The COVID-19 vaccine: A developing tale of black and cornered markets

Aug. 12, 2020
If the data and recipes were compromised by a foreign adversary, that could be used to corner markets on ingredients, components and tools. The result could be price gouging the world market for the drug or withholding the drug altogether.

What’s the single most valuable product in the world? 

That’s generally an impossible question to answer, except during exceptional times when a single product becomes the most coveted thing on the planet. It’s difficult to think of the last time that happened — you probably have to go back to the race to the atomic bomb. It was a single product that all of the wealthiest countries on earth wanted to get their hands on, because the one that got it first would dominate the world.

We are in a similar situation today, where there actually is a clear answer to the identity of the most valuable product in the world: a COVID-19 vaccine. Thankfully, unlike World War II, the world is generally united around creating and sharing that single most valuable product. On the flip side, unlike the A-bomb, there will also be a burgeoning black market for the vaccine, because it will be relatively easy to steal and sell, thanks to the dark web, online pharmacies and other channels. And, there will likely be multiple generations of the vaccine from different manufacturers, ensuring that there will be no shortage of opportunities for black marketeers to get their hands on the “newest” most valuable product in the world.

Unfortunate potential outcomes

Considering the value of a vaccine or treatment for COVID, it is unquestionable that nation states are putting resources in place toward the acquisition of any data related to it. Most of the important work related to vaccine development is occurring in academic and medical research facilities. Unfortunately, those institutions have traditionally had poor security and cyber defense postures. This is precipitated by poor budget allocation and often the cultural and open philosophy of those institutions. As a result, it is likely that the nation state offensives will be successful in obtaining the coveted data or recipes related to COVID cures. 

If the data and recipes were compromised by a foreign adversary, that could be used to corner markets on ingredients, components and tools. The result could be price gouging the world market for the drug or withholding the drug altogether. 

A developing black market

How will the black market for a COVID-19 vaccine develop? To gain some perspective, it’s useful to look at a recent parallel: the black market for hydroxychloroquine. There was an enormous amount of hype around hydroxychloroquine as a possible COVID-19 therapy earlier this year, draining stocks of the drug as some doctors dramatically ramped up prescriptions. In April, during the height of the hype, our security analysts found dark web sites selling hydroxychloroquine for as much as $43 per pill (compared to less than $1 per pill from a legitimate pharmacy). These were long-standing and highly regarded sellers (buyers rate dark web sellers just like they rate sellers on eBay), so we had a high confidence level they were offering the actual drug. There also were many scam sites selling fake versions of the drug, or even raw hydroxychloroquine powder. One of the key tipoffs of a scam is when the seller has a new account and few, if any, ratings. Another tipoff is when sellers claim to have very large stocks of the drug, since it’s unlikely they could coordinate a massive theft of it.

The inevitable black market for legitimate COVID-19 vaccines and therapies will likely develop in the same way as other prescription drug black markets — through “diversion” of the drugs off the pharmaceutical supply chain. This means drugs will be stolen at the manufacturer, distributor and retail stages of the chain, or in transit. The most common conduit for diversion is insiders — people who can walk out of the building with the drugs, or even approve bogus orders or prescriptions. 

These thefts can be pure freelance jobs, where an insider has the technical knowhow or connections to sell stolen prescriptions on the dark web, internet pharmacies or other channels. More commonly, though, they are the work of organized crime. In this latter case, the insider is still the threat, but does not participate in the marketing of the stolen material. This is a much larger problem than the freelancer scenario, since virtually any insider with appropriate access has the skills to steal medication for organized criminals — no need to even know what the dark web is.

How much will a dose of COVID-19 vaccine cost? That’s anyone’s guess at this point. But if a single pill of hydroxychloroquine cost $43 in April, it’s safe to say the price on a single dose of proven vaccine, or even a proven therapeutic, will be at least an order of magnitude greater. 

Protecting against drug diversion

The pharmaceutical black market has been around a long time, but it has never been easier for insiders to monetize stolen pharmaceuticals than it is today. And, no need to get involved with illicit narcotics dealers — monetization is as simple as creating an online account or, even easier, shipping the stolen goods to some anonymous criminal who pays you for your efforts.

For members of the pharmaceutical supply chain, this creates a number of issues around public health, brand damage and lost revenue. Tracking and tracing remains a largely paper-based process, which makes it difficult to drill down with the granularity required to identify the sources of diversion. However, the first step to solving a problem is understanding what the problem is —so identifying sellers offering legitimate forms of a vaccine or drug is the first step toward understanding the scope of the problem. From there, other techniques can be employed to narrow down how the drug made its way onto the black market: Are there insider recruiting efforts underway by organized criminals? Can we “work” with the black marketeers to identify the source of the stolen drugs…perhaps even identify the lot from which the drugs came? Can we employ military-intelligence-style techniques to gain further information on where the supply chain diversion occurred?

It is a given that a black market will emerge for COVID-19 vaccines and therapies. However, that does not mean manufacturers, distributors and retailers can’t take steps to dramatically increase the “risk of getting caught” for would-be insider threats. In a world where it’s never been easier to monetize stolen pharmaceuticals, raising this risk for insiders is the single most valuable preventive measure companies can take to combat theft of the world’s most valuable products. 

Top image courtesy of Markus Winkler via Unsplash.com.

About the Author

Kurtis Minder | co-founder and CEO