Phoney pharma: the challenges with the fake pharma market

Rich Quelch, global head of marketing at Origin, shares the challenges with the ‘fake’ pharma market.

Pharmaceuticals are the world’s most counterfeited consumer product, with the latest figures from the World Customs Organisation estimating the global ‘fake’ pharma market to be worth upwards of $200 billion.

The global trade in counterfeit and falsified medicines has always been a very large and real threat to public health – and pharma companies’ reputation. But the COVID-19 pandemic heightened this risk, creating a ‘perfect storm’ which made it easier and quicker for counterfeiters to circulate and sell fake products, thanks to supply chain disruption and complexities.

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.

So, what are the latest anti-counterfeiting strategies being actioned by the industry, regulators and governments? And how are packaging technologies aiding the fight against the fakes?

The difference between ‘counterfeit’ and ‘falsified’

To understand the scope of the challenge facing the pharmaceutical market and the threat to public health, it’s important to distinguish between the terms ‘counterfeit’ and ‘falsified’ medicines.

The European Medicines Agency defines counterfeit medicine as being “made by someone other than the genuine manufacturer, by copying or imitating an original product without authority or rights and [infringing] trademark law”.

These products are disguised as legitimate branded medicines, putting their reputations at risk.

There is also the challenge of falsified medicines – the fake, unauthorised medical products that make their way into the market. These may be mislabelled or produced in fake packaging and, most dangerously, there is no regulation around their manufacturing. Falsified medicines may contain the wrong ingredients or low levels of the active ingredient.

Both counterfeit and falsified medicines pose risks to public health and threaten to undermine the healthcare system and pharmaceutical industry.

A cat and mouse game

Anti-counterfeiting is a cat and mouse game, 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.

Packaging technologies remain the first line of defence against counterfeit and falsified medicines.

For pharmaceutical manufacturers, the primary solution has long been to build anti-counterfeiting technology directly into medical packaging – providing a convenient method for tracking products across supply chains as well as visual authenticity for the consumer.

A significant advancement in worldwide standards for mass serialisation on packaging came in 2019 when two important regulations came into force – the EU’s False Medicines Directive and the US’ anti-counterfeiting protocol, ‘The Drug Quality and Security Act’.

Both regulations focus on connected approaches to authentication, with all agents across the supply chain expected to contribute to the tracking of legitimate products. The EU’s FMD requires complete product traceability from manufacturing to decommissioning, rather than placing the burden of authentication on any single stage of the process. The Drug Quality and Security Act also requires authentication at every supply chain juncture, including wholesalers.

The challenge, however, is that criminals are only ever one step behind. And each new development in product-level coding only remains a barrier for a few years before fraudulent manufacturers produce counterfeit copies and bypass security protocols.

As a result, the development of advanced packaging-level tokens has led to watermarking techniques – invisible, encoded data that requires specialist verification software. This technology proves difficult to replicate as it is invisible to the human eye, and its unique data is required throughout tracing and decommission to verify against interference.

Supply chain 4.0

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 lifecycle 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 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.

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 anticounterfeiting ecosystems, either. Manufacturers can avoid the high up-front costs of developing an anti-counterfeiting system by handing off all or part of the work to external providers.

Anti-counterfeiting solutions are becoming smarter every year. But so are criminal networks. There is a real opportunity here for pharma companies with the foresight to invest in Supply Chain 4.0, and for governments to remove any red tape holding back its development, to set the stage for new business models that can create value in many ways – and limit counterfeit activity in the process, too.