3.5 Traceability and illicit trade in medical products in Africa

Box 3.5 Traceability and illicit trade in medical products in Africa

Illicit health products plagued many low- and middle-income countries before the COVID-19 pandemic, and challenges with supply chain integrity and transparency during the crisis made matters worse. The simple fact that no single country in all of Sub-Saharan Africa has a functioning traceability system may have cost many non-COVID-19 deaths indirectly attributable to the pandemic (Heuschen et al. 2021).

The World Bank–hosted Global Steering Committee (GSC) for Quality Assurance launched broad-based public and private collaboration to help countries initiate global standards for medicines traceability. The onset of the pandemic heightened the focus and created new momentum around protecting the COVID-19 vaccines from theft and falsification through the rapid development of a verification system. Simple product barcoding and smartphone scanning apps offered a practical tool for the near term. This initial building block, while far short of the traceability goals embraced by some 25 African countries as part of the “Lagos Call to Action,” raised critical awareness and galvanized support within the COVID-19 Vaccines Global Access (COVAX) Facility.a

For many African countries, the pandemic exposed weaknesses in the international trading system for health commodities. Without manufacturing capacity for essential medicines, let alone for COVID-19–related health products, poorer countries could only wait. Even as South Africa and others begin to fend for themselves with new vaccine manufacturing capacity, the basic structures that will ultimately determine the survivability of the infant pharmaceutical industry require parallel development efforts. Namely, medicines regulatory harmonization must advance across the dozens of small markets that make up Africa’s regional economic communities. Harmonized regulations and processes will support an overall recognition that raising the regulatory standard, while difficult and incremental, will enhance trade competitiveness and help Africa better serve its own billion consumer market.

Shared national approaches to health product traceability are part and parcel of the access to safe and effective medicines imperative for lower-income regions like Africa. Already, every medicine manufactured in India bears a global standard–compliant two-dimensional barcode that contains critical data about the product. As those products cross borders and land in regions like Europe, that electronic data moves with the product and offers enhanced supply chain integrity and visibility. But when that product moves across borders and into a region like Africa, the lights go out—there is no attempt to follow the data. As a consequence, pharmaceutical manufacturers within Africa cannot hope to compete globally, nor can they provide quality assurance for their products to the potential customers in their neighboring country. Legitimate health products imported into the region suffer the same fate. They enter opaque and highly fractured supply chains that lack traceability and therefore cannot guarantee the integrity of the health care products.

Fortunately, African regulatory leaders are embracing the health product traceability challenge. Nigeria, Africa’s largest consumer market, is not only helping to lead COVID-19 vaccine verification efforts but is also fully committed to the value of a national medicines traceability system through the National Agency for Food and Drug Administration and Control (NAFDAC).

When it comes to quality health product access, there are few more tangible or more practical steps that lower-income regions like Africa could take than to advance common regulatory policies, including medicines traceability. Predictable, transparent, and stringent regulatory oversight promotes efficient trade in health commodities. Knowing where a product was manufactured, which supply route it traveled, and how it came to the patient will save lives. The COVID-19 pandemic did not create this lesson but it certainly reinforced it.

a. The COVAX Facility is a global risk-sharing mechanism for pooled procurement and equitable distribution of COVID-19 vaccines, co-led by the Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI), the World Health Organization (WHO), and the United Nations Children’s Fund (UNICEF).

WTO response to the pandemic Based on the demand from WTO members and the need to channel all various and useful efforts on the WTO response to the pandemic, on June 22, 2021, a facilitator-led, horizontal, and multilateral process was set up under the auspices of the WTO’s General Council to streamline and organize work in this area and ensure transparency and inclusiveness.

At the time of writing, work on this outcome—possibly consisting of three parts— was being prepared in the lead-up to the 12th WTO Ministerial Conference: 1. The first part would be a factual reflection of WTO members’ trade-related responses and the WTO Secretariat’s contributions during the pandemic. 2. The second part would reaffirm relevant WTO obligations in various areas. In this regard, delegations noted the importance of having provisions on transparency, trade facilitation, and export restrictions as well as economic recovery, food security, services, regulatory coherence, and technology transfer, among others. Several noted the importance of ensuring resilience and pandemic preparedness and addressing supply-chain bottlenecks and transportation costs. Other suggestions include having a TRIPS and non-IP trigger mechanism, providing policy space, and preserving existing flexibilities. The precise elements and the various proposed paragraphs are currently being negotiated. 3. The third part would involve forward-looking provisions on what the WTO could do to take up matters related to pandemic preparedness and resilience— taking into account lessons learned from the current pandemic and the WTO response.

Policies affecting medical services trade Trade in services and international trade agreements can ensure a response to health demand while also supporting public objectives such as health security. Given the specific nature of medical services, trade-related considerations have not taken center stage in national and international policy making. Health authorities are concerned with the quality of the services provided and equity in access to essential services domestically. Trade in medical services could support the fulfillment of public policy objectives (whether under the auspices of GATS, regionally, bilaterally, or unilaterally) while not constraining the right of governments to regulate.

In general, services trade rules, as in GATS, do not cover government services.33 This would mean, for example, that health services provided for a nominal price by medical service suppliers that are not actively trying to attract customers (patients) are not disciplined by these agreements. Trade agreements also offer many flexibilities for governments to tailor what they are willing to open to foreign competition, and how, based on their public policy objectives—for example, by maintaining market access limitations or discriminatory practices deemed necessary to achieve public health policy objectives.