Spotting the fakes
Faced with a growing counterfeit market, pharmaceutical companies are looking for more technologies to help them spot the fakes. Suja Nair reports
The Indian pharmaceutical industry is worth $ 6 billion and is growing at the rate of 10 percent, higher than the seven percent global industry growth rate. This figures only goes on to show the growing global demand for Indian pharma products. There is no disputing the life-saving nature of this industry, but there are instances where these life saving drugs become life taking, because they contain counterfeit ingredients. According to Ashish Sonal, CEO, Orkash Services, a management consulting and technology services company, “Since the past decade, the emerging markets, including India, have evolved as the major source of active ingredients for counterfeit drug manufacturing, posing severe risks to both domestic and international pharma companies. Various studies indicate that the incidence of counterfeits in some pharma products is as high as one in every five.” Sonal also says that though there have been no large-scale studies, industry experts estimate that the counterfeit market is around 15-20 percent of the nation’s total pharmaceutical market.
What exactly is a counterfeit drug? They are defined as drugs that have been re-labeled or are expired or defective. Their active ingredients are usually fraudulently diluted, adulterated or substituted. For more than two decades, counterfeit medicines have been identified as a growing problem constituting serious health risk to the user. The World Health Organization (WHO) estimates that counterfeits could account for more than 10 percent of the global medicines market. According to figures released by the Organisation for Economic Co-operation and Development (OECD), India emerges as the biggest culprit in the fake drug manufacture ie. 75 percent of fake drugs supplied world wide have their roots from India, followed by seven percent from Egypt and six percent from China. Supporting these figures, a research article in the Lancet said that in developing countries like India, 10-30 percent drugs are feared to be counterfeit. These figures show how serious the problem is. However a Maharashtra State Food and Drug Administration (FDA) official said that in a recent survey 7038 samples were tested by them of which only 633 samples were found to be ‘not of standard quality’. He said, “Of the 633 only 142 were found from Maharashtra and 491 were from other states. We have issued prosecution order in 107 matters ie. 20 in Maharashtra and 87 in other states.”
Giving further information he said that under section 27 and section 27 (a) of the Drugs & Cosmetics Act if a counterfeit medicine would amount to grievous hurt within the meaning of section 320 of the Indian penal Code (IPC), then such person shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to a term of life with fine not less than Rs 10, 000.
|“Since the past decade, the emerging markets including India have evolved as the major source of active ingredients for counterfeit drug manufacturing, posing severe risks to both domestic and international pharma companies. Various studies indicate that the incidence of counterfeits in some pharma products is as high as one in every five”
– Ashish Sonal CEO
|“The weak security in the supply chain, which many times involves very few people and no interaction at all with employees while transporting the materials, maybe the weakest link in the pharma supply chain”
– Alok Saxena Director (International)
Over the years there has been a steady increase in the size of the counterfeiting market. There has been an increase in the counterfeit medicines, containing narcotic drugs and psychotropic substances. Sonal avers that the counterfeiting of drugs is becoming a lucrative business especially with the entry of high priced drugs for lifestyle diseases. Commonly counterfeited medicines include Viagra, Lipitor, Tamiflu, Ambien, and Diflucan. Another example of the illicit market is for flunitrazepam often marketed as Rohypnol, a drug that is known as the date-rape drug. A similar counterfeit industry has developed for fenetylline (brand name: Captagon) which is illegally manufactured in South-East Europe and trafficked to countries on the Arabian peninsula. Alok Saxena, Dirtector (International), Elder Pharmaceuticals avers, “Disturbing but true is the fact that all dosage forms, across therapeutic ranges, stand affected by the loop of spurious manufacturers. Any segment with a popular drug stands the threat of counterfeits.”
Drug counterfeiting has matured in scale and capabilities over the last few years. These days, drug counterfeiters use more complex routes for shipment of their products. In addition to this, the emergence of Internet-based sales channels for counterfeit drugs, especially in the western markets, is making it all the more difficult to nab the kingpins of the trade. Sharing his views on the weakest link in the supply chain Saxena, says, “The weak security in the supply chain, which many times involves very few people and no interaction at all with employees while transporting the materials, maybe the weakest link in the pharma supply chain.” Elaborating on the problem, he said that criminals have been taking advantage of the inherent susceptibility of this system. The very nature of products moving across multiple locations over long distances and under the responsibility of various corporations leaves plenty of room for vulnerability.
On the same lines, Sonal believes that the weakest link in the entire illegitimate supply chain of counterfeit drugs is firstly, the retailer and secondly, the entity making the blockbuster profit which is also the conversion point (from legal to illegal products). He says that if we analyse the supply chain of the counterfeit drug sales channel, this group along with gray market distributors, mix the real drug with the counterfeit, substandard or expired drugs. This is how a counterfeit drug enters the legal supply chain and finally reaches the consumer.
One of the major factors leading to the increasing distribution of counterfeits is the facilitation of contact between suppliers and consumers through the Internet, which offers almost limitless marketing opportunities for counterfeit drugs. Illegally operating Internet pharmacies are among the main suppliers of counterfeits. Their number continues to rise and has long surpassed the number of licensed and accredited Internet pharmacies. Counterfeit drugs are also sent through postal and courier services. While it is possible to evaluate the extent of spurious drugs available through retail outlets, it would be worth while to explore the extent in other distribution channels, inter country commerce and individual therapeutic categories. Sonal says, “Incidences of counterfeits have been widely reported in solid dosage forms and of all dosage forms, tablets/capsules face greater threat of counterfeiting since their Active Pharmaceutical Ingredients (APIs) can be easily manipulated. Also, their logistics and supply chains are easy to manage. Having said that, there are also high instances of counterfeits reported in highly specialised treatment related products such as injections, intravenous liquids, and surgical consumables.” Elaborating, he says that counterfeiting is also rampant in medical devices such as heart stents, valves etc. Furthermore, whether a drug gets counterfeited also depends on the kind of disease it cures and whether it requires constant supervision of the doctor. Generally, blockbuster drugs and medicines catering to lifestyle diseases are open to greater risks of counterfeiting.
There is no doubt that the menace of counterfeiting needs urgent attention. There has to be a foolproof plan to check mate the advance of this cancerous growth that is slowly infecting the world. While counterfeits can be found in all regions, developing countries are more affected by these problems of counterfeit medicines. It is suspected that about a quarter of medicines used in developing countries are counterfeit. Thus to deal with this menace several technological tools have already been in use such as track and trace forensic technologies for internet based sales channels, RFID tracking of consignments, and authentication technological tools. Sonal says, “Orkash has developed advanced business analytics for designing and measuring the success of anti-counterfeiting initiatives, and also introduced track back forensic analysis for internet based sales channels and associated payment gateways. These are proving to be critical in plugging the most rampant means of selling counterfeit drugs.” He adds that they recommend a market intelligence driven investigative approach integrated with sophisticated analytics and forensics tools such as track back analysis of internet based transactions. Effective anti counterfeiting measures can be formulated only after de-complexing the entire supply chain of the illegitimate drugs and deciphering the value chains and bottlenecks of the counterfeit sales and distribution channels.
One such technological discovery that poses serious challenges to the counterfeit market is Radio Frequency Identification (RFID) technology. It is an auto-ID system. The technologies that fall under the auto ID are bar codes, smart cards, voice recognition, some biometric technologies like retinal scans etc., optical character recognition (OCR) and RFID. The aim of most auto ID system is to increase efficiency, reduce data entry errors, to make it more difficult for illegitimate operators to develop an entry point within the distribution network and to facilitate verification of the product chain of custody. RFID has been around since 1970s. In India Ranbaxy Laboratories was the first company to affix EPC/RFID tags in response to a Wal-Mart directive.
RFID is a generic term for technologies that use radio waves to automatically identify people or objects. There are several methods of identification, but the most common is to store a serial number that identifies people or objects and other information on a microchip. This microchip is attached to an antenna and an interrogator or reader with an antenna. The chip and the antenna together are called and RFID transponder or an RFID tag. RFID technology uses RFID tags affixed on cases or consignments, with a serialised electronic product code (EPC) for identification or detection of counterfeit drugs globally. This benefits all stakeholders like pharma manufacturers, health regulators and the pharma distribution chain, covering chemists and druggists, stockists and most of all the consumers. This technology helps in optimising the supply chain. RFID tags provide unique ID numbers that can be associated to specific manufacturing data, such as the date and time of manufacturing, the product lot numbers and information regarding which companies distributed the goods. When attached to cases and pallets of goods, such tags have the potential to prevent product counterfeiting, because at various points in a supply chain (from the manufacturer to a logistics company and on to customs, then to distributor sites and, ultimately, at retail sites) the tags can be read to ensure goods are authentic.
Another overt authentication feature adopted by pharma companies to tackle the counterfeiting market is the use of holograms, diffractive optically variable devices. Their ability to combine authentication with detection, have made them an integral part of the anti-counterfeiting strategies of pharma companies and enforcement agencies. Ever since Glaxo first used a tamper-evident hologram to seal packs of Zantac in 1989, many major drug companies have used holograms on at least some of their medicines in selected markets, employed as labels, seals, hot stamped patches, and blister foils. Holograms provide counterfeiting protection through continuous innovation, invention, and evolution in techniques have created increasingly complex devices that are easily recognised yet difficult to copy accurately. The evolving role of the hologram has also been accompanied by the increased use of the security device in combination with other authentication technologies. In such solutions, holograms often provide overt first-line authentication while covert features such as scrambled images, micro text, UV-sensitive or other special inks offer second-line authentication for trained examiners equipped with appropriate decoding equipment. Saxena feels that there is need for implementation of new technologies to protect the drug supply better as advances in technology lead to large-scale applications, physical security is critical to the deployment of this technology. To derive maximum value from an automated system, it must include a tamper-detection feature. Otherwise, a system will be monitoring tags only, without any assurance that the tags are still attached to their original items.
Stating different types of anti counterfeiting technologies Vikas Bhatnagar, Director Marketing, Lasersec India, says that holographic aluminium foil is one such important packaging material for pharma industry as tablets and capsules are packed with aluminium foil. In these the hologram is fused on the surface of aluminium foil along with security features which could never be imagined in the printing. It consists of invisible features which can be seen under special light. It also has micro letters where the size can be as small as 5 micron.
Bhatnagar says that they can also incorporate other security features, like Kinetic and Raster effects. He also mentioned holographic PVCs, that are widely used as a packaging material, holographic labels that are printing cut and self adhesive paper labels with embossed high security hologram along with variable security features. The security features are almost comparable to the best secured currency of the various countries. Another technological discovery is of Holographic ROPP cap a new product innovated by Lasersec for the first time in world. The Ropp Cap uses a fused hologram. Currently the product is not ready for commercial products but will be ready by next year.
Further Bhatnagar adds, “The best anti counterfeit product is the one which cannot be copied, is easy to adopt and cost effective. If copied there must be a long process to detect. In our opinion the most difficult task is to teach the user about the anti counterfeit features. However we must make people who are part of the pharma distribution chain and the doctor’s aware of anti counterfeit features.” The Maharashtra state FDA official feels that pharma companies need to concentrate more on foolproof packaging, making them more complicated so that there is no incidence of counterfeiting. The companies should use special holograms or other methods to make their products more unique thus making it more difficult for the counterfeiters to imitate. However the costs of these technologies are very high and are usually unaffordable for many. An industry insider avers that in order to tackle the problem of costly technology the government should increase the price of the drugs based on selective implementation.
Though there is technological advancement and invention to counter the counterfeit menace, there are many hindrances. Poor infrastructure or lack of proper technological support in majority of the states of India is one speed breaker in the implementation of advanced tracking systems. Dwelling on the ground realities, Sonal says, “Where India is concerned, the primary pain point is the ambiguity of the definition of counterfeit itself. Varying global regulation pose a significant risk with respect to this. Generic drugs produced by Indian pharma companies, which are cheaper as compared to their foreign counterparts, are often termed as counterfeits in international markets. With the end of an international border, the drug which is legal in one country becomes illegal or a counterfeit in the nation across the border. The risk-reward dynamics also plays a major role in propagating the counterfeit trade in India. With low risks of detection and high profit margins, innumerable faceless operators have posed significant challenges to drug regulators and pharma companies. To top it all, weak law enforcement and lack of appropriate consumer awareness makes the anti counterfeiting initiative all the more complicated.
All drugs are controlled substances, and there needs to be more stringent disclosure norms and regulation for the movement, import and export of drug consignments. Saxena says, “Government regulatory officers are professionally trained to keep constant vigil over the movement of counterfeit drugs. If there is passage of counterfeit drugs, it is immediately curbed right from the source and attempts are made to ensure that any rackets of counterfeit drug may not be able to take place.” However he feels that the government can take some more initiatives to improve the existing regulatory and legal system like adoption and enforcement of strong, proven anti-counterfeiting laws and regulations, increased criminal penalties to deter counterfeiting and more adequately punish those convicted, adoption of secure business practices by all participants in the drug supply chain and above all development of a system that helps ensure effective reporting of counterfeit drugs to the FDA. On the same lines the Maharashtra state FDA official says, “The marketing force of any company should be vigilant. Whenever there is a complaint the manufacturer should complain not only in the FDA office near to the manufacturer but also in the FDA office near to the place where counterfeiting has been reported. So that we can take cognizance of the complaint as soon as possible.”
Domestically, the Indian regulator has not implemented any significant initiatives for market monitoring and market surveillance. Sonal avers that there is no sharing of investigative findings, historical data, etc. and there is almost nil exchange of information with international counterparts. India needs to put in place a national level agency over and above the state level regulatory bodies and empower these organisations through budgetary allocations and skill building. With respect to the international networks of pharma counterfeiting, one of the biggest problem is that most of the efforts, resources and budgets of international investigative agencies have been diverted to terrorism and money laundering. This has resulted in anti-counterfeiting initiatives becoming a lower priority area. This is despite the fact that there is enough evidence to show that the organised crime networks active in international pharma counterfeiting are becoming a means for generating money for extremist activities.
Steps to be taken
Apart from violating copyright provisions and constituting an economic crime, counterfeit medicines also leads to loss of confidence in the national healthcare system. The use of counterfeit medicines leads to failures in therapeutic efficacy and safety and pose serious health risks to their users. The result of their use can entail therapeutic failure and, in the worst scenario, death because the products are of doubtful quality, safety and efficacy and their sources are not guaranteed. Trafficking in counterfeit drugs should therefore be considered a potentially life-threatening crime. Weak drug regulation, weaknesses in enforcement of existing regulations and lenient punishment for counterfeiters are the main factors for the growth of the drug counterfeit industry. Effective action also requires competent national drug regulatory authorities with a sustained resource base that will ensure control and regular inspection of entities involved in the manufacture, trade and distribution of pharmaceuticals. These actions at the national level need to be complemented by strengthened concerted international preventive and investigative efforts. National drug regulatory authorities should cooperate effectively in interdicting counterfeit medicines in international commerce. Drug regulatory authorities, law enforcement agencies, manufacturers of pharmaceuticals, professional associations of medical practitioners and pharmacists, as well as consumer protection groups need to work in concert to identify counterfeit medicines that are in national distribution channels and their sources, so that adequate preventive measures can be undertaken. Without cooperation of all concerned, we stand no chance to overcome this problem.
As Sonal points out, “To effectively handle counterfeiting of drugs, regulators need to undergo a tactical shift in their approach from the conventional methods of raiding manufacturing hubs and convicting the foot soldiers. The focus instead has to be on drivers of demand, intelligence on distribution and sales channels, and the organised crime entities that control these channels.”
One another important step that can be taken against counterfeiting would be to provide training to consumers, drug procurements agencies and chain pharmacies against the menace of counterfeit medicines. Anti counterfeiting measures can only be successful if there is full cooperation between regulators, industry and consumers. After all, with a common foe, it is better to combine forces for faster results.