Pharmaceutical companies are adopting technological interventions to combat counterfeiting


The lack of visibility in the supply chain as well as the absence of tools to differentiate between an original product and a counterfeit product is the main factor leading to the increase in counterfeit activities in the industry.

By Divay Kumar

Counterfeit products are a huge global problem and fake pharmaceuticals pose a serious threat to the entire healthcare industry. Recognizing these issues, pharmaceutical companies are focusing on adopting technological and digital interventions to counter this problem. This is not just the loss of revenue for companies, but the greatest threat to the lives of people using counterfeit drugs.

The lack of visibility in the supply chain as well as the absence of tools to differentiate between an original product and a counterfeit product is the main factor leading to the increase in counterfeit activities in the industry.

During the COVID-19 outbreak, the market was flooded with sudden high demand for personal protection, specific medicines and hygiene products. The critical moment has been misused by counterfeiters to introduce their stock of counterfeit products into the market.

In raids by the International Criminal Police Organization (INTERPOL) in 90 countries, authorities seized nearly 34,000 substandard fake drugs, sprays and masks. Law enforcement has identified over 2,000 websites/links to counterfeit products related to COVID-19 worldwide. The operation also revealed an increase in unauthorized antiviral drugs and the antimalarial chloroquine, vitamin C and painkillers among some of the most counterfeited products on the market. Additionally, the WHO has flagged the threat of fake COVID-19 vaccines circulating in the global market, and many have been arrested for administering fake vaccination campaigns in India.

The situation has been eye-opening for many pharmaceutical companies that are focused on short-term profits with lean supply chain strategies, contributing to supply chain vulnerability.

Obvious security features such as holograms, tampers, etc. have long been used to discourage the sale and purchase of counterfeits. However, with the improvement of digital printing, counterfeiters have become smart enough to copy them as well. As the counterfeit industry grows and fraudsters improve counterfeiting techniques, established brands, as well as startups, face a daunting challenge to deal with the situation.

Experts suggest that an ideal way to deal with the current situation and avoid future business disruptions is through digital transformation. They believe that while advances in technology have led to massive counterfeiting, technology itself is capable of solving this serious problem.

In order to solve this difficult problem, pharmaceutical companies are investing in new technological advancements. One such technology is the track and trace solution using the serialization method. It is a widely adopted and reliable technique applied by major pharmaceutical industries around the world. The technique involves assigning unique identifiers to each individual product at the unit level within manufacturing facilities.

These unique identifiers are usually unique codes printed on the primary, secondary or tertiary packaging of the products, mainly depending on the nature of the packaging and the preferences of the companies. They have two objectives: to improve visibility on the pharmaceutical supply chain, in particular during secondary sales (sales to the retailer) and tertiary sales (sales to the consumer). Second, it helps fight counterfeiting. End users can authenticate their purchases using the mobile app-based platform, by scanning codes at any stage of the retail chain.

Over the past decade, many countries have mandated the implementation of serialization in the pharmaceutical industry. Even India’s pharmaceutical industry, the third largest in the world by volume, is also expected to push serialization in the coming years. India’s pharmaceutical industry is growing at 17.7% annually, up from 13.7% in 2019-20, and is expected to grow three times over the next decade. The United States Trade Representative (USTR) has stated that nearly 20% of all pharmaceuticals sold in the Indian market are counterfeit.

To counter the problem of growing counterfeiting, pharmaceutical companies need to implement technologies that will provide end-to-end visibility into the movement of products.

It is very important to be sure that the medicines are genuine. Digital enterprises with cloud-based solutions provide pharmaceutical companies with advantages and capabilities to achieve excellence through operational efficiency and automated workflows.

Developments in AI (artificial intelligence), blockchain, big data analytics and data science have the potential to completely change the way pharmaceutical industries operate. By using advanced technologies, manufacturers can gain full control over their supply chains and track the movement of products until they reach their end user. These technologies are capable of bringing warehouses, distributors, retailers and consumers to an easy-to-interact, mobile/web-based app-based platform and deliver actionable insights that will help organizations optimize their planning and future production.

(The author is co-founder and CEO – O4S. The article is for informational purposes only. The opinions expressed are personal and do not reflect the official position or policy of Financial Express Online.)


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