Medical Device Link.

SECURITY PACKAGING SUPPLEMENT

An independent survey backs up PMP News’s study: the pharmaceutical industry considers counterfeiting and diversion “serious threats.”

FDA reports that the number of counterfeit-drug cases increased tenfold between 1998 and 2004. The World Health Organization estimates that 10% of all medicines in the world are fakes. The Center for Medicines in the Public Interest puts that estimate at 13% and predicts that by 2010, the counterfeit market will generate revenue in the amount of US$75 billion.

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These estimates are not being taken lightly by the pharmaceutical industry. A 2006 survey by Clarescent LLC polling more than 30 pharmaceutical executives found that more than 93% of the respondents rated brand protection as an important issue. Half of the respondents, who perform a broad set of functions at 14 companies, stated that brand protection was one of their most important issues. Such importance can be attributed to the changing face of an industry driven by increasingly complex supply chains, global manufacturing locations, the increased role of the Internet as a channel to the patient, increasing price arbitrage opportunities, and increasing sophistication of gray marketers and counterfeiters. As one pharmaceutical executive said, “If I hand carry a package across the street, it gets there. If I mail it to another country, who knows?”

Solutions to help address counterfeiting and diversion issues are nascent and evolving. By one measure, there are already more than 300 individual technology suppliers for product authentication and theft prevention, largely with roots in other industries. Many unique solutions exist, such as taggants, enhanced packaging, nanoencryption technology at the tablet level, and others, each with its pros and cons and best suited to particular contexts.

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Two noteworthy innovations in this domain come from NanoInk and Tagsys. NanoInk provides a set of capabilities to nanoencrypt information on individual tablets, while Tagsys teamed up with West Pharmaceutical Services to integrate anticounterfeiting measures into the glass vial seal.

RFID, which is being piloted by a few pharmaceutical companies, is often considered an anticounterfeiting measure. We believe this is a misconception. While it has benefits, these are in the area of track and trace—it gives manufacturers better visibility of their inventory throughout the supply chain. As a security or anticounterfeiting measure, RFID has yet to prove itself, especially as there have been known cases where it has been compromised. Additionally, its implementation requires behavioral changes through much of the channel, making its implementation difficult and effective only for the largest players that can influence channel behavior.

The Clarescent LLC survey reveals that regulatory impact, impact on capacity, the longevity of the anticounterfeiting measure, and impact on unit price are some of the most important attributes in selecting a solution. These issues require a cross-functional perspective to select the best solutions.

Helpful will be a layered approach composed of multiple technologies with a capacity to evolve.

We offer the following recommendations to pharmaceutical company managers:

• Recognize that the security solutions field is evolving, as are the counterfeiters.

• Realize that multiple technologies may need to be incorporated.

• Encourage downstream-channel partners to change procedures to allow for certain technologies.

• Anticipate the regulatory impact of new technologies.

• Select technologies that have the capability to evolve.

• Focus on security, not just track and trace.

• Develop anticounterfeiting measures proportionate to the level of risk—with tablet-level security linked to an Electronic Product Code being the strongest measure.