Sunday, August 06, 2006

Business Europe: Fighting Fakes

Around the world, counterfeit drugs -- both prescription medicines and over-the-counter products -- are a significant and growing problem. Analysts forecast that sales of fake prescription medicines will reach $75 billion by the end of the decade. That would nearly double current levels and would outstrip the annual growth of legitimate pharmaceutical sales. This trend threatens public health as well as drug makers' bottom lines.

The World Health Organization estimates that up to 10% of the world's pharmaceuticals may be counterfeit. In parts of Eastern Europe, Africa and Asia, this figure is believed to be greater than 50%. The Council of Europe recently revealed that EU member states reported 96 fake-medicine cases in 2004, up from just one or two per year during the 1990s. In America, 58 cases were reported in 2004, up from nine in 1997. But given the difficulties in detecting counterfeits, these figures are believed to be just the tip of the iceberg.

At their most benign, counterfeits are identical (i.e., therapeutically correct) copies that are illegally manufactured and then sold to an unsuspecting public, either on the Internet or by being illegally introduced into the supply chain. More often, however, the active ingredient in the phony drug is either diluted or wholly absent. Users might as well swallow flavored chalk.

Some impostors are hard to spot because they occur insidiously: They simply fail to deliver the supposed health benefit, rather than causing a new malady. Still, the health risk to the consumer from forgeries can be serious, even fatal. In 2001, 66 deaths in the U.S. were attributed to the counterfeiting of the generic antibiotic Gentamicin.

Pharmaceutical fraud can be indirectly harmful, too. In some parts of Asia, up to 50% of the packs of antimalarial drug Artesunate don't contain enough active ingredients. This helps to spread the disease as it builds resistance to the treatment. Growing evidence suggests that highly organized criminal enterprise is behind this trade, in some cases with connections to terrorism.

Current security devices, such as holograms or color-change inks, are easy and quick to copy. Laboratory techniques for identifying fake products are only useful after the fact and once the alarm has been raised -- they do not prevent the bogus drug from reaching patients when the forged packets and pills are of high quality and thus unsuspicious. Detection is laborious, and questionable products must be sent to a lab for forensic testing.

Drug makers and regulators have common goals: to ensure the integrity of the supply chain, to prevent counterfeiting and to respond rapidly to cases of forgery -- e.g., recalling a product from the market. For now, though, there is no common approach.

Government is trying to help, but legislation can prove problematic. The U.S. Congress in 2003 passed a law creating a "drug pedigree" for products considered at risk. It works by stipulating that a document must follow products as they move through the supply chain. The date for implementation is the end of this year, but many drug companies believe that's unrealistic.

Pedigrees are not foolproof. Like drugs, they may be falsified. The U.S. Food and Drug Administration would like to see electronic pedigrees implemented. Software makers already offer "track and trace" products that connect between two points in the supply chain. In time, these programs might make an end-to-end "e-pedigree" possible. But there will still be a major sticking point: Who will oversee the supply chain, which no one person or firm owns from end to end?

There are other technology solutions. These include tamper-proof sealants for packaging, new color-change inks and radio frequency identification, or RFID. The FDA is touting RFID, believing it offers significant security benefits. However, the technology is costly and not yet fully reliable or readily usable with certain kinds of bulk packaging.

Both the FDA and the European Pharmaceutical Industry Manufacturers' Association are encouraging industry to adopt an approach known as mass serialization. Mass serialization is a method of adding unique, machine-readable codes containing a serial number to each pallet, case or packet of medicines. But there is much debate about how to implement serialization. Should the number be in the form of a bar code or RFID? Should it be stamped on the pallet the medicine is shipped on, or on individual bottles or packets of drugs, or both?

As the FDA has noted, there is no single magic answer to counterfeiting. The solution will require a mix of technologies and approaches.

Though companies are still thinking through their preferred approach, the Italian and Belgian governments have introduced mandatory item-level serialization using simple barcodes for prescription medicines in their markets. The rationale was to address reimbursement fraud. But once in place, mass serialization can also enhance patient safety and product security. For example, Belgian pharmacists already have begun using mass serialization to verify products online.

Despite the availability of a range of solutions and the tangible need, the health-care industry will find it difficult to implement a global solution on its own without government and regulator guidance. In the meantime, drug companies are pursuing a variety of disparate measures, all well intended but significantly short of a unified response.

In today's environment, adopting a multilayered security strategy is the most effective approach. Technology has advanced sufficiently that all pharmaceutical products supplied could be supported by a level of anticounterfeit protection. Realistically, however, some products are more at risk than others, requiring companies to prioritize. Regulators such as the FDA are providing guidance, which is welcome in the short term. But it can only be viewed as a temporary palliative until standards are agreed across markets. More information about counterfeit drugs at business intelligence portal

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