The fight against fake pharmaceuticals is unlocking a new era of commercial opportunity
When you think of counterfeit goods, what probably comes to mind are purses, handbags or watches. But the world’s largest fraud market is actually pharmaceuticals – and by a big margin.
The global trade in fake pharmaceuticals has always been a very large and real threat to public health. But the COVID-19 pandemic has heightened this risk over the past two years, creating a ‘perfect storm’ where counterfeiters are aided by supply chain disruption, regulatory pivots and urgent demand for medical products.
In the early emergency phase of the pandemic, it was clear that criminals would take advantage of the situation and put profit over safety. In fact, by March 2020, Interpol’s Operation Pangea XIII seized counterfeit pharmaceuticals worth more than $14 million worldwide, just months after the COVID-19 virus was first discovered. Since then, the situation hasn’t let up.
According to the European Medicines Agency: “A counterfeit medicine is made by someone other than the genuine manufacturer, by copying or imitating an original product without authority or rights and infringe trademark law”.
In contrast, falsified medicines are “fake medicines that pass themselves off as real, authorised medicines”. This could mean they contain ingredients of low quality or in the wrong doses, are deliberately and fraudulently mislabelled with respect to their identity or source, have fake packaging, the wrong ingredients, or low levels of the active ingredients.
Both can be equally dangerous to public health and have far-reaching consequences for healthcare systems and the global pharmaceutical industry.
A growing shadow
An estimate by the World Customs Organization values the global annual market for fake medicines at approximately US$200 billion and as the legitimate pharmaceutical industry grows, so too does this shadow market.
But it’s an issue that, like many other things, further fuels health inequalities. While counterfeit and falsified medicines exist in every region of the world, they are most prevalent in low-and middle-income countries where access to healthcare is widening, such as in Africa and Asia.
In recent years, however, we’re also seeing pharma counterfeiters leverage digital channels – including social media and online pharmacies – to penetrate developed countries where barriers and regulatory oversight are at their strongest. WHO estimated in 2015 that 50% of drugs for sale over the internet were fake and this is only increasing.
Today, no country or company can afford to overlook their vulnerability, nor the opportunities available to reduce the threat of fake medicines and improve existing supply chain safeguards.
Anti-counterfeiting is a game of cat and mouse, with criminals usually cracking today’s systems in two to three years. This means continuous improvements and advancements are needed to stay one step ahead.
A mandatory method called ‘mass serialisation’, often combined with ‘track-and-trace’ requirements, is becoming the worldwide standard for regulators working to stem the tide of fake drugs. In 2019 we saw two important pieces of serialisation regulation take effect – the EU’s False Medicines Directive (FMD) and the US’s anti-counterfeiting protocol The Drug Quality and Security Act.
The FMD ensures complete product traceability from manufacturing to decommissioning, instead of placing the burden of authentication on any single stage of the process. The Drug Quality and Security Act requires authentication at every supply chain juncture, including wholesalers. Both don’t require product-level coding but rely on barcodes printed on secondary packaging which sophisticated criminal networks can quite easily replicate.
In response, digital watermarks are becoming more widely used, offering an extra layer of protection by providing invisible, encoded data on packaging that can only be verified by specialist software. It can be captured using webcam, mobile phones and other scanning equipment, but is invisible to the human eye.
We’re also seeing developments in holograms, designed so that they’re only visible behind each pill/capsule cavity on the back of each blister pack, thereby allowing the printing of dosage and marketing information on the area surrounding the recess.
Pharmaceutical supply chains are increasingly complex, introducing a greater risk of exploitation and making it harder for stakeholders to monitor the flow of products.
Enhanced anti-counterfeiting methods, including cloud-based tracking and perennial encryption technologies, are extending the life cycle of protection for manufacturers, so frequent and costly overhauls are avoided. They are also making it easier to spot and eliminate weak links in supply chains that criminals are quick to exploit.
They also have the added benefit of creating value in other ways too, helping to increase end-to-end visibility and efficiencies across the pharma supply chain by gathering data that can be analysed and acted upon, often in real time.
Big data, provided by smart packaging in part, will be key to giving pharma companies a more granular, real-time picture of events taking place along the supply chain, from manufacture to healthcare settings.
Meanwhile, advanced tracking systems, built into primary and secondary packaging, are an exciting area of innovation. By managing and recording all the typical activities that occur in the supply chain or designed to cover special requirements, tracking chips can log events or raise queries that occur across a product’s lifespan remotely.
This is invaluable information for anti-tampering and wider commercial strategies, allowing companies to locate and interrogate a product anywhere in the supply chain. For example, the geographical location of a product and the route it took to arrive there can all be captured and stored, thus revealing any unauthorised journey routes, interventions or delays.
Collected data can also highlight inefficiencies and bottlenecks which can be addressed to streamline processes and drive cost-savings. Drug companies won’t necessarily have to build their own anti-counterfeiting ecosystems, either. Manufacturers can avoid the high upfront costs of developing an anti-counterfeiting system by handing off all or part of the work to external providers.
A more joined-up approach between stakeholders globally will improve timely interaction between parties, make surveillance online and offline more diligent, speed up the dissemination of information, provide better training for health professionals and boost public education initiatives.
Ultimately, anti-counterfeiting solutions are becoming smarter every year, but so too are criminal networks. There is a real opportunity here for pharma companies with the foresight to invest in more sophisticated solutions and for governments to remove any red tape holding back their development.
Rich Quelch is Global Head of Marketing at Origin. Go to originltd.com