US Outlines Plan for IP Protection and Securing the Pharmaceutical Supply Chain

US Intellectual Property Enforcement Coordinator (IPEC) Victoria Espinel issued last month the 2010 Joint Strategic Plan on Intellectual Property Enforcement. The plan, which was authorized by the Prioritizing Resources and Organization for Intellectual Property Act (PRO-IP Act), sets out a strategy against counterfeiting and intellectual property (IP) infringement. The plan includes several measures specific to the pharmaceutical industry such as the establishment of a Counterfeit Pharmaceutical Intragency Committee, and several initiatives to secure the pharmaceutical supply chain, including a recommendation to mandate the use of an electronic track-and-trace system for pharmaceuticals and medical products.

“While intellectual property infringement threatens the ideas and innovations that are the lifeblood of pharmaceutical companies, and in turn our industry’s important stake in the US economy, it also presents a very real public health and safety danger to patients worldwide,” said Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Billy Tauzin in a June 22, 2010 PhRMA release. “Among other things we applaud the Plan’s establishment of a Counterfeit Pharmaceutical Interagency Committee, its focus on robust enforcement of IP rights worldwide, and its goal of advancing US advocacy on IP issues in multiple international forums.”

The plan
The plan identifies 33 enforcement strategy actions in six categories of focus for the US: leading by example; increasing transparency; ensuring efficiency and coordination; enforcing US rights internationally; securing the supply chain; and building a data-driven government. Highlights of the key measures in each of these categories are outlined below.

Leading by example. Under the plan, the US government will establish a government-wide working group tasked with studying how to reduce the risk of the procurement of counterfeit parts by the US government. IPEC will convene this working group, which will include members of the National Security Council, Department of Defense, General Services Administration, the Small Business Administration, the Department of Homeland Security (DHS), and other participants as defined by IPEC.

Increasing transparency. The US government will support transparency in developing IP enforcement policy, information-sharing with federal agencies, and reporting of enforcement activities domestically and abroad. These efforts will include sharing samples of circumvention devices, authorization to DHS to share information and samples of goods and circumvention devices, and improved mechanisms for reporting IP crime.

Of potential importance to the pharmaceutical industry, the plan also outlines a process for the US Trade Representative’s (USTR) publication of its Notorious Markets list, a compilation of examples on Internet and physical markets (including foreign countries) that have been the subject of enforcement action or that may merit further investigation for possible IP infringement. USTR, in conjunction with IPEC, will initiate an interagency process to evaluate additional ways to publicize and expand on the list to increase public awareness and guide related trade-enforcement actions.

The plan also specifies that the International Trade Commission (ITC) can make a determination of infringement, and issue an exclusion order to US Customs and Border Protection (CBP), which bars the importation of infringing goods. ITC and CBP will explore additional ways to facilitate and encourage transparency between the two organizations.

Ensuring efficiency and coordination. The US government will further strengthen the coordination of law-enforcement efforts on the federal, state, and local levels, of personnel stationed overseas, and international training and capacity-building efforts. Of particular importance to the pharmaceutical industry are ways to build the effectiveness of personnel stationed oversees to combat IP infringement. The plan outlines six major steps in this area: prioritizing the stationing of personnel involved in IP issues in particular countries or regions: prioritizing the stationing of additional law-enforcement personnel; developing IP enforcement work plans for each country; establishing or enhancing working groups within embassies to implement those plans; improving coordination between US-based and foreign-country personnel; and introducing and implementing procedures to measure the effectiveness of personnel.

Coordination of international capacity building and training. IPEC also plans to establish and chair an interagency committee on the counterfeiting of pharmaceutical drugs and products. The committee will consist of several federal agencies, including the Office of National Drug Control Policy, the National Institutes of Health, the Department of Commerce, the State Department, the US Agency of International Development, the Department of the Health and Human Services, the US Food and Drug Administration, the Drug Enforcement Administration, and the Federal Bureau of Investigation. The committee will examine the problems associated with unlicensed Internet pharmacies, health and safety risks in the US associated with the distribution of counterfeits, and the proliferation of counterfeit pharmacies in Africa. The committee will be responsible for producing a report with specific recommendations for government action within 120 days after its first meeting.

Enforcing rights internationally. Some projects to improve IP enforcement internationally include better monitoring and oversight of foreign-based and foreign-controlled websites and web services that infringe US IP rights. The US government will increase its IP enforcement with foreign countries, including the use of formal cooperative agreements with foreign countries to strengthen cross-border IP enforcement efforts. The US government also plans to strengthen its participation on IP enforcement with international organizations such as the World Trade Organization, the Organization for Economic Co-operation and Development, the Asia-Pacific Economic Cooperation, and the World Health Organization.

Securing the supply chain. The plan details several measures to improve cooperation between the US government and the private sector in securing the pharmaceutical supply chain. One measure would require manufacturers and importers to notify FDA of any known counterfeit of any pharmaceutical or medical product. Drug manufacturers would also be required to provide FDA with a list and complete description of any legitimate drug products that are currently distributed in the stream of US commerce on a twice-annual basis.

The IP strategic plan also calls for The Food, Drug and Cosmetic Act to be modified to require manufacturers, wholesalers, and dispensers to implement a track-and-trace system, which allows for the authentication of the product and creation of an electronic pedigree for medical products using unique identifiers for the product. The goal is to make it more difficult for counterfeiters to forge products, better identify counterfeiters, and facilitate the recall of counterfeit or adulterated products. Privacy concerns will be considered when deciding where the information will be housed and who will have access to that information.

The strategic plan also calls for better border control for pharmaceuticals. Specifically, the plan recommends increased cooperation among federal agencies, including DHS, HHS, and FDA for enforcement cooperation, coordination, information-sharing, and partnerships for daily operations at US borders for counterfeit pharmaceuticals and medical devices.

The US government will also continue to work with the private sector, including search-engine operators, advertising brokers, and payment processors to explore methods to prohibit paid advertising for online illegal pharmaceutical vendors. The US government will examine ways to fully enforce IP law on online pharmaceutical companies that are violating IP. In its report, IPEC applauded voluntary protocols, adopted by search-engine companies such as Google and Bing, which are designed to prevent the sale of sponsored results for unlawful businesses selling counterfeit medicines online. These protocols use a “white list” of preapproved Internet pharmaceutical sellers that include verification by the National Association of Boards of Pharmacy’s Verified Internet Pharmacy Practice Sites or certifications from the original manufacturers of legitimate and FDA-approved pharmaceuticals.

Building a data-driven government. IPEC has initiated a process, beginning with the fiscal year 2010 budget, for collecting information from federal agencies on the amount of resources they dedicate to human capital and programs, identified metrics to measure IP enforcement successes, and planned and estimated expenditures for future IP-related activities. IPEC will also work with Economic and Statistics Administration and the Department of Commerce to establish a framework for measuring the economic contributions of IP-intensive industries. IPEC will also review existing IP law to determine if further changes should be made to improve IP enforcement and strengthen the penalties for IP infringement.

Finally, the US government will review existing efforts to educate, guide, and provide resources for US exports. The goal of the review is to increase the scope and effectiveness through improved coordination of diplomatic, cooperative, programmatic, and other bilateral mechanisms, in overseas markets, with a particular focus on China. These efforts will seek to support US businesses that are involved in the following: acquiring IP rights in foreign markets; considering exporting IP-based products or choosing markets for export; actively entering foreign markets or facing difficulties entering foreign markets; and encountering difficulties enforcing their IP rights in foreign markets.