Serialization To Solve Pharma Counterfeiting, A $70 Billion Issue

In an interview at Pharma EXPO 2014, David DeJean, Vice President, Center of Excellence, Systech, discusses how serialization and track and trace solutions will help prevent counterfeiting in the pharmaceutical market. DeJean discusses vulnerabilities in the supply chain and what manufacturers can learn from Brazil's strict ANVISA requirements. The World Health Organization (WHO) estimates counterfeiting to be a $70 billion problem, says DeJean. 

 
Interview Transcription:

Todd S:   Alright. Good morning. Todd and Todd live from Chicago, Life Science Connect Radio’s day 4 coverage from this grand event. Todd, this is a gentleman we’ve had the pleasure of chatting with before but looking forward to this conversation.

Todd Y:   I am, too. Just the whole topic of counterfeiting just kind of grabbed my imagination. It’s not something I thought about a lot in the past years. I think it’s something a lot of people don’t ever think of.

Todd S:   The general consumer certainly doesn’t understand and appreciate as they should, and I can tell you and I we’re aware of the issue, but this event has given us a much, much wider appreciation of the severity of the problem but also some confidence about some of the good things being done.

Todd Y:   Yes, there is something being done about it, right?

Todd S:   So let’s get to it. Say hello to our guest. His name is David De Jean. He is the Vice President, Center of Excellence for Systech International. David, welcome to the show.

David:     Good morning. Thank you.

Todd S:   It’s good to have you. Thanks for joining us. Before we get into our conversation, very quickly walk us through a little bit about you and your background.

David:     Sure. So I’ve been in this industry for over 10 years, with Systech for 27 years. We’ve been very much involved in what we call best practices around delivering serialization, anti-counterfeiting and authentication technologies. My role is really to kind of be that in the industry.

Todd S:   Got it.

Todd Y:   Frame this whole issue for us. Tell us how big is the counterfeiting problem, what’s its nature.

David:     In pharmaceutical manufacturing, it’s incredibly a broad area. We have estimates out there that are close to 30 percent of all products worldwide are potentially counterfeit products depending on what market you’re in. Here in the US, that’s a much smaller number but it is estimated to be somewhere around 1 to 2 percent of even the US supply chain is potentially counterfeit. It’s a real serious problem. The further you get into developing countries, the bigger the problem is.

Todd S:   Is the problem widening? I mean, we’re aware of it. There are things we’re trying to do to tackle it. Is the problem continuing to grow?

David:     It is continuing to grow. Absolutely. Every year. Year over year. The World Health Organization estimates it close to being a $70 billion problem.

Todd Y:   Talk a little bit about the vulnerabilities. Where are the holes in the system that allow the counterfeiters to get in?

David:     Generally, it’s the transactions of the products through the supply chain. Manufacturers generally are trusted they make a good product. They provide the whole sale chain.

               Then as products move through the complicated supply chain, it allows entry points for the bad guys to get into primarily through secondary wholesalers. You know, here in States products can move many, many times and as those products move, that’s where the bad guys introduce counterfeit products.

Todd S:   So what’s going to happen when we deploy all these serialization solutions in line with all this compliance?

David:     So obviously the goal is to protect consumer safety. But as products are beginning to be serialized, you are now afforded the opportunity to track those products and the transactions that happen between the trading partners. So if you’re selling serialized goods, you’re telling a wholesaler what’s coming to them and then they are doing the same to who they’re selling it to.

                You have this in essence this pedigree or this chain of custody of that product that you know that it’s genuine in the transactions of that product are genuine as well. That’s really the overall goal of serialization and track and trace.

Todd Y:   Does the serialization fix it?

David:     It helps.

Todd Y:   I should ask the question better. I knew of course it doesn’t fix it all but I mean does it plug the whole, 90 percent of the hole?

David:     It really does make it much more difficult for the counterfeiters to get an entry. Bad guys are still going to be bad guys so there are always going to be places where things are going to happen.

               But the mass movement of the products, the fact that there’s traceability associated, it will deter a tremendous amount of the problem. So yes, I think it will have a significant impact globally on it, which is why it’s a global issue. That’s why literally every region in the world is implementing serialization at this point.

Todd S:   What else can we do? What other technological solutions are there that can get a handle on this?

David:     So smarter people and myself have always looked at product authentication and anti-counterfeiting really as a stacked level of technology. So serialization is just one thing to add to it, continuing to add other anti-counterfeiting technologies on top of serialization and generally varying those technologies.

               We’ve recently introduced a E-fingerprint which is a technology that rides along with the serialization and it provides a covert method of anti-counterfeiting as well. When there is a suspect event, they can actually very quickly authenticate whether that was their product or not. That’s really kind of the strategy is just to continue to layer different technologies on top of each other to stay one step ahead of those counterfeiters.

Todd Y:   David, if we assume for a minute that the industry gets only to the 2015 standards that the regulation set, I mean how far along the whole path is to addressing the problem effectively are we?

David:     The 2015 regulation really is how they trade product today. It really is not doing anything to significantly change the problem, if you will. It’s lot level traceability and in all honesty, most manufacturers and wholesalers trading lot level today. So it’s not really a significant change.

               The 2017 is really the first step towards some level of traceability of the products. But really, it’s not until 2023 until you really have a totally secure supply chain in the US.

Todd S:   You presented recently (0:05:32) pharma. What can US manufacturers learn from Brazil’s strict (0:05:39 M visa) requirements?

David:     It’s a great question. M visa has actually taken a very aggressive approach to their problem around counterfeiting and products moving through the supply chain. They’ve put the (0:05:50) on the manufacturers to track the products through the supply chain and report back to them of any suspect events.

               I think it’s a model that we can look at and say hey, here’s a very large market that moves a lot of products through it that are requiring serialization and traceability and putting the manufacturer responsible to say “I know where my products are, they’re safe to take.” So I think we can learn a lot from that.

Todd Y:   You mentioned just a second ago 2023, I mean, that’s how long it’s going to be until the issue is really addressed. One of the things I find a little spooky about that, if I personally have a deadline of 2023, I guarantee I’m not thinking about it, but how big a problem is that? If somebody’s got a long way to go, is it really a 9-year project?

David:     If you give somebody the 2023, they’re going to take until 2023 to implement it. It is a phase in approach and I think there are steps. The 2017 implementation deadline thus add some level of protection, so it is a stepwise and they have to put the infrastructure in the 2017 timeline to support what will be in place in 2023.

               So I would suspect they’ll start seeing a movement even before 2023 where a serialized product will start moving through the supply chain and there will be some level of protection, but I don’t think it will completed until the 2023 timeline.

Todd S:   You’re exhibiting here at the show. What are you principally showcasing here?

David:     So we’ve come up with a number of new innovations focused specifically around compliance ready packages is really one of the things that we’ve introduced here where it’s a compliant package for 2017, meets the regulations, full solution for risk-free delivery is really kind of what we’re offering.

               However, it does provide the expansion capability to comply to the 2023 requirements as well. So get it in risk-free. There’s a lot of people that have to do something in a very short period of time here.

Todd Y:   Anything you have coming through the pipeline that’s above and beyond what the regulators are requiring??

David:     Yes, so that’s a great question. The fingerprint technology that I mentioned earlier is a new… we’re in a commercial pilot phase right now with not only pharma manufacturers but outside of pharma and fast moving consumer goods. It’s a very exciting technology because it’s not an additive technology for anti-counterfeiting.

               Most anti-counterfeiting technologies, you add something to the product and then you have to have special readers. This leverages the printing process of the barcode on the product and uses just standard cellphone technology for authentication.

               So it adds another layer of security that is well beyond just the serialization and it’s a pretty exciting technology. We’ve got some great feedback from our customers and we’re looking forward to watching that.

Todd S:   Outstanding. Well, we’re in day 4 of the exhibit. What’s been the biggest takeaway you’ve had from Pharma Expo, PACK Expo that you think our audience ought to know about?

David:     The one thing I have to say that turned out this year was absolutely tremendous. We’ve seen a lot of customers back in, engaged and talking and looking for solutions, and it’s just been a great show for us.

Todd S:   Outstanding. David, we’re out of time. Before we let you go, how can people get in touch with you and learn more about Systech International?

David:     I can be reached at DavidDeJean@Systech-tips.com and I can be looked up on our website and www.systech-tips.com.

Todd S:   David De Jean, Vice-President Center of Excellence with Systech International. David, good to see you again. Thanks for stopping by and joining us.

David:     Great. Thanks!

Todd Y:   We appreciate your insights.

David:     Appreciate it.

Todd S:   Alright. Well, that wraps this segment. This has been Life Science Connect Radio. Todd and Todd signing off from Chicago. Our live coverage will be right back.