REPUBLICOFTHEPHILIPPINESCONGRESSOFTHEPHILIPPINESMETROMANILA SECONDREGULARSESSION BegunandheldinMetroManila,onMonday,thetwentyseconddayofJuly,nineteenhundred andninetysix [REPUBLICACTNO.8203] ANACTOFPROHIBITINGCOUNTERFEITDRUGS,PROVIDINGPENALTIESFORVIOLATIONS ANDAPPROPRIATINGFUNDSTHEREFOR BeitenactedbytheSenateandHouseofRepresentativesofthePhilippinesinCongress assembled: SECTION1.TitleThisActshallbeknownasthe"SpecialLawonCounterfeitDrugs." SECTION2.

. DeclarationofPolicy ItisherebythepolicyoftheStatetoprotectandpromote the rightto healthof the people and instill health consciousness among them as provided in Section15Article11oftheConstitution. Itis also further declared the policy of the State thatin order tosafeguard the health of the people,theStateshallprovidefortheirprotectionagainstcounterfeitdrugs. SECTION3.DefinitionofTermsForpurposesofthisAct,theterms: (a)Drugsshallrefertoanychemicalcompoundorbiologicalsubstance,otherthanfood, intendedforuseinthetreatment,preventionordiagnosisofdiseaseinmanoranimals, includingbutnotlimitedto: 1(1)anyarticlerecognizedintheofficialUnitedStatesPharmacopoeiaNationalFormulary(USP NF),officialHomeopathicPharmacopoeiaoftheUnitedStates,PhilippinesNationalDrug Formulary,BritishPharmacopoeia,anyNationalCompendiumoranysupplementtoanyofthem; 2(2)anyarticleintendedforuseinthediagnosis,cure,mitigation,treatment,orpreventionof diseaseinmanoranimals; 3(3) anyarticleotherthanfoodintendedtoaffectthestructureoranyfunctionofthebodyof manoranimals; 4(4) anyarticleintendedforuseasacomponentofanyarticlesspecifiedinclauses(1),(2),(3) notincludingdevicesortheircomponents,parts,oraccessories;and 1(5)herbaland/ortraditionaldrugswhicharearticlesofplantoranimaloriginusedinfolk medicinewhichare: 2(a)recognizedinthePhilippineNationalDrugFormulary;(b)intendedforuseinthetreatment orcureormitigationofdiseasesymptoms,injuryorbodydefectinman;(c)otherthanfood, intendedtoaffectthestructureoranyfunctionofthebodyofman;(d)infinishedorreadytouse dosageform;and(e)intendedforuseasacomponentofanyofthearticlesspecifiedinclauses (a),(b),(c)and(d). 3(b)Counterfeitdrug/medicinereferstomedicinalproductswiththecorrectingredientsbutnot intheamountsasprovidedhereunder,wrongingredients,withoutactiveingredients,with sufficientquantityofactiveingredient,whichresultsinthereductionofthedrugssafety, efficacy,quality,strengthorpurity.Itisadrugwhichisdeliberatelyandfraudulentlymislabeled withrespecttoidentityand/orsourceorwithfakepackaging,andcanapplytobothbrandedand genericproducts.Itshallalsoreferto: 1)thedrugitselforthecontainerorlabelingthereoforanypartofsuchdrug, container or labeling bearing without authorization the trademark, trade nameorotheridentificationmarkorimprintoranylikenesstothatwhich isownedorregisteredintheBureauofPatent,TrademarkandTechnology Transfer(BPTTT)inthenameofanothernaturalorjuridicalperson;

2) a drug product refilled in containers by unauthorized persons if the legitimatelabelsormarksareused; 3) an unregistered imported drug product, except drugs brought in the country for personal use as confirmed and justified by accompanying medicalrecords; 4)adrugwhichcontainsnoamountoforadifferentactiveingredientorless thaneightypercent(80%)oftheactiveingredientitpurportstopossessas distinguished from an adulterated drug including reduction or loss or efficacyduetoexpiration. 1(c)Brokering shallrefertoanyactoffacilitatingthedisposalorsaleorcounterfeitdrugs, includingactsofagency. 2(d)Bureau shallrefertotheBureauofFoodandDrugs(BFAD)oftheDepartmentofHealth (DOH). 3(e)DepartmentshallrefertotheDepartmentofHealth 4(f) Businessestablishmentshallrefertoanyentity,whetherasingleproprietorship, partnership,orcorporationengagedinordoingbusinessinthePhilippines. 5(g)Ownershallrefertoapersonorgroupofpersonswhoistheregisteredownerofalicenseto operateabusinessorbusinessundertakinginthePhilippinesorthebranchmanageror operator,licensee,franchisee,oranypersonactingonbehalfofhecorporateentity. 6(h)Residenceshallrefertoaprivatedwellingorabodewhereapersonlives,eitherasowneror lessee,orusurfructuaryincluding,forpurposesofthisAct,itsyard,garage,storageroomsor premises. SECTION4ProhibitedActs.Thefollowingactsaredeclaredunlawfulandthereforeprohibited; a)Themanufacture,sale,orofferingforsale,donation,distribution,trafficking,brokering, exportation,orimportationorpossessionofcounterfeitdrugsasdefinedinSection3 hereofnototherwisecoveredbyRepublicActNo.3720,asamended.Thepresenceor availabilityofsuchcounterfeitdrugswithinthepremisesofanyentityengagedinthe sale, manufacture or distribution of drugs and/or pharmaceutical products or in a privateresidence,orinpublicorprivatevehicle,orinthepremisesnotcoveredbya valid license to operate from the Bureau, shall constitute a prima facie evidence of violationofthisAct:Provided,however,Thatthispresumptionshallnotapplytothe legitimate owners of trademarks, trade names or other identifying marks, or the legitimate or authorized representatives or agents of such owners who have in their possessioncounterfeitdrugswhichbearthetrademarks,tradenamesormarksifthey can show the sales invoices or official receipts evidencing their purchase from a drugstore, manufacturer or distributor suspected by them of dealing in counterfeit drugs involving the trademarks, trade names and other similar identifying marks registered intheir names: Provided, further, That suchcounterfeit products shall be reportedandimmediatelyturnedovertotheBureau:Provided,finally,Thatcompliance withtheprecedingprovisionshallbemadewithinareasonableperiodfromthedateof purchaseofsuchcounterfeitdrugsasindicatedinthesalesinvoice,officialreceipt,or othersimilardocumentsabovementionedtothetimethecounterfeitdrugsarereported andturnedovertotheBureau; b) Possession of any such counterfeit drugs. However, any person found in possession of counterfeitdrugs,inviolationofthissubsection,shallbeexemptedfromliabilityunderthe provisionsofthisActafter: 1) presentation of sales invoices, official receipts or other legally acceptable documents evidencing his purchase thereof from a drugstore, distributor, manufacturer, hospital pharmacyordispensary;oranyotherpersonorplacedulylicensedtoselland/ordispense drugsormedicinesandindicatingthereinthebatchandlotnumbers,aswellastheexpiry datesofsuchdrugs;or

2)presentationofcertificatesandotherdocumentsevidencingtheimportationorexportation ofthecounterfeitdrugsfoundinhispossessionasrequiredbyexistinglaws,including those documents required in the preceding paragraph covering the commercial transactionsinvolvingcounterfeitdrugs. Inbothcases,thesubjectcounterfeitdrugsmustnotontheirfaceappeartobeassuch,or donotbearanymarkingoranypatentlyunusualcharacteristicsufficienttoarousethe suspicion of a reasonable and prudent person that such drugs are counterfeit. Furthermore, the amount or volume of counterfeit drugs held is such that it does not negate or is inconsistent with the averment that the same are for personal use, notwithstandingthepresentationbythepossessorofmedicalrecordsandothersimilar documentsaccompanyingandjustifyingtheuseofsuchdrugs; c)Forging,counterfeiting,simulatingorfalselyrepresenting,orwithoutproperauthority,using anymark,stamp,tag,labelorotheridentificationmarkordeviceauthorizedorrequiredby RepublicActNo.3720,asamended,and/ortheregulationspromulgatedunderthisAct; d) Photocopying, duplicating, altering, printing, transferring, obliterating or removing the approvedlabeloranypartthereof,lawfullybelongingtoanotherperson,forthepurposeof usingsuchlabelorapartthereofonanycounterfeitdrug:Provided,Thatifthepersonwho committedanyoftheactsenumeratedinthisparagraphandthepersonwhousedthelabels produced thereby are not one and the same person and the former had knowledge of the purpose for which the labels are intended, the former shall also be liable under this Act notwithstandingthefailureofthelattertoachievetheintendedpurposes;and e)Making,selling,orconcealinganypunch,dye,plateoranyotherequipmentorinstrument designedtoprint,imprintorreproducethetrademark,tradenameorotheridentifyingmarkof anotherregisteredproduceroranylikenessthereof,uponanydrugproductordeviceorits container or label without authority from the legitimate owners of the trademark or trade name. SECTION5.PartiesLiableThefollowingpersonsshallbeliableforviolation(s)ofthisAct: a)themanufacturer,exporterorimporterofthecounterfeitdrugsandtheiragents:Provided, Thattheagentsshallbeliableonlyuponproofofactualorconstructiveknowledgethat thedrugsarecounterfeit; b)theseller,distributor,trafficker,brokerordonorandtheiragents,uponproofofactualor constructiveknowledgethatthedrugssold,distributed,offeredordonatedarecounterfeit drugs; c)thepossessorofcounterfeitdrugsasprovidedinSection4(b)hereof; d) the manager, operator or lessee of the laboratory or laboratory facilities used in the manufactureofcounterfeitdrugs; e)theowner,proprietor,administratorormanagerofthedrugstore,hospitalpharmacyor dispensary,laboratoryorotheroutletsorpremiseswherethecounterfeitdrugisfound whoinduces,causesorallowsthecommissionofanyacthereinprohibited; f)theregisteredpharmacistoftheoutletwherethecounterfeitdrugissoldorfound,who sells or dispenses such drug to a third party and who has actual or constructive knowledgethatsaiddrugiscounterfeit;and g)shouldtheoffensebecommittedbyajuridicalpersonthepresident,generalmanager,the managingpartner,chiefoperatingofficerorthepersonwhodirectlyinduces,causesor knowinglyallowsthecommissionoftheoffenseshallbepenalized.

SECTION 6. Administrative Proceedings.The Bureau is hereby further authorized to undertakethefollowingadministrativeactions: a) upon verified information on the existence of suspected counterfeit drugs in the possessionofanymanufacturer,sellerordistributor,thedulyauthorizedofficersofthe bureauoranyofficerdeputizedbytheBureauforthepurposeshallsegregate,sealand after having obtained a valid search warrant from a competent court, seize such counterfeit drugs and take them into custody: Provided, That in case the suspected counterfeitdrugsarefoundinaprivateresidence,asdefinedinSection3ofthisActorin otherpremisesnotcoveredbyavalidlicensetooperateissuedbytheBureau,theduly authorizedofficeroftheBureauordeputizedofficerthereofshallsecureasearchwarrant forthepurposeofseizingandtakingintocustodysuchsuspectedcounterfeitdrugs; b)if,aftertheappropriateexaminationofthesamplesbytheBureau,theseizeddrugsare determined or found to be counterfeit, the Bureau shall, within (15) days from their seizure,issueanorderdirectingthepreventiveclosureofthebusinessestablishmentfor aperiodnotexceedingthirty(30)days.Thereafter,administrativeproceedingsshallbe initiated by the Bureau against the parties concerned where they shall have the opportunitytobeheardandpresentevidenceontheirbehalf;and c) toensuretheeffectiveenforcementoftheforegoing,theBureaumayenlisttheassistance ofthenationalorlocallawenforcementagencies. SECTION7.AdministrativeSanctionsUponfindingthatthedrugsexaminedarecounterfeit and the determination of the parties liable thereof, the Bureau shallimpose any or allof the followingsanctions: a) permanent closure of the establishment concerned and the revocation of its license to business; b)afineofnotlessthanOnehundredthousandpesos(P100,000)butnotmorethanFive hundredthousandpesos(P500,000); c)uponorderoftheCourt,forfeiture,confiscation,anddestructionofproductsfoundtobe counterfeitedandtheequipment,instruments,andotherarticlesusedinviolationofthis Act; d) filing of an appropriate proceedings against the registered pharmacist with the ProfessionalRegulationsCommissionforcancellationofprofessionallicense; e)filingofcriminalchargesagainsttheviolator(s),whichcanbeinstitutedindependently fromtheadministrativecase:Provided,Thatthedismissalofthecriminalcaseshallnot liftthe closureorder,exceptwhenitisadismissalonthe meritsorforlackofbasis: Provided,further,Thatthewithdrawaloftheprivatecriminalcomplaintshallnotbea groundforthedismissaloftheadministrativeproceedings;and f) permanent disqualification of the person concerned, whether natural or juridical, from owning or operating an establishment engaged in any business activity under the supervisionoftheBureau. SECTION8.Penalties.ThecommissionofanyoftheactsprohibitedunderSections4and6of thisActshallbepunishedby: a)imprisonmentofnotlessthansix(6)monthsandone(1)day;butnotmorethansix (6)yearsformorepossessionofcounterfeitdrugsasprovidedforinSection4(b)hereof;or b)imprisonmentofsix(6)yearsandone(1)day,butnotmorethanten(10)yearsorafineof notlessthanOnehundredthousandpesos(P100,000)butnotmorethanFivehundred thousandpesos(P500,000)orbothsuchimprisonmentandfineatthediscretionofthe

courtinanyothercasementionedinSection4hereof;or c)imprisonmentofnotlessthansix(6)monthsandone(1)day,butnotmorethantwo (2)yearsandfour(4)monthsifthecounterfeitdrugisintendedforanimals;or d)imprisonmentofnotlessthansix(6)yearsandone(1)daybutnotmorethanten (10) years for any manufacturer, seller or distributor who shall conceal, substitute, disposeordestroyanydrugasmayhavebeensegregatedandsealedbytheBureauor whoshallbreak,alterortamperanymarkorsealusedbytheBureautoidentifythose segregateddrugsasprovidedforunderSection6(a)ofthisAct.Anyotherpersonwho breaks,altersortampersanymarkorsealusedbytheBureautoidentifythesegregated drugsshallsufferthepenaltyofnotlessthansix(6)monthsandone(1)day,butnot morethansix(6)yearsimprisonment;or e)if,asaresultoftheuseofthedrugfoundtobecounterfeit,theillnesssoughttobecured is aggravated or physical injury or suffering results therefrom, a punishment of imprisonment from twelve (12 years to fifteen (15) years and a fine ranging from One hundredthousandpesos(P100,000)toFivehundredthousandpesos(P500,000)shallbe metedout;or f) shouldacounterfeitdrugbetheproximatecauseofdeathofavictim,whounknowingly purchasedandtookacounterfeitdrug,thepenaltyoflifeimprisonmentandafineofFive hundredthousandpesos(P500,000)toFivemillionpesos(P5,000,000)shallbeimposed. IncaseanyactprohibitedinSection4hereofisalsopunishableunderotherlaws,the offendershall,ifwarrantedbytheevidence,beprosecutedunderthelawprescribingthe highestpenalty. SECTION9.AppropriationsTheamountnecessarytocarryouttheprovisionsofthisActshall beincludedintheGeneralAppropriationsActfortheyearfollowingitsenactmentandeveryyear thereafter. SECTION10.ImplementationTheBureauofFoodandDrugsoftheDepartmentofHealthis herebyauthorizedtoadministerandsupervisetheimplementationofthisAct. SECTION 11. Implementing Rules and Regulations. Within ninety (90) days from the approval of this Act, the Bureau of Food and Drugs, in consultation with the Department of Health,shallpromulgatetherulesandregulationsimplementingtheprovisionsofthisAct.The implementingrulesandregulationsissuedpursuanttothissectionshalltakeeffectthirty(30) daysafteritspublicationintwo(2)nationalnewspapersofgeneralcirculation. SECTION12. SeparabilityClause If,foranyreason,anyportionorprovisionofthisActis subsequently declared unconstitutional or invalid, suchdeclaration shall notnullify the other portionsorprovisionshereof. SECTION13.RepealingClause.alllaws,decrees,executiveoradministrativeorders,rulesor regulationsinconsistentwiththeprovisionsofthisActareherebyormodifiedaccordingly. SECTION14.Effectivity.ThisActshalltakeeffectfifteen(15)daysafteritspublicationinat leasttwo(2)nationalnewspapersofgeneral circulation.

Approved, (Sgd)JOSEDEVENECIA,JR. SpeakeroftheHouse ofRepresentatives (Sgd)NEPTALIA.GONZALES PresidentoftheSenate

ThisAct,whichisaconsolidationofSenateBillNO.1284andHouseBill No. 5666 was finally passed by the Senate and the House of RepresentativesonAugust27,1996andAugust22,1996,respectively. (Sgd)ROBERTOP.NAZARENO (Sgd)HEZELP.GACUTAN Secretary General Secretary of the Senate House of Representatives Approved:September4,1996