Mark Davison is CEO at Blue Sphere Health Ltd and the author of Pharmaceutical Anti-Counterfeiting: Combating the Real Danger from Fake Drugs and Pharmaceutical Serialisation: Opportunity or Perfect Storm.www.bluespherehealth.com

Mark Davison

It is very difficult to measure the problem of counterfeiting accurately from year to year – by definition criminals don’t file tax returns or publish quarterly earnings. Data compiled by the Pharmaceutical Security Institute seem to show only a small increase in reported counterfeiting incidents during 2010 (1), but there are many caveats. The breakdown of the same data by region implies that Africa has around 2% of the counterfeit problem (2), but as the PSI acknowledges, this is likely to be an underestimate due to lack of enforcement infrastructure. In my opinion, formed by travelling in the region and by talking to local regulators and those working in the field, such as Roger Bate, Paul Newton and others, there is a largely unreported tragedy occurring in Africa and other developing regions because of the high prevalence of fake and substandard drugs.

Mark Davison is CEO at Blue Sphere Health Ltd and the author of Pharmaceutical Anti-Counterfeiting: Combating the Real Danger from Fake Drugs and Pharmaceutical Serialisation: Opportunity or Perfect Storm.

With the EU’s Falsified Medicines Directive and similar legislation under discussion in the US, legislators are at last moving to tighten the security of the drug supply chain in our developed economies. However, we need to remember that medicine is global and so is organised crime. Drug-resistant pathogens are emerging in Africa and Asia, partly due to the use of counterfeit sub-potent drugs supplied by international crime syndicates, and there is potential for these resistant forms of previously treatable diseases to spread to Europe and the US. As well as our moral obligation to help, enlightened self-interest should encourage us to equip developing nations with the necessary tools to protect themselves against fake drugs.

At Blue Sphere, we spend much of our time advising companies on technology choice and implementation, so we see a lot of proposals and claims from vendors. Many of these technologies are excellent (and I discuss the key approaches in my book “Pharmaceutical Anti-Counterfeiting: Combating the Real Danger from Fake Drugs”, Wiley, 2011) but none are a “solution” on their own. In general, we advise companies to use a layered approach combining several different security technologies. In our view, all packs should carry at least one covert technology, such as taggants, and a traceability data carrier such as a 2D barcode. These two features can often be applied in one combined step. Packs should also have tamper-evident security seals wherever feasible.

There will always be new technologies coming along that claim to be counterfeit-proof, but the key is wide-scale implementation. The need for new technologies is less critical than the need to universally adopt what we already have.

Packaging security is still critical. Digital traceability systems, whether full track and trace or end-to-end verification as proposed by EFPIA and others, are only one element of security. A visible printed code can be copied easily and the copy is indistinguishable from the original unless additional features are present on the pack or in the physical features of the code itself. However, there are many challenges in putting physical security on packs: available space, tools needed for verification etc. In Europe, where repackaging is common, a feature on an outer box may be discarded during parallel trade. The closer the authentication feature is to the active ingredient the less likely it is to become dissociated from the product during transit through the supply chain. We work with our customers to devise secure, risk-adjusted strategies that are compliant with upcoming regulations without breaking the bank.

Cost is undoubtedly still a critical factor when implementing a security solution because no one has an unlimited budget. Often, the cost of a new security feature is borne by the product and adds to the cost of goods sold, but this can be counterproductive because it leads to resistance from local market managers who have to bear the price rises. Most companies have poorly-connected management silos so the cost-benefit arguments for product security are often incomplete. Costs are incurred in manufacturing and distribution, and benefits are poorly quantified and only recognised in sales. Best-practice companies have seen that a centrally-coordinated and budgeted approach to product security works better in helping to join up these dots.

We also help companies to think the unthinkable: “How could a criminal break my product security?” rather than just “How can I get this technology to work?” This analytical approach often throws up major process improvements that more than pay for the new system. We also encourage clients to have a Plan B in place that enables a security feature to be rapidly replaced if it becomes compromised.

In my view, the universal application of a robust system today is better than waiting for a perfect solution in the future. We already have the tools today to make a big impact on the fake drug problem. There are also new technologies such as the “fingerprinting” of surfaces (based on intrinsic or printed features), which may offer additional potential, but for now at least, these are secondary systems.

Serialisation (coding of packs at the unit level) is the big step forward and is just around the corner. The arguments over data standards are largely a thing of the past: GS1 will be the underlying format, but there will be a rush to comply with serialisation deadlines of 2015 onwards so companies should not leave it too late to conduct feasibility studies and select vendors. We are already working with some companies on these studies now because they recognise that three years is not a long time to prepare.

Some companies have also realised that the need to equip lines for serialisation is a catalyst for rationalisation. I predict an accelerated move to newer, more efficient lines because older lines may not be cost effective to convert for unit-level pack coding.

In terms of a global or even simply a universal European anticounterfeiting strategy, the Falsified Medicines Directive is a giant leap forward towards a European system for digital security. The US will follow suit and we are already seeing other regional initiatives in India, China and elsewhere. I see the move towards universal traceability inevitable, although there will be bumps along the way.

For physical authentication features (e.g., holograms, inks, taggants), companies must be free to specify which technology they use, guided by legal requirements, rather than governments telling them exactly what to do. As soon as you a make a specific proprietary security feature mandatory, it becomes an easier target for counterfeiters.

A legislative strategy needs to be loose enough to be flexible to changing threats, but specific enough in that it creates a fair competitive environment. We also need to bear in mind the developing countries I mentioned earlier. We owe it to them to make sure they are included in global strategies. Governments and the big aid programmes need to be donating scanners and training regulatory officials, as well as continuing to provide drugs and vaccines.

1. Pharmaceutical Security Institute, “Incident Trends” (2011), 

2. Pharmaceutical Security Institute, “Geographic Distribution” (2011), 

Mark Davison is CEO at Blue Sphere Health Ltd and the author of 

Pharmaceutical Anti-Counterfeiting: Combating the Real Danger from Fake Drugs

Pharmaceutical Serialisation: Opportunity or Perfect Storm

Articles

It is very difficult to measure the problem of counterfeiting accurately from year to year; by definition criminals don?t file tax returns or publish quarterly earnings.

Applying Universal Anticounterfeiting Technologies

The full version of this counterfeiting feature can be read in the July issue of our digital magazine: http://www.pharmtech.com/ptedigital0710

The effects of counterfeiting are hard to measure, both in human impact and financial loss. Unless baseline data are established the effects of an anti-counterfeiting programme are therefore often difficult to demonstrate and it is impossible for a company to develop a successful and coherent anti-counterfeiting strategy. A baseline can be established using various methods, including test purchases and market surveys, but these must all be carefully designed to avoid sample bias. Once a baseline has been found, a company can then decide how best to protect each of its products. This should be done on a rational, objective basis that takes into account patient safety, revenue defence, legal compliance and cost.  

Once anti-counterfeiting strategies have been put in place, one important issue that needs to be considered is communication between a company's different divisions. Product protection costs are quantifiable and usually paid by manufacturing, but the benefits are often found elsewhere; for example, in increased sales at a distant subsidiary. As such, anti-counterfeiting should be controlled by someone senior enough to see the connections across the company.  

For authentication that requires consumer involvement, education also needs to be considered. Education and awareness about the anti-counterfeiting solution are critical because counterfeiters will be quick to exploit any confusion. There is no point using an overt feature if people don't know exactly what to look for when differentiating your pack from similar-looking copies. 

Pharmaceutical supply chains are global, but the regulatory environment for anti-counterfeiting is not. Fortunately, this is slowly changing with the FDA and the EU gearing up for new standards and legislation. In the EU, there is currently a number of implemented and pending national regulations, such as the French CIP 13 and the Italian Bollino system. However, the forthcoming EU Pharmaceutical package may eventually help to harmonise the situation within Europe by specifying EU-wide serialisation standards.  

For global track-and-trace to become a reality, a clear international compliance framework based on open technology is a critical first step. The involvement of GS1 as a neutral, consensus-based standards organisation has helped to keep most governments on parallel tracks for anti-counterfeiting, albeit they may be travelling at different speeds. 

Outside of the EU, there are serialisation regulations in Turkey (which have been slightly delayed) and similar regulations will also soon come into force in Brazil. Meanwhile, Malaysia already has its long-standing MediTag system of serialised holograms, while other countries have local labelling requirements that incorporate authentication elements. Some governments who are net importers of pharmaceuticals are also taking a more active role in their drug supply; for instance, the Nigerian regulator NAFDAC has opened offices in India and China to try to influence pharmaceutical quality at the source.  

Internationally, there has been some controversy over the role of the WHO IMPACT group and its links with pharmaceutical companies. Developing nations, in particular, would prefer to see a clear separation between intellectual property issues and counterfeiting. The issues addressed by IMPACT are fundamentally ones of patient safety, but semantics should not be allowed to derail their attempts to coordinate and harmonise the legal and technical approaches to anti-counterfeiting worldwide.  

As the US is the biggest pharmaceutical market, the main driver for a mass rollout of serialisation worldwide will probably be the FDA, which has adopted the serialised National Drug Code (NDC) as a standard numerical identifier for serialisation. The data structure of the sNDC is compatible with GS1 standards and the resulting clarity will catalyse some action from drug companies.  

Enforcing track-and-trace fully throughout the supply chain, however, will be a problem because of the inherent difficulty of reading codes or checking the authentication features for every pack at every transaction. One hundred percent coverage is impractical with any anti-counterfeiting system, but serialisation is a good start and the wider the net the harder it is for counterfeiters to evade it. Companies just need to make sure they keep checking for holes. 

Various false starts with different kinds of anti-counterfeiting technologies have led many companies to take a wait-and-see approach. Companies have invested to comply with national drug tracking regulations, such as those in France and Turkey, and have protected key products with targeted authentication initiatives, but many have not implemented serialisation across their entire product range. Most companies are now gearing up to do this, but will need to devote regular Board-level attention to anti-counterfeiting to develop and maintain momentum. Some companies have a person of real power with profit and loss responsibility in direct charge of product protection, but in most companies committed mid-level managers struggle to be heard above corporate background noise.  

A core, global, interoperable framework with optional additional layers of local flexibility is key to an anti-counterfeiting solution's success. Ubiquitous technologies tend to be quite long-lived, so once 2D codes become the standard data carrier, we will be using them for a while. The open standards on which serialisation is built will also allow integration of other complementary technologies such as RFID, which has yet to realise its potential, but offers many advantages, such as the ability to read multiple unit codes quickly and without unpacking shipping cartons. Many other technologies, such as on-dose technologies, are also being developed, and the worldwide rise of social networking and mobile telephony also holds interesting potential for the combination of authentication with marketing and customer interaction. 

In the future, non-digital authentication will become ever more important; codes can be copied and RFID chips cloned, so we still need methods that can obtain a definitive authentic/fake answer to the question "Is this product real?"

Despite the development of covert security technologies, overt solutions are still very important. Overt solutions are easy to locate and check, require no additional verification devices and also involve the consumer in the authentication process. They can also offer a high level of security in terms of how difficult they are to copy. Covert solutions, however, also offer a number of advantages, particularly during product recall situations. As such, it is beneficial to use both solutions when protecting supply chains. 

Some counterfeit products can be extremely difficult to distinguish from the genuine article with the naked eye. However, near-infrared chemical imaging (NIRCI) can measure the presence of known ingredients to provide assurance that the patient will at least receive the right drug in the right amount. There is a reasonable use of NIRCI for counterfeit analysis in the pharma industry, but the full potential of the technology has not yet been exploited. 

Although there is a growing trend to introduce serialisation, many companies still do not have serialisation capabilities because they are waiting for legislation to be finalised. Serialisation requirements and methods vary worldwide and it will be difficult to introduce a single global standard. Despite this, serialisation will become very prominent in the industry because it offers numerous benefits — key of which is full traceability. 

The effects of counterfeiting are hard to measure, both in human impact and financial loss.

Obstacles To Implementing An Effective Anti-Counterfeiting Strategy: Can They Be Overcome?

 The effects of counterfeiting are hard to measure, both in human impact and financial loss. Unless baseline data are established the effects of an anti-counterfeiting programme are therefore often difficult to demonstrate and it is impossible for a company to develop a successful and coherent anti‑counterfeiting strategy. A baseline can be established using various methods, including test purchases and market surveys, but these must all be carefully designed to avoid sample bias. Once a baseline has been found, a company can then decide how best to protect each of its products. This should be done on a rational, objective basis that takes into account patient safety, revenue defence, legal compliance and cost.

 Mark Davison. Managing Partner at Pharma Pieces.

Once anti-counterfeiting strategies have been put in place, one important issue that needs to be considered is communication between a company’s different divisions. Product protection costs are quantifiable and usually paid by manufacturing, but the benefits are often found elsewhere; for example, in increased sales at a distant subsidiary. As such, anti‑counterfeiting should be controlled by someone senior enough to see the connections across the company.  

For authentication that requires consumer involvement, education also needs to be considered. Education and awareness about the anti‑counterfeiting solution are critical because counterfeiters will be quick to exploit any confusion. There is no point using an overt feature if people don’t know exactly what to look for when differentiating your pack from similar-looking copies. 

Pharmaceutical supply chains are global, but the regulatory environment for anti-counterfeiting is not. Fortunately, this is slowly changing with the FDA and the EU gearing up for new standards and legislation. In the EU, there is currently a number of implemented and pending national regulations, such as the French CIP 13 and the Italian Bollino system. However, the forthcoming EU Pharmaceutical package may eventually help to harmonise the situation within Europe by specifying EU‑wide serialisation standards.  

For global track-and-trace to become a reality, a clear international compliance framework based on open technology is a critical first step. The involvement of GS1 as a neutral, consensus‑based standards organisation has helped to keep most governments on parallel tracks for anti‑counterfeiting, albeit they may be travelling at different speeds. 

Internationally, there has been some controversy over the role of the WHO IMPACT group and its links with pharmaceutical companies. Developing nations, in particular, would prefer to see a clear separation between intellectual property issues and counterfeiting. The issues addressed by IMPACT are fundamentally ones of patient safety, but semantics should not be allowed to derail their attempts to coordinate and harmonise the legal and technical approaches to anti‑counterfeiting worldwide.  

As the US is the biggest pharmaceutical market, the main driver for a mass rollout of serialisation worldwide will probably be the FDA, which has adopted the serialised National Drug Code (NDC) as a standard numerical identifier for serialisation. The data structure of the sNDC is compatible with GS1 standards and the resulting clarity will catalyse some action from drug companies. 

Enforcing track‑and‑trace fully throughout the supply chain, however, will be a problem because of the inherent difficulty of reading codes or checking the authentication features for every pack at every transaction. One hundred percent coverage is impractical with any anti-counterfeiting system, but serialisation is a good start and the wider the net the harder it is for counterfeiters to evade it. Companies just need to make sure they keep checking for holes.

Various false starts with different kinds of anti‑counterfeiting technologies have led many companies to take a wait‑and‑see approach. Companies have invested to comply with national drug tracking regulations, such as those in France and Turkey, and have protected key products with targeted authentication initiatives, but many have not implemented serialisation across their entire product range. Most companies are now gearing up to do this, but will need to devote regular Board‑level attention to anti‑counterfeiting to develop and maintain momentum. Some companies have a person of real power with profit and loss responsibility in direct charge of product protection, but in most companies committed mid‑level managers struggle to be heard above corporate background noise. 

A core, global, interoperable framework with optional additional layers of local flexibility is key to an anti‑counterfeiting solution’s success. Ubiquitous technologies tend to be quite long-lived, so once 2D codes become the standard data carrier, we will be using them for a while. The open standards on which serialisation is built will also allow integration of other complementary technologies such as RFID, which has yet to realise its potential, but offers many advantages, such as the ability to read multiple unit codes quickly and without unpacking shipping cartons. Many other technologies, such as on‑dose technologies, are also being developed, and the worldwide rise of social networking and mobile telephony also holds interesting potential for the combination of authentication with marketing and customer interaction.In the future, non‑digital authentication will become ever more important; codes can be copied and RFID chips cloned, so we still need methods that can obtain a definitive authentic/fake answer to the question “Is this product real?” 