The pharmaceutical industry is faced with a complicated paradox. As healthcare providers and governments try to put standards in place to protect medicine as it becomes more affordable and accessible, counterfeiters are innovating just as quickly to profit off the sale of bad drugs masked as reputable brands. Worldwide, five to seven percent of all commerce is counterfeited. On one end of the spectrum, areas of the United States are in the process of adopting standards for serialization, ePedigrees and more, albeit at the pace that any important legislation is able to move from concept to law to implementation in our health systems. On the other end of the spectrum, the chances of picking up a prescription in a developing nation like India and having that drug be counterfeit can be as high as fifty or sixty percent. Neither end of the spectrum is where we want to be as an industry.
The low barriers to entry make pharmaceuticals an attractive market for counterfeiters – extremely lucrative sales for not much more than switching the labels on pill bottles or mixing prescriptions into different packaging. But what can be a quick sale for a counterfeiter can mean millions of dollars in lost sales for a pharmaceutical company, the complete destruction of their brand or worse, risking the health and well-being of their consumers. Counterfeiters aggressively adjust their tactics as they learn more about the different security features in place, the substrates and inks that are used and more. They’re innovating just as aggressively as healthcare providers and brands can’t wait for the government or law enforcement to sort out how best to take control. The bottom line? Pharmaceutical companies need to proactively protect their brands.
What’s at Stake without Brand Protection?
The first and greatest mistake a brand can do is nothing. If a company ignores any indications that their product is being compromised, the problem will only continue to rise for them. And when we monetize the cost of doing nothing, companies on average are losing 5-7% of their bottom line globally if they’re not putting measures in place to protect themselves. And that’s the best case scenario for those companies – if they’re selling into underdeveloped markets with counterfeiting percentages as high as forty, fifty or sixty percent, their entire company could go under.
A number of options exist for pharmaceutical companies looking for a brand protection program that can protect what can be a wide variety of products. These can range from ultra-covert authentication on medicine bottles, to serialized QR codes that consumers can scan with their smartphones, to invisible track and trace markings and more. Ultimately, however, the value proposition is the same: an investment in brand protection technology isn’t just a quick fix, it’s something that yields years and years of value as a brand maintains its image and establishes a deterrent for counterfeiters that clearly indicates it’s not worth their trouble.
Taking a Layered Approach
With every company and brand facing a different set of threats from counterfeiters in their respective markets, there can be no such thing as a cookie-cutter approach to brand protection. The first step needs to be an assessment of the risk and issues the brand is facing. For example, consumers noticing their medicine’s packaging has been tampered with, healthcare providers finding that liquid drugs like morphine have been diluted or, even worse, complete knock-offs of the brand’s product finding their way onto the market. These and everything in between will call for different protective measures.
For brands to be completely protected, brand protection providers encourage a layered approach with covert markers and imaging technology – like the KODAK TRACELESS System – that insures against counterfeiters detecting and replicating the countermeasures in an effort to remain players in the black market. Only with a comprehensive end-to-end solution can brand owners fully mitigate the risks of counterfeiting as well as product diversion, another huge issue for the pharmaceutical industry. This includes the layering of overt and covert countermeasures on packaging, closure seals, shrink sleeves, labels and more, allowing for easy and cost-effective authentication as a product passes through the various channels – from manufacturing to distribution to healthcare providers, clinics and pharmacies.
Brands can further extend brand protection capabilities to their patients and end users by putting overt codes on products they can scan with a smartphone. These codes are printed with specialized inks that brand owners can authenticate themselves, providing a layered covert protection measure that “hides in plain view.” You’ll find them implemented everywhere from brand loyalty programs involving some level of marketing benefit for the consumer to authentication deployments in high-risk countries. Global programs such as these allow drug manufacturers to collect important information on whether scanned codes match up with ERP sales and channel incentive data, as well as validate the authenticity of pharmaceuticals appearing in different geographies. They can thus better detect trending issues that could lead to formal enforcement actions against counterfeiters and diverters.
Each brand owner has its own unique challenges within their distribution networks and patient dispensing points. By implementing a carefully-designed brand protection program with layered overt and covert countermeasures, incident detection systems and product traceability, drug manufacturers can demonstrate that they are doing everything in their power to reduce or eliminate the risk of black market threats. This, combined with proper investigative and enforcement actions, will enable brand owners to keep fake medicines out of the hands of patients around the world. Robust brand protection programs help companies maintain their bottom line, uphold their well-earned brand equity and, most importantly, deter counterfeiters from siphoning money and putting innocent patients at risk.
