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Counterfeit pharmaceuticals can cause problems far beyond brand damage and trademark infringement, as Aaron McDonald learns from two industry insiders.
Pharmaceutical companies carry a lot of responsibility on their shoulders. While patent protection encourages their work on innovation, applying for and then defending trademarks is equally important. If counterfeits are able to slip through the cracks, it can lead to serious damage for consumers—potentially even death.
David Lossignol, Global Head of Trademarks at Sandoz International GmbH (Germany), a subsidiary of the Novartis Group, says counterfeiting is an issue for all types of products that it sells, from generics to biosimilars and mature brands.
“The biggest and growing threat we face is the prominent availability of counterfeit medicines on the Internet—on rogue online pharmacies, but also on social media and commercial platforms,” he explains.
Mr. Lossignol says the company has noticed a growing issue with off-label use of certain products, such as Omnitrope (somatropin, a synthetic growth hormone sometimes used by the bodybuilding community); tramadol, a pain reliever; and alprazolam, a tranquillizer.
“This demand outside the legitimate supply chain creates an ideal environment for counterfeiters,” he says.
Citing a European Union Intellectual Property Office report, Mr. Lossignol says that counterfeit medicines cost the EU pharmaceutical industry €10.2 billion (US $12.4 billion) a year in lost sales. Further, pointing to reports from the Pharmaceutical Security Institute, the World Health Organization (WHO), and the World Customs Organization, he says that falsified medicines are on the rise.
“Demand outside the legitimate supply chain creates an ideal environment for counterfeiters.”
GSK is also experiencing an increase of counterfeiting instances, says Jenny Barker, Director, Global Anti-Counterfeiting at GSK (UK). The global healthcare company has a dedicated team working on anticounterfeiting, reporting to Ms. Barker and focused primarily on addressing the threat to patient safety. She adds that counterfeiters will target the market leaders and small packages of high-value products, and are primarily operating in countries where IP enforcement is weak.
“We are also grappling with the problem of increased use of e-commerce by the counterfeiters coupled with the difficulty of tracing the source of those selling via these platforms,” says Ms. Barker.
Mr. Lossignol believes that the main driving force of this trend is that counterfeit pharmaceuticals provide a profitable business, while penalties remain low—because “most people, including legislators, associate counterfeits almost exclusively with an economic impact. Rarely do they take into consideration their critical impact on patients and consumers, which is particularly relevant when it comes to counterfeit medicines.”
As counterfeiters do not care about the health of patients, the company fears that fraudulent products may damage its reputation and harm patients.
While counterfeit drugs continue to be accessible, there are significant threats to public health. This can include antimicrobial resistance (AMR), disease complications, and even death. According to Mr. Lossignol, WHO estimates that AMR could kill 10 million people per year by 2050. Counterfeit medicines are recognized as contributing to AMR, since they may have the wrong amount of an active ingredient, none at all, or a different one. He explains that in many cases, they are not manufactured, transported, or stored correctly.
According to Ms. Barker, the International Criminal Police Organization has reported that more than one million people die per year as a result of counterfeit pharmaceutical products—either because they contain harmful ingredients or because they contain no active ingredients.
“Apart from the very real risk to patient safety and putting patients and consumers’ lives at risk,” she says, “counterfeit products also affect the global economy by creating an underground trade that deprives governments of revenue for vital public services and imposes greater burdens on taxpayers.”
It is important for GSK to implement a strategy that looks at the whole counterfeit supply chain, according to Ms. Barker.
“To protect patients, our aim is to remove counterfeit products from the illegal supply channel as close to the source of manufacture as possible,” she says.
GSK’s anticounterfeiting program includes investigations, case linking, and intelligence gathering to trace the source of counterfeit products. This, coupled with a strong enforcement capability (working in partnership with government enforcement agencies), has led to many successes in closing down counterfeit manufacturing operations.
She says the GSK team works closely with online platforms to address the online sale of counterfeit drugs. GSK also has many of its trademarks recorded with various customs authorities as part of its border protection program.
“However, it is national and international governments, law enforcement, and public health and industry associations worldwide that have the primary responsibility to address counterfeit healthcare products and to ensure that effective legislative and regulatory measures exist,” Ms. Barker says.
GSK collaborates with these bodies to encourage coordinated action in reducing counterfeiting, she adds. GSK also uses protection features which are applied to labels to identify products and help distinguish genuine products from counterfeits.
In the case of Sandoz International GmbH, a Novartis Group anticounterfeiting team has built strong intelligence, prevention, and enforcement capabilities aimed at monitoring (online and offline), detecting, and investigating cases of suspected counterfeits.
“They lead or participate in enforcement operations in multiple jurisdictions, and they regularly manage to close down illegal manufacturing sites producing Sandoz International GmbH/Novartis Group counterfeit products,” comments Mr. Lossignol.
Consumers also have a role to play in preventing counterfeit pharmaceuticals, although this isn’t necessarily easy to achieve, he says. One way is by making purchases through traditional distribution channels and avoiding online pharmacies unless they are legal and state-endorsed.
Mr. Lossignol concludes that the fight against counterfeiting requires a huge effort from all stakeholders.
“The impact of counterfeiting on the global economy is disastrous: innovation, employment, and long-term economic growth are definitely affected,” he says.
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