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LCQ8: Combating counterfeit pharmaceutical


    Following is a question by the Hon Bernard Chan and a written reply by the Secretary for Health, Welfare and Food, Dr York Chow, in the Legislatvie Council today (June 29):

Question :

    I learnt that the Food and Drug Administration ("FDA") of the United States of America is asking makers and distributors of drugs to adopt the radio frequency identification technology ("RFID") to address the issues of combating counterfeit drugs, establishing a better track record of drugs and facilitating the monitoring of their expiry dates.  In this connection, will the Government inform this Council:

(a) of the measures currently adopted by the authorities to address the above issues; and

(b) whether it will consider adopting RFID to address these issues?

Reply :

Madam President,

    Radiofrequency Identification Technology (RFID) is the latest technology that uses electronic tags on product packaging to keep track of the movement of products mainly for the purpose of combating counterfeit activities.  The technology creates an electronic pedigree, or record of the chain of its custody, from the point of manufacture to the point of sale, which enables wholesalers and retailers to rapidly identify and report suspected counterfeit products.  

    The Food and Drug Administration (FDA) of the USA has recently issued a Compliance Policy Guide for implementing RFID feasibility studies and pilot programmes on pharmaceutical products.   FDA has encouraged pharmaceutical companies to test out RFID technology in accordance with the Guide so as to facilitate the setting of standards for applying the technology.  It is understood that a few major pharmaceutical companies have plans to use RFID technology on selected products that are more susceptible to counterfeiting.  

    Application of RFID in pharmaceutical products is not widely practised around the world, largely because such application is still at an infancy stage.

(a) The Administration accords priority to combating counterfeit pharmaceutical products in Hong Kong.  The Department of Health regulates the sale and supply of pharmaceutical products through a system of registration and inspection prescribed in the Pharmacy and Poisons Ordinance (Cap.138) (PPO).  The Trade Descriptions Ordinance (Cap.362) (TDO) provides for criminal sanctions against the manufacture and trading of all types of counterfeit goods, including pharmaceutical products.  The Customs and Excise Department (C&ED) is the enforcement department for control against counterfeit goods under the TDO.

    For the protection of public health, all pharmaceutical products are required to be registered with the Pharmacy and Poisons Board (PPB), a statutory body established under the PPO, before they can be sold in Hong Kong.  Any person who is guilty of selling unregistered pharmaceutical products shall be liable on conviction to a maximum penalty of a fine of $100,000 and imprisonment for two years.  Drug retail outlets are monitored by pharmacist inspectors of DH who conduct regular and surprise inspection at these premises.  In 2004, a total of 6,485 inspections were conducted.  Apart from inspections, test purchases are also conducted to detect any illegal sale of medicines.  In 2004, DH conducted 3,827 test purchases.  In 2004, there were 112 prosecutions, including those relating to the sale of unregistered drugs.  

    As far as TDO is concerned, it is an offence to import, export, sell or manufacture goods to which a false trade description or forged trade mark is applied.  The maximum penalty is $500,000 and imprisonment for five years on conviction on indictment, and a fine of $100,000 and imprisonment for two years on summary conviction.  C&ED cooperates closely with the pharmaceutical industry to monitor the market situation.  It carries out proactive actions based on intelligence, in addition to acting on complaints made or information provided by members of the public or trade mark owners on suspected cases of counterfeiting activities.  Priority enforcement actions are given to counterfeit pharmaceutical products, as they can be hazardous to health.  

    C&ED also works closely with DH and exchanges information and conducts joint enforcement actions against any retailers selling counterfeit pharmaceutical products.

    To enhance effective enforcement, C&ED also launched a reward scheme in cooperation with the Hong Kong Association of the Pharmaceutical Industry in late 2003.  Monetary rewards are given to members of the public who provide information leading to the successful seizure of counterfeit pharmaceutical products and prosecution of the related offenders.

    In 2004, 15 cases relating to counterfeit pharmaceutical products were prosecuted under the TDO.  A total of 14 cases were convicted and the highest penalty imposed was a fine of HK$10,000.

    As regards the recording of drugs and monitoring their expiry dates, they are effectively governed by the PPB.  For drug recall purposes, the PPO requires manufacturers and wholesalers of all pharmaceutical products to set up and maintain a system of control that will enable the rapid and, so far as practicable, complete recall of any pharmaceutical product from sale to the public in the event of the product being found to be dangerous or injurious to health.  This means in practice manufacturers and wholesalers are required to keep full records of sales of any product to any client.  The PPB also specifies that the expiry dates of drugs have to appear conspicuously on the drug packaging for customers to see.  Compliance of such requirements is monitored through inspections and test purchase conducted by pharmacist inspectors.  Any manufacturer or wholesaler found to have failed any of the above requirements will be liable, on conviction, to a maximum penalty of a fine of $100,000 and 2 years' imprisonment.  Those who are convicted are subject to further sanction by PPB, which may involve suspension of the relevant licence, or its non-renewal upon expiry.  

(b) Control of counterfeit drugs in Hong Kong has been effective.  From operational experience, counterfeit cases in Hong Kong in the past only involved low-level retail activities of a relatively limited scale.  The situation has remained relatively stable and given that the application of RFID technology in pharmaceutical products is at an early stage of development, there is no imminent need to adopt RFID in Hong Kong.  The Administration will however keep a close watch on the development of RFID technology, having regard to the nature of the local pharmaceutical business in Hong Kong.

Ends/Wednesday, June 29, 2005
Issued at HKT 15:18


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