Recently, China IP noticed that drugs had been copycatted when buying Golden-Throat lozenges in a supermarket. The Notice on Further Regulating the Business Conduct of Drug Retailing Units (hereinafter referred to as the Notice) enacted by the related state department last year has not prohibited such activities; instead copycatting has become very popular all over the country, and has spread like wildfire.

Early in 2009, the State Food and Drug Administration issued the Notice, providing that drugstores must not sell non-pharmaceutical products whose packages or names are similar or the same to those of pharmaceuticals.

Copycatting drugs refer to the marginal products that imitate medicine. These products, even without inspection certificates, product name, manufacturer and address, have been advertised and sold as medicine, or using a similar package/name to mislead consumers. According to the related regulations, healthcare products whose packages/names are similar to those of pharmaceuticals cannot receive administrative access to the market.

Wang Dahong, the secretary general of the Working Committee of Health Products Market under the China Health Care Association, once stated that, the batch number such as “健用字號(Jianzi number)” is only permitted in local government, and it can easily stride over the threshold for market assess. Then the national medicine administration departments shall never approve this batch number. Due to the strict approval process and GMP certification, some manufactures begin to hit “curve balls” to cover the healthcare products, cosmetics, sterilization products and even general food with the “drug” mantle, and advertise such “copycatting drugs” involved in the publicizing of curative properties with directly labeling the drug ingredients, functions, indications, dosage and administration.

The Innocent Consumers

“Although they are made by different producers, the curative effects are the same, and this one is cheaper,” the sales representatives often give such explanations when showing the “copycatting drugs” to the consumer.

Regardless of the number of “copycatting drugs” on the market, special attention should be paid to regulating the medicine market, for it is a matter of life and death. This reporter learned that, “copycatting drugs” sold in drugstores are common, such as, “婦科千金膠囊”, (Fuke Qianjin Soft Capsule), “慢嚴舒檸”(Manyan Shuning), whose packages are confused with genuine medicines that received the Qualifies for Health-tax Credit.

There are some differences between “copycatting drugs” and genuine medicines. First, the batch number form of genuine medicines is “國藥準（試）字+1個字母+8位數字” (State Medical Permit No.+ One Letter + Eight Figures),while that of copycatting drugs is “國食健字+數字” or “某省的簡稱+衛健用字+數字” (“National Healthy Food Index Number + Figures” or “ Provincial Healthy Food Index Number+ Figures”). Second, the packages of “copycatting drugs” are always similar to the well-known medicines’, and the names of “copycatting drugs” are only different with that of genuine medicines’ in terms of pronunciation and spelling, which can easily cause confusion. Third, the prices of “copycatting drugs” often are cheaper than that of genuine medicines’. Only after careful inspection can consumers distinguish these differences. Moreover, most personnel at drugstores attempt to recommend “copycatting drugs” to consumers.

According to the principle of “department in charge of approving should take charge of regulating, ” Departments of Drugs Supervision would only deal with the drugs with qualifies for health-tax credit rather than the “copycatting drugs” covered under the health-care or sterilization product mantle. The approval numbers of “copycatting drugs” passed off as nondrug are always counterfeit; therefore, sanitation departments supervising health-care or sterilization products might shake off their administrative responsibilities by saying, “no approval, no supervision.” All provide illegal enterprises the opportunity to produce “copycatting drugs” for illegal profits.

The Helpless Medicine Enterprises

“Copycatting drugs” pose a potential threat to the lives of consumers. However, apart from paying more attention when buying medicines, there is no effective way to prevent such illegal frauds. For pharmaceutical enterprises, seeking legal protection seems not to work well.

A representative from a pharmaceutical company, who declined to be named, expressed great concern for the current prevailing situation of “copycatting drugs;” “We have found many kinds of medicine products which are passed off as our company’s products and taken great steps to crack down, often with little success. It is too difficult for the medicine enterprises to crack down on ‘copycatting drugs,’ because some factory sites and telephones printed on the package do not exist in fact. We also have tried hard to exhort the drugstores not to sell ‘copycatting drugs,’ but some of drugstores did not take the exhortation at all. Meanwhile, we cannot fall foul of the drugstores, because we have to rely on them to sell our products.”

Each step in terms of a genuine drug approval, research, and storage must adhere to strict standards of examination. Only after being researched and tested, can a medicine be reported to the State Food and Drug Administration (SFDA) for an approval number. Relative to the manufacturing and sales of medicines, they are required to pass the authentication of Good Manufacturing Practice (GMP) and Good Supply Practice (GSP) carried out by SFDA. The money spent in these areas account for a large part of the total drug cost, while that of the “copycatting drugs” is virtually nothing. Therefore, “copycatting drugs” have great price advantage over the genuine medicines since they can be sold in bulk to the drugstores at a bargain price. Though the selling price of “copycatting drugs” fixed by drugstores is only few Yuan less than that of genuine medicines, they can acquire high yields. It is for this reason that some drugstores are more pleased to persuade consumers to buy “copycatting drugs.”

As far as the pharmaceutical enterprises are concerned, it is also impractical to crackdown on counterfeit medicines because consumers would falsely assume that there are too many fake medicines of this kind in the market, which would directly result in a decrease of sales volume. In consideration, most medicine enterprises would rather keep silent to avoid trouble.

Who on Earth should Take Charge of Regulating the Medicine Market

Who should take charge of regulating the medicine market? In what way can medicine enterprises maintain their rights and interests? Whom can the consumers turn to for help? None of us should neglect such questions. According to an officer of the State Food and Drug Administration, “the ‘copycatting drugs’ in the market actually are food or health-care products with the certificates of compliance rather than fake medicines, so there is no reason for us to investigate and punish them. Moreover, there is no explicit regulation prohibiting this kind of product from being sold in drugstores. Additionally, some “copycatting drugs,” are only just free riding the best-known brands on the aspect of package and are qualified and approved by the relevant departments. On account of these facts, sometimes we have no way to take effective measures to regulate the medicine market.”

In accordance with the State Administration of Industry and Commerce, at present, it is not easy to identify the infringement act on the similarity of trademark or package because of the different opinions, which throws investigations of government departments into dilemmas. However, if the companies find their products are “copycatted”, they can bring forward evidence to the appropriate departments of industry and commerce by which investigations and punishments will be meted out.

By the principle of “the burden of proof lies upon him who affirms” on the handling of trademark infringement cases, the person who takes on the burden on the proof must be the trademark right holder, and he should provide the application and proof materials, including evidence of being a well-known trademark from the aspect of advertising quantity, market share and product sales. Besides, the trademark right holder has to provide the evidence that it is he who first put to use the package or decoration in accordance to the principle of “first come, first serve.”

As a result, insiders have appealed to relevant departments for further revision and perfection of the Drug Administration Law. For example, regulating the management of drugstores, setting down trade standards for non-drug products as soon as possible, explicitly defining the concept and classification standard of products, raising the threshold of examination and approval access, and the further perfecting and detailing of the relevant law system to provide legal guarantees for the rectification of violations.