Faking it: can QR codes combat counterfeit medicines?

On December 28 2017 President Putin signed the Law on Amendments to the Law on Circulation of Medicines (Federal Law 425 FZ). The primary goal of the new law is to eliminate the illegal trafficking of medicines in Russia – including counterfeit, falsified and inferior medicines – by introducing mandatory identification marks on medicine packaging and a track and trace system for all medicines in circulation.

The new law sets out that all packaging for medicines other than those imported for the purpose of conducting clinical trials or intended for export must be labelled with quick response (QR) codes, which are essentially two-dimensional identification marks that encode information about a particular medicine (eg, its manufacturer and expiration date). The government will determine each mark's technical requirements and encoded information. Based on publicly available information, consumers can check the legality of a particular medicine using a smartphone application or a QR code reader in a pharmacy.

In addition to the package labelling requirement, the new law obliges manufacturers, distributors, pharmacies and hospitals to ensure that medicine information is entered into the state information system. Market participants and regulators may use this information to track the circulation of medicines at every stage in the supply chain, especially for the medicines supplied under state contracts. Medicine manufacturers will have free access to information about batches and many of their products circulating in Russia.

While the labelling of all medicine packaging in Russia was originally scheduled to be introduced by January 1 2019, the deadline was extended to January 1 2020 in order to give pharmaceutical companies and pharmacies more time to comply with the new law.

On February 1 2017 the government initiated a trial run for voluntary medicine packaging labelling. As of November 2017, 252 companies had filed applications to register their medicines in the system and over 960,000 packages had been labelled. The responsible ministries will report the results of the experiment before the government on February 1 2018. During the trial, while some manufacturers and pharmacies complained about the additional expenses surrounding the purchase of labelling and scanning equipment, others praised the track and trace system for its anti-counterfeiting and business process optimisation potential.

According to an associated draft law, which is still pending in Parliament, non-compliance with the new law will entail administrative liability. Under the draft law, system entries that are untimely or contain inaccurate information will incur a fine of up to Rb10,000 (approximately $175) for public officials and up to Rb100,000 (approximately $1,750) for legal entities.

The government has additional industries in its sights – while labelling furs has been mandatory since August 2016, there are now plans to introduce labels for tobacco products, clothing and bed linen. As a member of the Eurasian Economic Union (EAEU), Russia has endeavoured to harmonise the labelling requirement at the international level by ratifying the Draft Agreement on Labelling Goods with the Means of Identification in the EAEU. Other EAEU members are expected to ratify the agreement soon.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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