Taking the next step in brand and patent security

Reports of counterfeit and illegally diverted pharmaceuticals continue to escalate as global economic woes press patients to look for cheaper medications. In October, anti-counterfeiting law enforcement initiatives co-ordinated by Interpol led to the shutdown of 290 websites, seizure of 11,000 packages and confiscation of more than one million counterfeit tablets and capsules, including antibiotics, steroids, anticancer, anti-depression, anti-epileptic and diet medications.

This most recent effort, entitled, ‘Operation Pangea III’ expanded on last year’s effort, in which 24 countries co-operated to seize 167,000 pills. While some of the increase in confiscated counterfeits could be attributed to a greater number of participating countries and an improvement in detection tactics, it is more than a little daunting and certainly hints strongly at a fast-growing problem.

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. 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.

While illegal diversion often 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 often 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 strategies, of which the most common include colour-shifting 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. Often 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.

“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.”

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 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. They 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. These 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 dose (tablet, capsule or single-use vial cap) at any point in the supply chain, the forensic-level, nano-sized NanoCodes provide an additional level of authentication and comprehensive tracing information on each and every dose, including product information (strength, expiration date), manufacturing information (location, date, batch, lot number) and distribution information (country, distributor, wholesaler).

The process to decrypt the NanoCodes is non-destructive and can be completed within minutes, yielding the manufacturer with additional proof of authentication and a wealth of dose-level tracing data. NanoEncryption technology provides manufacturers with an unsurpassed ability to fight both counterfeiting and illegal diversion with a single on-dose weapon.

In order be proactive in the war against counterfeit and illegally diverted medications, manufacturers must take the fight to those who mean to harm them and their patients, by aggressively defending their IP and proactively monitoring the supply chain for intrusions of counterfeit or diverted product.

One approach to supply chain auditing is data mining of manufacturer, wholesaler, distributor and retail pharmacy ordering patterns to look for discrepancies; NanoGuardian has launched a program directed specifically at the medication being dispensed to patients.

NanoGuardian’s Closed-Loop Protection Program combines the on-dose authentication and tracing benefits of NanoEncryption technology, statistical modelling and a proactive pharmacy auditing program to assist manufacturers in detecting counterfeit and illegally diverted products that have entered the supply chain. This reduces the risks to brands, companies and patients. Counterfeit drugs impact the entire global supply chain, including manufacturers, governments and honest supply chain members.

But none are affected more so than the innocent and unsuspecting patients who rely on these medicines for their health and well-being.

Pharmaceutical manufacturers must continue their commitment and strengthen their focus on securing products and protecting patients by implementing comprehensive security strategies, including on-dose technologies that can have an immediate impact. By doing so, manufacturers can gain significant ground in the war against counterfeiting and illegal diversion, protect the reputation of their products, and ensure that patients continue to receive the medicinal benefits they expect and need.

Dean Hart is executive vice president at NanoGuardian. He can be contacted at: dhart@nanoink.net