The International Hologram Manufacturers Association (IHMA) recently conducted a survey polling pharmacists on their concerns about counterfeit drugs. The survey polled 2,000 pharmacists from the United States, Europe, and Australia and found that 61 percent believed counterfeit medication is a serious issue in their country. 63 percent thought current policies are not sufficient in combating this global issue.
This collective consensus is factual—counterfeit drugs are being manufactured, sourced, bought, and sold, over trade boards and Internet pharmacies alike. Even more dangerous, these drugs can infiltrate legitimate supply chains. The growth of the Internet has provided a home for pharmaceutical products and Active Pharmaceutical Ingredients (APIs), which in turn generates a significant threat to consumer safety and company reputation.
The World Health Organization (WHO) and the United States Pharmacopoeia (USP) also released a study revealing an increasingly high rate of failure of anti-malarial and anti-tuberculosis drugs in Africa. The highest failure rate was found in Nigeria—a staggering 70 percent. Ghana came in next at over 60 percent and Cameroon at over 50 percent, possibly suggesting new hubs or distribution centers throughout Africa. This is distressingly high, but not surprising as the WHO estimates that 10 percent of the world pharmaceutical market is made up of counterfeit drugs and in some regions of the world, including Africa, counterfeit drugs amount to 30 percent of those markets. The total international counterfeit global drug market is currently estimated at around $75 billion.
Much of this illicit behavior is funneled through online sales channels. A two-year study conducted by OpSec revealed a 30 percent rise in the number of listings offering bulk pharmaceuticals across highly trafficked B2B tradeboards from 2007 to 2009. Over the two-year period, OpSec also monitored the number of Internet pharmacies that did not require a prescription—this grew by 65 percent, while those that required one decreased by 55 percent. Significant discounts were available for these drugs as well – a 300 percent increase in rogue online pharmacies offering prices 60-80 percent below retail. The continued rise in these trends reveals risks to consumers who buy pharmaceuticals and companies that source products online. Unfortunately the anonymity, lenient regulations, and far reach of the Internet allow counterfeits to enter the supply chain.
As a result, companies looking to protect consumers and their brands must understand the complexity of the supply chain, and formulate a strategy. An integrated, multi-pronged solution addresses the key risks to patient safety, grey market activity, and intellectual property infringements. This includes analyzing the market landscape for risk, applying product authentication as an anti-counterfeiting measure, implementing traceability, and employing an online enforcement solution. In BrandSecure News, leading pharmaceutical company Merck KGaA described their challenges facing the market dynamics of the Internet and their need for a clear anti-counterfeiting effort, including the ability to gather intelligence from online sales channels, and identify vast networks of rogue pharmacies and distributors. Through their work with OpSec, Manfred Bernau, Senior Security Manager, explains how the research, data, and investigations, led to visibility into e-commerce channels, takedowns, and case building against the most nefarious infringers.
Combating this issue is no easy feat. Consumers enticed by deep discounts online should be aware of the potential danger. Pharmaceutical companies and governments also need to continue to address the widespread availability of suspect pharmaceuticals and the infiltration of unauthorized product into the legitimate supply chain. If not, we will continue to see these numbers grow and put consumer health in jeopardy. Is this a risk we can afford to take?
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