Within three years after the directive takes effect, pharmaceutical companies will be required to stamp each package with a serial number that can be tracked across the European Union from the manufacturing plant to the pharmacy.
The new steps, in addition to current safety seals and holograms, are aimed at counterfeiters who spend little money on the ingredients in fake medicines but a lot on identical packaging.
"Falsified medicines are silent killers, either because they are devoid of effect or because they contain toxic substances that may harm, or even kill, those who take them. The absence of a legal framework encourages counterfeiting, an organized crime," said Marisa Matias, a Portuguese MEP from the European United Left, who led discussions in the Parliament.
The resolution was adopted with 569 votes in favour, 12 against and seven abstentions. Research suggests that one in five Europeans is putting themselves at risk and admit purchasing prescription-only medicines without a prescription – that's over 77 million people.
The problem affects poor populations just as much as it hits wealthy nations. The World Heath Organisation (WHO) estimates that counterfeit drugs constitute up to 25% of the total medicine supply in less developed countries.
According to a report by the International Policy Network (IPN), a detailed study of medicines in Africa and South East Asia revealed that between 30% and 60% of medicines were "substandard". The largest producers of fake medicines are India and China, according to the IPN.
Criminal penalties to tackle growing health threat
The array of counterfeit medicines has burgeoned beyond lifestyle drugs for sexual performance and weight loss, and now includes drugs for a number of serious aliments including high cholesterol and heart conditions (non-prescription drugs are not covered by the rules).
There were more than 11 million counterfeit medicines seized at EU borders in 2009, a spike of more than 400% in just three years, according to a report on EU customs enforcement.
The directive calls for criminal penalties involving fake drugs to be as harsh as those for illegal acts involving narcotics. The European Commission is expected to issue guidelines.
More than half of medicines purchased over the websites of illegal pharmacies are fake, according to the WHO. And when members of the European consumer advocates association (BEUC) tested Internet sales of medicines, they were able to order prescriptions without a doctor's order, received pills with the wrong dose, and even got pills wrapped in sheets of newspaper.
"The key is consumer awareness, especially when they buy online," said Ophelie Spanneut, a policy analyst for BEUC in Brussels.
Increased safety and higher costs
Currently, six EU members allow patients to buy prescriptions online: Denmark, Germany, the Netherlands, Portugal, Sweden, and the United Kingdom. Under the new laws, pharmacies that comply with the rules will have an EU logo on their websites, she said.
Under the rules, the chief pharmacist must be identified on the websites for all mail-order pharmacies, and the doctor's original prescription must be obtained before mailing out the medicine.
Increased safety measures, however, could mean higher prices for consumers. The Commission estimated the cost would be between €6 billion and €11 billion, the bulk of which would hit the industry. The pharmaceutical industry estimates the new serial numbers will add less than half a cent to the price of a package of pills.
But that has still raised concerns among makers of generic drugs, which operate on razor-thin margins. These companies argue the cost should be spread in proportion to the price, because expensive medicines are more often targeted by crooks, according to the European Generic Medicines Association.
It is also unclear how much the laws will raise costs for re-sellers who buy cheap medicines in countries like Greece and repackage them for sale in higher-priced markets such as the UK.
"It will add to the cost of packaging materials, they have to be more secure, and that's something that affects us," said Heinz Kobelt, secretary-general for the European Association of Euro-Pharmaceutical Companies, which represents re-sellers. These companies will be required to install equivalent safety measures, which could result in "unintended haggling about what is equivalent," he said.
The Commission will assess the costs and benefits of the safety measures.
In addition to potentially higher prices, consumer advocates are also concerned about data privacy. With serial tracking numbers, a lot of sensitive health information will be stored in pharmacy databases and shared across national borders.
"These provisions will have to be carefully monitored," said BEUC's Spanneut.