Wednesday, December 17, 2008


By Patricia A. Earl,
Executive Strategist
VP Business Development
XStream Systems, Inc.

As succinctly stated in the earlier blog post, it is a near certainty that the United States pharmaceutical industry will face growing counterfeiting issues in the coming years.

These increasing occurrences will impact the industry in a number of important ways. The primary, and most obvious, concern is the liability problem. Trial lawyers have eagerly pursued businesses throughout the chain of custody when filing claims in other product liability areas.

A second issue regarding counterfeiting is integrity. From a professional and personal standpoint, members of the pharmaceutical industry do, and should, want to assure the end users of the products that they are safe and effective. Add to this the desire for safety and efficacy in a regulatory environment that when functioning properly will demand accountability. When companies within this industry sell or distribute products, they should be exactly what the customer expects.

The third issue is trust…and reliability. In order for our industry to grow effectively and for each of our companies or institutions to thrive, our customers must be able to trust us and the products that we deliver. Counterfeits, regardless of where they exist in the distribution chain, undermine the customers’ faith in the industry as a whole.

A final issue that I wish to discuss is the possibility of government intervention in the pharmaceutical distribution process. If counterfeiting becomes more prevalent and risks to patients are growing, then Congress, the Executive branch and its regulatory agencies will face increasing public pressure to “do something.” In this scenario is likely that they will respond with knee jerk mandates. Given government history in other industries, those mandates can be too severe, and at the same time, generally ineffective.

Finally, the pharmaceutical distribution chain should address a proactive posture to assure the integrity of the product. If done thoughtfully, this would limit liability, maintain integrity, enhance trust and reliability and, perhaps, preempt overreaching government meddling. Leaders in the pharmaceutical industry should implement counterfeit detection technology now to protect our reputations and our bottom lines.

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