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THE DANGERS OF COUNTERFEITING


More broadly, the World Health Organization has estimated that between 8 and 10 percent of the world pharmaceutical market is made up of counterfeit drugs. In some cases in Asia, Africa and Latin America, counterfeit drugs amount to up to 30 percent of the market. Te entire counterfeit drug market is estimated at over $75 billion. Furthermore, the US-based Centre for Medicines in the Public Interest (CMPI) has estimated counterfeit drug commerce to grow 13 percent annually through 2010, which is nearly twice the rate of legitimate pharmaceuticals, and this growth in counterfeit medications will generate $75 billion in revenues—a 92 percent increase from 2005.


While illegal diversion oſten takes a back seat to counterfeiting, it is viewed by many security experts as the catalyst for counterfeiting to take place. Criminal elements may first test the supply chain loop holes by introducing illegally diverted product (product intended for sale at a lower price in other countries, expired product, product sent for compassionate use purposes, etc.) into the supply chain. Once they have been successful in this effort, they will oſten migrate to counterfeit products given easier availability and lower cost than the authentic, albeit diverted, product.


It is clear that pharmaceutical manufacturers, the pharmaceutical supply chain and unsuspecting patients are under attack by sophisticated and well-funded criminal elements who seek to profit from counterfeit and illegally diverted medications, with no regard to the detrimental impact that such actions have on the health and well-being of patients. Unfortunately, the counterfeiters and diverters seem to be winning many of the battles, if not the war.


Given that it is the manufacturers’ products and the health of the patients they serve that are most at risk, manufacturers shoulder the burden to implement protective measures against counterfeiters and diverters, protect patients and thereby raise the pharmaceutical supply chain to a higher level of integrity. Manufacturers must fully realise that the enemy in this war is highly motivated and resourced. Traditional methods of brand protection are still necessary and valuable, but this new war requires that traditional weapons be supplemented and extended. Manufacturers must fight these organised criminals with everything at their disposal, including state-of-the art technologies that protect the integrity and therapeutic benefit of each and every dose, if they are to stem the tide of counterfeiting and illegal diversion.


Manufacturers have traditionally focused on securing product through on-package


“ THE ENTIRE COUNTERFEIT DRUG MARKET IS ESTIMATED AT OVER $75 BILLION. FURTHERMORE, THE US-BASED CENTRE FOR MEDICINES IN THE PUBLIC INTEREST (CMPI) HAS ESTIMATED COUNTERFEIT DRUG COMMERCE TO GROW 13 PERCENT ANNUALLY THROUGH 2010, WHICH IS NEARLY TWICE THE RATE OF LEGITIMATE PHARMACEUTICALS, AND THIS GROWTH IN COUNTERFEIT MEDICATIONS WILL GENERATE $75 BILLION IN REVENUES—A 92 PERCENT INCREASE FROM 2005.”


strategies, of which the most common include colour-shiſting dyes, holograms, 2-D barcodes, tamper-evident seals and serialisation. Covert on-package tactics are also used and include threads, taggants and RFID. While these tactics provide a strong first level of defence, counterfeiters have shown the ability to replicate virtually all elements of pharmaceutical packaging, including boxes, bottles and blister packaging. Oſten times, the quality of the illicit copies is so good that only those who have responsibility for the actual packaging of the product at the manufacturer’s plant can determine the authenticity or lack thereof.


Contributing to the need for extending protection beyond the package is the fact that most, if not all, on-package brand protection tactics become ineffective when a product is repackaged, a process that occurs the vast majority of the time in the US pharmaceutical supply chain and one that remains supported by the EU via parallel trade.


For these reasons, the best approach to fighting counterfeiting and diversion is a brand security strategy that includes a combination of on-package and on-dose tactics. On-dose technologies are typically grouped into overt (visible with the naked eye) and covert (special detection tools required) technologies. Colour schemes, on-dose printing and special marking


56 World Intellectual Property Review November/December 2010


schemes are common overt on-dose brand protection tactics. Unfortunately, counterfeiters are adept at mimicking any aspects of the dose they can readily see, including security features.


One overt on-dose brand protective weapon available to manufacturers is taggants, which are chemical or physical markers that can aid in authentication of a medication. Tey generally consist of microscopic particles, built up in many layers. Primarily used as an on-package security tactic, taggants are expanding into the on-dose security offering.


NanoEncryption™ technology is another on-dose brand protection weapon that can be implemented immediately by manufacturers to protect brands and patients, since it does not require an investment by downstream supply partners to be effective.


Developed by NanoGuardian, NanoEncryption technology adds no additional chemicals or materials to the dose, and is achieved by making purposeful manipulations in the coatings and gelatin used in the manufacturing of tablets and capsules, respectively. Tese purposeful manipulations are micron and nano-scale in size, and result in overt, covert and forensic-level security features on each individual dose.


While the overt and covert NanoEncrypted features allow in-field authentication of every


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