FBI Insights On Counterfeit Drug Prevention
By Ken Congdon
Counterfeiting is a huge problem plaguing our industry. The World Health Organization (WHO) estimates more than 10 percent of drugs sold around the world are counterfeit — creating an illegal market worth more than $200 billion annually. While the issue is a global one, counterfeiting is much more prevalent in certain geographies than others. For example, incidents of counterfeiting in industrialized nations are relatively uncommon (accounting for approximately 1 percent of drugs sold). However, the chances of purchasing a counterfeit drug in a developing region such as India or China can exceed 50 percent. This is due, in large part, to the lack of regulations or enforcement actions that protect medication integrity in these areas of the world.
These statistics should be troubling to pharmaceutical manufacturers that distribute products in these regions. And, the figures can become even more inflated if you consider other instances of tampering outside of the textbook “counterfeit drug” definition. To clarify, a counterfeit drug is identified as one that has been made by someone other than the genuine manufacturer by copying or imitating the medication’s formula without authority. However, another common criminal practice occurs when injectable drug shipments are stolen, diluted with water, and resold. This practice lowers the potency of the medication, which can have life-threatening effects on patients (particularly in the case of cancer drugs). All told, medication counterfeiting and tampering activities can expose a manufacturer to legal action and forever damage their brand image and reputation. Drugmakers need to be proactive in their efforts to protect their company and product integrity.
Track & Trace Technology Is Not Enough
Unfortunately, many pharmaceutical manufacturers’ efforts to prevent counterfeiting have been limited to applying tags and serialization to drug packaging. Track and trace tactics such as these are certainly central to any anti-counterfeiting strategy, but they only address part of the problem and will do little to impact the overall practice on their own.
“Simply throwing technology at the counterfeiting problem does little good,” says Keith Cutri, Director of Business Development and Brand Protection at Kodak. “These efforts may provide manufacturers with a false sense of security, but without a solid incident detection process in place, drugmakers will never be able to determine if they have a problem or if their track and trace efforts are having the desired impact.”
Cutri knows what he’s talking about. Prior to joining Kodak, Cutri was an FBI agent that was involved in several counterfeiting cases. This firsthand experience led Cutri to coin his five best practices for counterfeit prevention. They are as follows:
- Authentication & Traceability — As mentioned, track and trace technologies (e.g. serialization, barcodes, RFID tags, UV marks and fibers, etc.) to verify product authenticity are an important element of any counterfeit prevention strategy, but they are only the first step.
- Incident Detection — The ability to identify that you have a counterfeiting problem is the most important aspect of any brand protection initiative. According to Cutri, incident detection is largely a human endeavor. In other words, it requires a lot of “eyes and ears on the street” that will inform you of counterfeit activity involving your products.
One common way to gain this intelligence is through a brand loyalty program where a pharmaceutical manufacturer partners with healthcare providers, pharmacies, and even patients to verify that the products they receive from the drugmaker are authentic. In these scenarios, the recipient of the medication agrees to scan each package for serial numbers, barcodes, tags, or markings (using a provided scanner or smartphone) to validate that it is indeed genuine. The provider, pharmacy, or patient then relays these findings back to the pharmaceutical manufacturer in exchange for product discounts. This process can help determine if certain authentication features are present on the drug lot, whether the codes printed on a package are valid, or whether a certain product lot was intended to be in the geography in which it was ultimately received.
- Incident Analysis & Investigation — Incident analysis and investigation is also largely performed by human resources. For example, internal or third party investigators can be employed to make covert purchases of a manufacturer’s medications via multiple online distributors to determine authenticity. If counterfeit drugs are discovered, these investigators can conduct the research and surveillance necessary to identify the sources of these imitations.
- Enforcement — Enforcement actions take many forms. They can range from factory raid on counterfeit locations and prosecution of forgers to something as simple as enforcing distributor contracts. Manufacturers need to ensure their distributor contracts contain language that clearly states that grey market purchasing activities are strictly prohibited. It should also provide the manufacturer with the tools to monitor distributor purchasing practices and the ability to terminate the contract or invoke some other type of corrective action if grey market activity is discovered.
- Business Metrics — It is extremely important for pharmaceutical manufacturers to keep track of the counterfeit incidents they detect around the world in order to fully understand the impact their brand protection efforts are having and to tweak these efforts based on key findings. Specifically, manufacturers should keep track of the amount of counterfeit drugs and packaging that have been discovered and the enforcement actions that have taken place (e.g. factory raids, arrests, distributor reprimands) to thwart future occurrences.
Not All Anti-Counterfeiting Measures Are Created Equal
As mentioned, track and trace technologies are definitely an essential element to any brand protection program, but not all are equally effective at deterring counterfeiting activity. For example, overt (i.e. visible) packaging or security features (e.g. film wrappers, shrink seals, breakable caps, etc.) are likely to be copied by counterfeiters. It’s been estimated that as much as 80 percent of a drug counterfeiter’s budget is spent on packaging. In many instances, these criminals even source containers, caps, inks, and labels from the very same suppliers that pharmaceutical manufacturers use.
In light of this, Cutri is a proponent of covert (i.e. hidden) security features such as substrates and invisible printing. “If a counterfeiter can’t see a security feature or doesn’t know what to look for, it makes it more difficult for them to replicate,” says Cutri.
However, just because a track and trace feature can’t be seen by the naked eye doesn’t necessarily mean it can’t be found and copied by a counterfeiter. “Most counterfeiters have the capability to reveal a UV ink or even an IR type of marking using an upconverter system and infrared fluorescent pen,” says Cutri.
Another approach is to use a proprietary covert marking solution where a traceless dye is added to the ink or varnish used on product packaging and can only be revealed using a proprietary reader issued by the solution vendor. Cutri supports the use of these types of solutions in conjunction with the visible codes present on medication packaging.
“Adding a covert material to your packaging inks allows you to add a layer of protection to your products,” says Cutri. “In essence, you can perform dual serialization. With this approach, counterfeiters won’t be able to accurately copy visible marks because their versions won’t contain the invisible dye. Similarly, they will never be able to completely remove codes because other invisible codes are present elsewhere on the packaging.”
Perhaps the newest development in the fight against medication counterfeiting is the emergence of invisible, edible barcodes. These tags are made from silica and can be optically encoded directly onto prescription pills. Each tag contains a custom-manufactured spectral signature chosen from millions of possibilities. These signatures can be scanned using a portable spectrometer-based optical reader that can reference a secure database that contains a wealth of information about the drug (e.g. lot number, expiration date, date of manufacture, authorized customer, country of authorized sale, etc.) linked to that specific signature. Pairing these types of on-pill identification features with more traditional packaging security and tracking approaches can prove to be a powerful deterrent for counterfeiters. However, as mentioned in the previous section, it all does little good if a manufacturer doesn’t invest in the detection, investigation, and enforcement efforts necessary to curb threats of counterfeiting and ultimately reduce incidents.