AmCham arrow Publications arrow Topics Archive arrow Topics Archive 2005 arrow Vol.35- No.9 arrow Issues: Holding Pharmacists Responsible
Issues: Holding Pharmacists Responsible PDF Print E-mail

Even if judges give out light sentences, strict administrative penalties could be used to create a deterrent effect in cases of fake-drug distribution.

BY DON SHAPIRO

 

A joint meeting of the Pharmaceutical and Intellectual Property & Licensing Committees last month provided a thorough overview of the acute problem posed by counterfeit drugs in Taiwan. Detailed presentations were made by section chief Mary Tai of the Department of Health's Bureau of Pharmaceutical Affairs (BOPA) and by Carol Cheng, COO of the International Research-based Pharmaceutical Manufacturers Association. But what set this session apart from the average committee meeting was the unusually spirited discussion that followed the presentations - with several solid suggestions on possible ways of improving enforcement of anti-counterfeiting laws and regulations.

Among the chronic frustrations in these cases has been the reluctance or of Taiwan's courts to mete out stringent sentences, letting convicted offenders off with modest fines or suspended sentences. While both speakers emphasized the importance of continuing to try to educate the judiciary about the risk to public health posed by fake drugs, the discussion period focused mainly on the idea of taking a different tack - coming down hard with administrative punishments on any pharmacists caught dealing in counterfeit products. Currently, under law, responsibility for revoking the licenses of errant pharmacists has been given over to the professional associations, which rarely take any drastic action against their own members.

Mary Tai reported that BOPA will consider proposing a legislative amendment returning that authority to the DOH. In the meantime, she said, BOPA already has the power to suspend pharmacists' licenses for up to three years - a potentially powerful tool against lawbreakers that has not been much utilized until now. She noted that some two dozen cases of pharmacists charged with selling counterfeit goods are currently in the judicial system. If they receive convictions - regardless of the severity of the sentence - BOPA would have reason to suspend their licenses. The resulting impact on the offender's ability to earn a livelihood could have an even stronger deterrent effect than harsh fines on would-be infringers of anti-counterfeiting laws.

BOPA also disclosed that it is obtaining guidance from the Ministry of Justice Investigation Bureau to improve the way evidence is collected and presented, enabling prosecutors to make a stronger case against violators. That would reduce the likelihood of judges' being able to cite weak evidence as the reason for giving out light sentences.

It was also suggested that the pharmaceutical industry campaign to back DOH's request that the National Police Agency (NPA) declare drug counterfeiting to be a "major crime." Since police receive more recognition for cracking such crimes, such a designation would give law-enforcement officers the incentive to pay added attention to the manufacture and sale of illegitimate pharmaceuticals. So far the Ministry of Interior, which oversees the NPA, has rejected that request on the grounds that counterfeiting is not a violent crime, ignoring the critical health risk it entails when medications are involved.

- By Don Shapiro



Who Will Speak for Technology?

A proposal to downgrade the functions of the National Science Council is meeting opposition from industry representatives and major universities.

Given the broad recognition that industrial innovation will be the keystone to Taiwan's future economic success, the government has been emphasizing the need for increased investment in research and development, both in the public and private sectors. Yet at the same time as that push to make R&D a national priority, the government reorganization plan that the Executive Yuan has presented to the legislature threatens to have the contradictory effect of weakening the voice of science and technology at the higher rungs of government. Under the plan, the National Science Council (NSC) would be folded into a new entity - together with the Council for Economic Planning and Development (CEPD) and the Research, Development, and Evaluation Commission (RDEC), which is responsible for R&D and evaluation relating to government programs. Actual authority for science and technology development would wind up being downgraded to the departmental level.

The overall objective of the reorganization effort - streamlining government and making it more efficient - is laudable. But the process of cutting the number of ministries and councils from the current 35 to the target of 22 inevitably involves some difficult political decisions. The notion of merging several existing councils into one organization for minority affairs, for example, brought vehement opposition from Hakkas and aborigines. A triple play of merging the NSC, CEPD, and RDEC must seem like a tempting solution. Proponents of the move are also making the argument that countries like the United States, Canada, and Britain have gotten along quite well without a cabinet-level authority dedicated to science and technology.

The response from industry (so far expressed mainly through the Taipei Computer Association) and from university presidents, however, is that the reorganization proposal would represent a step backward for Taiwan's technological prospects. Rather than look to the United States and a few other highly developed countries as models, they argue, Taiwan should be emulating the many countries that maintain high-level governmental councils - or even full-fledged ministries - to promote science and technology. South Korea, for example, has both a Ministry of Science and Technology and a policy-setting National Science and Technology Council chaired by the president. Industry hopes that when the bill is taken up by the Legislative Yuan, lawmakers will revise the proposal to elevate the responsible agency, as the government reform committee originally recommended some four years ago, rather then downgrade it. As a ministry, aside from having more influence and probably more budget, it would be able to broaden the current mandate of the National Science Council, which primarily is involved with academic research. High-tech companies would like to see more attention to encouraging private-sector R&D, and particularly for strengthening the research links between industry and academia.

- By Don Shapiro



Fulfilling the FTSE Guidelines

The Taiwan Stock Exchange has liberalized various trading rules affecting foreign investors in recent months in an effort to gain "Developed Market" status.

Taiwan will have to wait another year for possible upgrading by the London-based FTSE Group, the leading provider of investment indices, from its current "Advanced Emerging Market" status to that of "Developed Market." Although Taiwan and South Korea were both commended by the FTSE Equity Committee for "their tremendous enthusiasm in encouraging change in their markets and for seeking an active dialog with investors worldwide," the Committee announced this month that both countries still fell short of qualifying for upgrading after a year on the "watch list."

In Taiwan's case, the Committee "concluded that Taiwan has not yet made sufficient progress in ensuring a free and well-developed foreign exchange market, simplifying its registration process for foreign investors, and further improving the process for off-exchange transactions."

Over the past year, with the goal of meeting FTSE's guidelines in mind, the Taiwan Stock Exchange and the Financial Supervisory Commission (FSC), the government regulator, had introduced a number of reforms aimed at bringing Taiwan's trading conditions and procedures in line with advanced international practice. Despite the failure to win full approval on this round, those revisions have gone a long way in creating a more hospitable environment for international institutional investors. Among the changes:

* Lifting restrictions on securities borrowing and lending. The previous stipulation that such transactions must be shown to have a "strategic purpose" was removed, as was the requirement for on-shore collateral when both the borrower and lender are foreign investors. In addition, rules were implemented to permit short selling.

* Granting more flexibility to foreign investors in settlement deadlines to eliminate the inconvenience of "pre-funding." Under stated circumstances (including holiday schedules, time differences, transmission delays, disputes on the terms of trade, and acts of God), the foreign investors may now take until the end of the third business day following the transaction to complete the settlement.

* Permitting foreign investors to open multiple depository accounts, as long as each account bears the same investor-registration number, and to transfer assets freely between such accounts without having to go through a buy-sell process.

* Adopting measures to allow foreign investors to purchase odd-lot shares. Previously they were permitted to sell but not to buy such shares.

* Introducing a more streamlined block trading system, ending a number of onerous requirements in the previous system. For example, brokers had been required to deliver funds or securities to the exchange in person before placing the order.

Besides the prestige factor, elevation to Developed Market status would be expected to draw increased portfolio investment into Taiwan from foreign financial institutions, particularly from pension funds and insurance companies that are under restrictions regarding investment in emerging markets. With the next FTSE Equity Committee country review scheduled to take place in September 2006, Taiwan now has a year to complete the reform process and prove it deserves the designation of "developed."

- By Don Shapiro
 
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