Counterfeiting is a hot issue not only because it hits vendors in the pocket but because of the public health/safety implications.
Product counterfeiting ranges from fashion, such as Dolce & Gabbana handbags, high performance bike frames such as Specialized Bikes to faking innovative drugs such as Viagra.
The Israeli onlline business daily “The Marker” recently ran an item on drug counterfeiting, pegging the volume of drug counterfeiting in Israel at 80-100 million sheqels/year. The source for the number is the Israeli Ministry of Health, the World Health Organization and an organisation called “The Center for Pharmaceutical Security” (המכון לביטחון פרמצבטי) I could not find any reference to this organization online – but from the name it sounds like a pharmaceutical industry lobby.
The core issue is public health and safety. This is why I personally believe that anti-counterfeiting supply chain initiatives such as ePedigree are well-intentioned but ineffective countermeasures to this threat. I believe that the interest of public health and safety (you can be killed on a defective road bike frame…) requires involving consumers at the point of sale.
Israeli MK Plessner is sponsoring a supply-chain anti-counterfeiting law that would make pharmacists policemen responsible for enforcement. It is a misdirected and stupid idea. It will not contribute to public health – since most of the counterfeiting is not OTC in a Superpharm but online – drugs like Viagra and Cialis and certain anti-cancer drugs are all sold over the Internet.
1) The numbers from the WHO and other organizations like OEC are inflated and based on naive calculations of 7% of world pharma manufacturing. I would be careful estimating pharmaceutical counterfeiting damage based on top-down revenue calculations – I would be much more impressed with even small samples based on damage to end-users caused by counterfeit products.
2) In many cases – vendors don’t object to counterfeiting since it may not directly impact their sales or even increase their sales from the free publicity. Consider the case of fake DG handbags you can get in NYC on the street for $10. This does not diminish the threat to public health from fake drugs since people can die from a fake version of Viagra.
3) Supply chain compliance is the way the industry is going – if you look at the California ePedigree law. However – like most American laws – the issue is not prevention and public safety but compliance to government regulation. From conversations with pharmaceutical manufacturers – I believe that they as a rule are more concerned with compliance than prevention and will implement ePedigree to some degree or another in order to comply with California law.
3) There is a simple and practical method of preventing pharma counterfeiting at the point of sale – using a unique bottle number that a consumer can call in to a central database and get a quick readout on his cell phone if the product is genuine or not
Read more on my post Threat modeling for the pharmaceutical Industry
Good post, and one that I largely agree with.
On the issue of stats – rounded-up figures covering large areas do have to be taken with a pinch of salt. In a study we published recently we show a preference for localised studies of drug quality / counterfeiting, which tend to be more useful.
However, a lot of these studies show extremely high rates of counterfeit and substandard drugs – at least in poor countries – and more and more fake drugs are being caught at EU borders. So the problem shouldn’t be ignored just because a few stats are a bit lazy and prone to exageration.
On the issue of ePedigree – you’re spot on, the issue here is identity preservation. The end user should be able to choose brands which offer them the ability to confirm that the package is genuine – like, as you say, a unique numbering system. However, in certain countries I think it’s ok for the pharmacist to check the products with this kind of system so long as they do so at the point of sale. Pharmacists in the UK, for example, are often liable if they sell fakes, and I’d be happy standing behind a counter while the pharmacist runs over a unique barcode which checks that the item is genuine.
Julian
I believe that a lot of the stats are being driven by vendors and media people quoting vendor PR agencies. You will notice that DG (Dolce & Gabbana) do not appear to be protesting the free publicity from fake handbags on 49th street in NYC. The point is that fake pharmaceuticals, fake bike frames and fake automotive parts are a threat to public health and safety and as you said – especially in poor countries. This is why I believe that a cheap (and even free) service for bottle numbering is a good consumer driven mechanism for helping protect public health. In African countries like Ruanda there is a very high penetration of cell phones and a cell phone is a great device for querying a unique bottle number database. The pharmas could give it away for free in Africa and do an important public service.
Thanks for the input!
Danny Lieberman