Counterfeit Drugs: Why Take Preventative Medicine Now

Those firms that start with detailed strategic analysis and business planning will be best positioned to not only survive but thrive


First, a company can be engaged in criminal activity by selling into the drug distribution network without a license. Pharmacies, clinics, foreign distributors, repackagers and unlicensed wholesalers have been engaged in the illegal sale of drugs to legal entities engaged in drug distribution and dispensation. Very often these individuals change modus operandi by rapidly changing their physical location and through the use of shell companies. These companies are not always the producers of counterfeit products, but they are the crucial vehicle through which illegitimate products are diverted into the legitimate distribution network.

Second, companies both with and without licenses have been caught creating forged documentation in order to portray the sale of legitimate products. The forgeries include invoices, purchase orders, shipping documents and paper pedigrees that purport a legitimate source of the drugs. The legitimate sources being claimed can be either the manufacturer, authorized distributor of record (ADR) or another legal distributor (wholesaler, pharmacy or repackager). The product is sold to an unsuspecting buyer or a buyer that is willing to overlook the procedures required to verify the documentation.

Finally, both companies and individuals within a company have been found to knowingly purchase products from suspicious sources of dubious origin. The lack of licensure and transaction verification combined with limited internal controls enables an individual and/or an organization to accept illegitimate product into the legitimate distribution network.

These three methods combine to create the holes through which large volumes of illegitimate products can flow systemically and undetected into the legitimate distribution network.  A counterfeiter seeks to exploit the diversion network in order to sell illegitimate product at volumes and prices that maximize profits. The existence of these kinds of counterfeiting and diversion networks is one reason why the key focus must be on attacking the underlying systemic threats instead of targeting isolated incidents.

Systemic Threats Call for Systemic Protection

When looking at the appropriate response in combating product counterfeiting and drug diversion, it is helpful to assess the underlying threats and proposed tools against the desired outcomes. According to the research carried out at the Massachusetts Institute of Technology (MIT) Auto-ID Lab and elsewhere, there is no single, silver bullet for product security. Serializing products at the item level in order to authenticate product identity at points across the supply network and establishing an ongoing chain of custody through electronic pedigree are a few of the tools that companies can bring to bear on the problem. 

Leveraged appropriately, the process visibility, rich data access and operational control of these tools can also provide pharmaceutical companies and their trading partners several benefits including:

  • Enhanced flexibility in corporate outsourcing and virtualization programs.
  • Improved brand competitiveness and protected brand equity.
  • Enhanced sales and operations planning (S&OP) based on channel visibility.
  • Optimized reimbursement programs from an efficiency and financial standpoint.
  • Lean and responsive manufacturing and distribution operations.

However, which tools to leverage and in what combination often depends on the specific goals of the security program.

Different facets of product security protection may be warranted depending on several dimensions, such as potential patient harm, individual product value, business operational strategy and market brand equity risk. One approach to narrowing down the problem is to focus on the three key foundational goals of pharmaceutical product security – incident investigation, incident detection and threat prevention. Each goal provides a unique set of benefits and mandates a unique set of tools. One way of understanding these goals is to draw analogies from the design of a home security program:

Investigation
If a break-in occurs, how can we facilitate the launch and closure of the investigation into the event? A fingerprint identification process, using unique fingerprint records accessible by a central repository and linked to other information such as individual identity and location, helps police quickly follow up on leads by taking samples from the crime scene.

  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required