The Economist: Fake Drugs

Counterfeit drugs used to be a problem for poor countries. Now they threaten the rich world, too.

In the September 2nd edition of The Economist, they have an excellent piece on the issue of counterfeit drugs.

The Economist story focuses on updated statistics, industry insight, on how globally there is lax regulatory enforcement/punishment and how this deadly crime is impacting health care outside of the third world.

Highlighted in The Economist:

· Drug smugglers can expect harsh penalties nearly everywhere—if the drugs in question are heroin or cocaine. Those who smuggle counterfeit medicines, by contrast, have often faced lax enforcement and light punishment. Some governments deem drug-counterfeiting a trivial offence, little more than a common irritant.

· The pharmaceutical industry has persuaded several governments to stiffen regulations against fake drugs and to conduct more aggressive raids (see chart). Companies are also devising novel technologies to outfox the criminals. Even the Catholic church is joining the cause, issuing a stern statement in August that it is in “the best interest of all concerned that smuggling of counterfeit drugs be fought against”.

· Counterfeit drugs can kill. Studies of anti-infective treatments in Africa and South-East Asia have found that perhaps 15-30% are fakes. The UN estimates that roughly half of the anti-malarial drugs sold in Africa—worth some $438m a year—are counterfeits.

· Roger Bate of the American Enterprise Institute, a think-tank in Washington, DC, cautions that any such estimates should be treated with care. The countries with the most fakes may not be cracking down, so official figures will look rosy; in contrast, countries with a smaller counterfeit trade that are vigilant may end up with more seizures. The World Health Organization agrees, and has recently taken its estimates off its website. Even so, Mr Bate says his field work has convinced him that counterfeits kill at least 100,000 people a year, mostly in the poor world.

· Now it appears that fakes are taking off in the rich world too. Yes, Viagra still tops the list of knock-offs seen by Pfizer, says John Clark, the American drug firm’s global head of security; but fake versions of at least 20 of its products (including Lipitor, a blockbuster cholesterol drug) have been detected in the legitimate supply chains of at least 44 countries. Mr Clark’s intelligence comes from Pfizer’s global network of informants, consumer tip-offs and in-store inspections. He sees worrying trends.

· Counterfeiters used to operate chiefly in developing countries, says Mr Clark, but now his firm sees fakes coming from such rich and well-regulated places as Canada and Britain. And the crooks are growing more technologically sophisticated: some can even counterfeit the holograms on packets that are meant to reassure customers that pills are genuine.

· A consumer study funded by Pfizer recently found that nearly a fifth of Europeans polled in 14 countries had obtained medicines through illicit channels. That, the firm reckons, makes for a grey market in the EU of over €10 billion ($12.8 billion). Terry Hisey of Deloitte, a consultancy, thinks the global market for fakes could be worth between $75 billion and $200 billion a year. Those staggering sums, he argues, help explain the emergence of a flurry of new technologies and companies hoping to help the drugs industry “secure its global supply chain”.

The Economist outlines several technologies used in the fight against counterfeit drugs but comments:

· Thomas Kubic of the Pharmaceutical Security Institute, an industry-funded outfit, gives warning that this war will be hard to win. After more than 30 years as an investigator, he is sure that crooks will eventually find a way around any defence.

· Even so, he thinks novel approaches such as mobile-based validation may “harden the target”, just as a burglar alarm makes your home somewhat trickier to rob. If the cost and complexity of faking drugs goes up, crooks may choose to fake Gucci handbags instead. This would still be theft, not to mention a crime against fashion. But it will not kill anyone.

Secure Pharma Chain endorses the concept of a multiple layered approach of deploying technologies to protect the global supply chain.

As this article points out the professional counterfeiter can fake nearly all overt methods of labeling or tracking the packaging which is why Secure Pharma Chain thinks that authentication, the actual testing of the material inside the container should be the centerpiece of a robust, layered approach to make certain that the medications are genuine.

Authentication technologies have advanced to the point that they can verify products inside their sealed container without destroying the packaging or degrading the contents.

Knowing what is inside the box is crucial in protecting consumers from this deadly criminal act.

To read the entire, excellent article, visit: http://www.economist.com/node/16943895?story_id=16943895&fsrc=scn/tw/te/rss/pe.

To learn more about authentication anti-counterfeiting technologies, visit: http://www.xstreamsystems.net/.