IN most countries today, the penalties for digital content piracy are significantly more severe than those for selling counterfeit drugs.
Governments need to acknowledge and address the gravity of the situation before more lives are put at risk.
The World Health Organisation predicted that counterfeits account for about 10 per cent of the US$500 billion pharmaceutical industry. This is forecasted to reach US$75 billion by 2010 by The Centre for Medicines in the Public Interest in the US. With the number of counterfeit drugs growing at an unprecedented rate, the problem is not only costing firms lost revenue; it is also costing people their health or even their lives. Perhaps just as damaging is the loss of faith in the firms and industry dedicated to providing life-saving medicines.
To combat counterfeit drugs the industry is examining simple, easily interpretable and cheap markers for authenticity such as bar codes, holograms and watermarks. I am particularly excited by what I see as one of the most promising options, the use of radio frequency identification (RFID) technology to build an electronic pedigree (e-pedigree) that can confirm the authenticity of medicine as it moves from manufacturing through the supply chain. Asia is home to around 60 per cent of the world's population. It is also home to some of the world's largest, fastest growing economies. Unfortunately, Asia is also home to a vast and under-reported problem - counterfeit drugs.
Counterfeit drugs are a threat to global health and a particularly serious issue in developing Asian countries. The problem is prevalent due to weak drug regulation and enforcement, scarcity and/or erratic supply of basic medicines, unregulated markets and unaffordable prices.
In developing countries, we have seen the emergence of dangerous counterfeits which result in increasing fatalities each year. Studies revealed that about 10 per cent of drugs on the market in South-east Asian economies are counterfeits, reaching 85 per cent for some brands.
Even wealthier, developed countries have fallen victim to the counterfeit trade despite strong regulatory mechanisms in place. The popularity of the Internet has fuelled a new global marketplace, providing an avenue for the sale of counterfeit drugs. Internet sales can account for as much as 50 per cent of sales. While some Internet pharmacies are legal operations, requiring prescriptions and delivering medicine from government-licensed facilities, there are others that operate illegally without prescriptions and peddle counterfeit products for unlawful gains. This threatens the health of those who seek cheaper, stigmatised or unauthorised treatments.
The most frequently counterfeited drugs in the developed countries are lifestyle medicines such as hormones, steroids and antihistamines. Advancements in RFID technologies continue to mature with a push towards standardisation for item-level tagging, essential in drug authentication. In item-level tagging, each container of drugs is assigned with a unique, secure identity which is protected and available only to manufacturers and their supply chain partners. This unique identification is known as an Electronic Product Code (EPC), and was developed by EPCglobal, an organisation involved in the development of industry-driven standards that support the use of RFID.
With the use of RFID in e-pedigrees, the wholesaler will be able to authenticate the drug by verifying the unique EPC assigned to each packet of drugs when the drugs arrive at the warehouse. The retailer can do the verification when the drug arrives at the store and conduct the final verification before the consumer leaves with the purchase. This effectively prevents criminal groups from slipping their fakes into the legitimate drug supply chain around the world. More and more pharmaceutical firms are seeing the return on investment (ROI) in RFID implementations. Stock outage can be reduced as RFID is used to support replenishment cycles in the supply chain. It also brings about mid- to long-term cost reduction, incremental sales, brand protection, anti-counterfeiting, public interest and consumer services. Most importantly, consumers are protected from non-genuine drugs.
RFID also represents the most secure and efficient method for drug authenticity throughout the supply chain. Firms like Purdue Pharma and Pfizer have already begun using RFID technology to track their respective drugs, OxyContin and Viagra. According to Frost & Sullivan, RFID sales revenue for healthcare and pharmaceuticals will rise almost sixfold, from 2004's US$370 million to US$2.3 billion in 2011. The healthcare market is likely to see swift uptake of RFID technology due to easily demonstrable benefits beyond ROI.
Without a doubt counterfeit drug syndicates are a serious threat; even more so than other piracy because it can go unnoticed if nothing is done. But there are ways to address this threat and we hope that the industry can work together to do so.
The writer is marketing manager identification, NXP Semiconductors, Asia-Pacific.
