Counterfeiting in the pharmaceutical sector: brand protection and supply chain visibility

Counterfeiting in the pharmaceutical sector

To design and implement patient-focused solutions, a precise strategy must be put in place. Whether it is a therapy, a clinical trial or a healthcare procedure, feedback must be collected from real patients and those close to them. It will thus be possible to have the real data and evidence to make the appropriate decisions based on their needs and expectations. The same approach is needed to fight counterfeiting in the pharmaceutical sector, through precise strategies of brand protection and supply chain visibility.

The “patient centricity” approach engages in an operational and emotional involvement of the patient. It places the patients at the center of dynamics and good practices of care, communication, education, thus making them the main actors on the path to improving their health.

Patient centricity, experience and engagement

Yet, in relation to some aspects and processes, it seems that the patient is not yet so central, but on the contrary too often neglected and left alone.

Perhaps we forget that the term “patient”, which in medicine indicates a person who addresses a doctor or a health care facility for medical checks or problems, is also an adjective that indicates a person willing to moderation, tolerance or resignated endurance. Nowadays the “Patient” is no longer so much “patient”, and this often leads them to pick the wrong choices. These include the purchase of drugs or health products from online channels or from unsafe sources.

Impatience of the patient

Whether we talk about chronic patients, about those in hospital or suffering from simple illnesses, in Italy the perception of the risks associated with online purchases of medicines is still largely insufficient. This is demonstrated by many case studies conducted by the Italian Medicines Agency (Aifa) together with the Ministry of Economic Development.

Who among us can be considered sufficiently informed on counterfeiting in the pharmaceutical sector? How many, especially in the last year, has bought or buys regularly from e-pharmacies or social networks? And how many of us are aware of the difference between counterfeit and falsified drugs, and of the associated dangers?

The perimeter of “patient centricity” must therefore be expanded. The bar must be raised. It is necessary to adopt a systemic vision that would also include what lies behind a therapy, what gives operational support to clinical trials and logistic support to any health procedure, in hospital or at the home of the impatient patient.

Today, technology can certainly help developing a holistic “patient centricity” approach, including such aspects as supply chain visibility and brand protection.

New regulations from 2025

There is still room for improvement on these fronts. From a regulatory point of view, the tracking and surveillance system – in the hands of the states of the European Economic Area (EEA) – has been active since 9 February 2019 to fight counterfeiting in the pharmaceutical sector and improve patient safety.

Due to the presence of a unique two-dimensional barcode identification (2D datamatrix), all prescription drugs dispensed in the EU are subject to verification of authenticity by the EMVS. The European Medicines Verification System was established in 2016 in implementation of the anti-counterfeiting directive (2011/62/EU) and the related delegated regulation. The goal is to protect European patients from the risk of counterfeit medicines entering the legal supply chain.

This new regulation will come into force in Italy in 2025 in consideration of the extension granted to our country as it has a pre-existing system, the so-called “pharmaceutical stamp”. Our manufacturing companies, which export more than 70%, have obviously already adapted their production lines to the new system to meet the demands of the European market. In fact, they would be ready in case of an immediate validity also on our territory with the establishment of the body in charge, the National Medicines Verification Organization (NMVO), operating at national level and connected to the EMVS.

But what about non-prescribed drugs? Or the other healthcare products? During the last year, for reasons certainly related to the pandemic, the web sales of false blood screening tests to diagnose Covid-19, poor quality masks, defective or counterfeit medicines have increased exponentially. And now that we have the vaccines, the alarm is even more relevant.

The damage of counterfeiting in the pharmaceutical sector

On Italian Ministry of Health website there is a section that reports the alarm raised by the OECD (Organization for Economic Cooperation and Development) and by EUIPO (European Union Intellectual Property Office) in charge of managing the Union trademarks and registered community designs and models.

The recent seizures of counterfeit medical materials sold as remedies against Covid-19, as we read in a note released by the two organizations in March 2020, “highlight the necessity to deal with a growing international traffic of counterfeit medicines that cost billions of euros every year while putting lives in jeopardy“. The Italian Medicines Agency, in a note in April, also warned citizens about the “worrying increase” in reports of falsified drugs.

There are many different negative consequences of counterfeit medicines on the world market.
They range from damage to people’s health to lost sales, from job losses to damage to the reputation of legitimate manufacturers. Governments and economies also suffer from revenue losses and huge costs for caring for patients who have been adversely affected by the use of counterfeit drugs.

Those who feed the counterfeiting market – both those who produce illegally and those who buy non-original products – make useless the investments that companies and brands make in research and development. Unfortunately, many aspects today contribute directly or indirectly to counterfeiting. They include expansion of the global economy, consumerism, desire of consumers to obtain goods they can’t legally afford.

E-commerce has further amplified and complicated the problem of counterfeiting in the pharmaceutical sector. Non-original products can be found and purchased also on some legitimate platforms, as well as in the less visible virtual channels of the “deep and dark” web.

Data: the costs of counterfeiting

  • 72,000-169,000 Estimated number of children dying from pneumonia each year due to counterfeit drugs
  • 32% Percentage of people who suffered health problems after taking counterfeit medicines (survey in the UK)
  • 9.6 billion euros Losses suffered by the European pharmaceutical industry in the period 2012-2016 due to counterfeiting
  • 200-800 million euros Costs afforded by the pharmaceutical sector to implement anti-counterfeiting measures
  • 1.7 billion euros Estimation of taxes not collected by governments due to counterfeiting

Data source: OECD/EUIPO (2020), Trade in Counterfeit Pharmaceutical Products, Illicit Trade.

The best way to invest resources

The truth is that most businesses face, or faced, the problem of counterfeiting only after discovering that they have been victims of it. After that discovery, they:

  • initiate legal actions and collaborations with customs authorities and police;
  • tighten contractual and commercial agreements with their partners by foreseeing sanctions in case of non-compliance;
  • measure service levels using challenging performance indicators;
  • carry out specific periodic checks and audits.

All of these are burdensome and expensive activities that require a huge effort for all the actors involved in terms of resources, time and costs.

Instead, it would be advisable to invest all these resources better, bringing the tools of supply chain visibility and brand protection to the benefit of “patient centricity”. Thanks to this systemic approach it would be possible to minimize the vulnerabilities of global supply chains. This could be done through both physical and virtual strategies, with a view that is increasingly aimed at the patient.

The use of technology is essential to fight counterfeiting, integrating traceability and product authentication solutions. Companies can use smart labels and packaging to monitor drugs throughout their entire life cycle, in all stages of the supply chain: production, storage, transit, dispensation, administration, therapeutic applications, and the following evidence.

Supply chain must become a “value chain”, that is, a chain capable of increasing the competence of patients / consumers. In this way we will increase their information, educate them and make them aware of the threat of counterfeit products and the necessity to protect the original brands.