, and disinfectants from China that were determined to be counterfeit. 

According to the USTR, US brands are the most popular targets for counterfeiters, and counterfeit US-brand medicines account for 38 percent of global counterfeit medicine seizures.While it may not be possible to determine an exact figure, the World Health Organization (WHO) estimated that substandard or falsified medical products comprise 10 percent of total medical products in low- and middle-income countries. 

Furthermore, the increasing popularity of online pharmacies has aided the distribution of counterfeit medicines. A 2020 study by Pennsylvania State University found that illicit online pharmacies, which provide access to prescription drugs, controlled substances, and substandard or counterfeit drugs, represent between 67 percent to 75 percent of web-based drug merchants. 

The US Government, through the United States Agency for International Development and other federal agencies, supports programs in sub-Saharan Africa, Asia, and elsewhere that assist trading partners in protecting the public against counterfeit and substandard medicines in their markets. Counterfeiters increasingly use legitimate express mail, international courier, and postal services to ship counterfeit goods in small consignments rather than ocean-going cargo, the report added.

The report said “The manufacture and distribution of pharmaceutical products and active pharmaceutical ingredients bearing counterfeit trademarks is a growing problem that has important consequences for consumer health and safety and is exacerbated by the rapid growth of illegitimate online sales. Counterfeiting contributes to the proliferation of substandard, unsafe medicines that do not conform to established quality standards. The United States is particularly concerned with the proliferation of counterfeit pharmaceuticals that are manufactured, sold, and distributed in numerous trading partners.”

The majority, by value, of all counterfeit pharmaceuticals seized at the US border in Fiscal Year 2020 was shipped from or transshipped through China, Hong Kong, India, Canada, and the Dominican Republic, the report added.

The USTR also raised concerns on GI (geographical indication), and slow processing on cancellation proceedings of bad faith trademarks.

On GI, the report noted that the EU has pursued its GI agenda in multilateral and plurilateral bodies as well.

The World Intellectual Property Organization defines GI as a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. In addition, the qualities, characteristics or reputation of the product should be essentially due to the place of origin.

In addition to these negotiations, the US is engaging bilaterally to address concerns resulting from the GI provisions in existing EU trade agreements, agreements under negotiation, and other initiatives, including with Argentina, Australia, Brazil, Canada, Chile, China, Ecuador, Indonesia, Japan, Kenya, Korea, Mexico, Morocco, New Zealand, Paraguay, the Philippines, Singapore, Tunisia, Ukraine, Uruguay, and Vietnam, among others.

The US goals in this regard include ensuring that the grant of GI protection does not violate prior rights of US companies with trademark that includes a place name. As such, the US opposes efforts to extend the protection given to GIs for wines and spirits to other products.

In addition, the Philippines was also among countries being flagged in the report for slow opposition or cancellation proceedings in trademark registration.

The report said that many other countries, including India, Malaysia, and the Philippines, reportedly have slow opposition or cancellation proceedings of bad faith trademarks, while Panama and Russia have no administrative opposition proceedings.

Failure to employ relative examination places the onus on trademark holders, including MSMEs, to bring and litigate costly invalidation proceedings to protect their IP, and it risks the contemporaneous registration of multiple conflicting marks in a jurisdiction.

For this year’s Special 301 Report, the Special subcommittee received stakeholder input on more than 100 trading partners, but focused its review on those submissions that responded to the request set forth in the notice published in the Federal Register to identify whether a particular trading partner should be named as a Priority Foreign Country, placed on the Priority Watch List or Watch List, or not listed in the Report. Following extensive research and analysis, USTR has identified 32 trading partners in the Priority Watch List and Watch List.