Did you know making counterfeit Viagra is up to 2,000 times more profitable than dealing hard drugs? In fact, a $1,000 investment in counterfeit prescription drugs can result in a $30,000 return, which is 10 times the profit rate of trafficking heroin. Pharmaceuticals are in high demand, and the punishment for fake pharmaceutical dealing is lower than for narcotics. It is no wonder the market for counterfeit pharmaceuticals continues to grow larger than many realize.
For example, Interpol’s flagship pharmaceutical investigation, Operation Pangea, reports it seized 2.4 million fake and illicit pills in 2011; in 2015, the total number of medications that officials seized jumped to 20.7 million.When hospitals and clinics experience a drug shortage, they often look outside of the regular supply chain, creating opportunities for criminals to push fake pharmaceuticals.
In 2012, hundreds of cancer patients took what they thought was Avastin, a monoclonal antibody cancer treatment, only to learn that the drug they obtained lacked the active ingredients. This past April, the U.S. Food and Drug Administration (FDA) received reports of fake Botox in clinics all over the country. With counterfeiting posing a constant threat, brands can turn to packaging manufacturers that specialize in anti-counterfeiting technologies and new innovations to keep products safe. Pharmaceutical professionals will be able to see these solutions and more at the Healthcare Packaging EXPO (Las Vegas Convention Center; Sept. 25–27), co-located with PACK EXPO Las Vegas 2017.
A GLOBAL ISSUE
Worldwide pharmaceutical sales reached $1.1 trillion in 2015, according to PMMI’s 2016 Pharmaceutical and Medical Devices trend report. Experts estimate that the global counterfeit drug market ranges from $75 to $200 billion and, in some instances, make up half of all drugs sold in some low-income countries. Because they often sell at a lower price, counterfeit drugs are a dangerous source of unfair competition and can cause financial harm to both branded and generic drug manufacturers. Counterfeit pharmaceuticals are one of the most commonly cited problems for U.S. pharmaceutical manufacturers trying to enter foreign markets. The prevalence of counterfeits requires legitimate manufacturers to dedicate considerable resources to ensuring the security of the supply chain for genuine drugs, ultimately raising the price of medicines for consumers.
Fake pharmaceuticals can be found all over the world. The Regulatory Affairs Professional Society cites Brazil, China, Guatemala, India, Indonesia, Lebanon, Peru and Russia as countries that are major players in producing, selling and distributing counterfeit drugs. In 2015, 90 percent of all counterfeit medicines were shipped from China, Hong Kong and Singapore. More than 40 countries have introduced track-and-trace laws to help regulate products as they pass through the supply chain, and by early 2018 more than 75% of the world’s prescription medicines will be legally protected, according to the PMMI report.
WHAT'S CAUSING THE PROBLEM?
Consumers may choose to purchase fake drugs online because they cannot afford to visit a doctor or get medicine from a pharmacy, but studies show that about 90 percent of drugs purchased online come from a different country than the claims made on the website. Other times, patients will purchase drugs from internet pharmacies, which often buy drugs from other countries with loose regulatory systems. PMMI’s 2016 Brand Protection and Product Traceability report found that medicines bought over the internet that conceal their physical address are counterfeit in more than half of cases.
The drug industry is a target for counterfeiting because pharmaceuticals have high value and high utilization, and because the complex development process means large amounts of chemicals cross borders. Many of those countries do not have the same regulatory requirements as the United States. The World Health Organization estimates that about 30 percent of countries worldwide do not have a functional drug regulation agency equivalent to the FDA.
Anomalies in cross-border drug pricing have created a market opportunity for fake pharmaceutical traffickers. For example, a drug may sell for $20 per vial in Brazil but $10 a vial in Argentina. Third-party traders will interrupt the supply chain, diverting the drugs from to Brazil to make an extra $10. This results in lost revenue for the pharmaceutical industry and means patients in Argentina need to find alternative means of getting their drugs, explained Gary Parish, President of Complete Inspection Systems Inc.
PROTECTION IN PLAIN SIGHT
The first layer of protection pharmaceutical packaging professionals can implement is an overt anti-counterfeiting solution, which is easily visible. Examples of overt solutions include holograms, serial codes and barcodes. The problem with holograms is that counterfeiters easily duplicate them, but serial codes and barcodes offer more security. For instance, Complete Inspection Systems produces unique barcodes for pharmaceutical packages that can hold up to 50 percent more data than standard barcodes.