Multiple Strategies and Technologies to Combat Counterfeit Drugs
- 1. MULTIPLE STRATEGIES AND TECHNOLOGIES TO COMBAT COUNTERFEIT DRUGS Authors: Sanjay Modi and Sanjeev Wadhwa An anti-counterfeiting The U.S. Food and Drug Administration (FDA) has seen a rise of strategy helps to counterfeit drug cases since 2000 when there were only six. In 2006, effectively detect the number of cases rose dramatically to 54 (Bernstein, 2007). The counterfeit products, market for counterfeit drug is approximately $40 billion (WHO, 2006). increase audit compliance, According to the Center for Medicines in the Public Interest, counterfeit and enhance supply chain drug sales globally will reach $75 billion by 2010. This represents an management capabilities. increase of 90 percent from 2005 (WHO, 2006) and will represent 14 This strategy can identify percent of the total drug market (Pitts, 2005). Furthermore, it is the multiple best-fit estimated that 10 percent of the global medicines are counterfeit. solutions for meeting a Approximately 60 percent of counterfeit drug cases occur in less- company’s requirements developed countries in which 25 percent of their drug supply is via Radio Frequency counterfeit (Morris, 2006). The largest producers of these drugs are Identification Devices Southeast Asia, Nigeria, Russia, Mexico, Brazil, and Latin America (U.S. (RFID), ePedigrees, label Immigration and Customs Enforcement, 2006). security, dosage unit level Counterfeit drugs are an increasing threat in the marketplace. These sub- security, nanotechnology, standard drugs affect human lives as the quality and/or type of drug is and other capable harmful to the patient. These products may not cure the targeted solutions to combat diseases and could possibly even kill patients. Also, they affect the counterfeiting of drug profits of the companies which manufacture the drugs. Pharmaceutical products. One item alone companies invest large amounts of resources to create drugs. They will not protect the spend up to 12 years and $1.2 billion on clinical development for drugs companies from counter- (Archarya, 2006). However, only 30 percent of drugs which are feit drugs, but one with a approved and marketed produce revenues that match or exceed initial multi-level approach will costs (DiMasi, 2002). Therefore, any counterfeit drugs sold as legitimate lead to safeguarding the drugs reduce the companies’ revenues and lead to lower profits. supply chain, prevent erosion of the brand There are five different types of counterfeit mechanisms in which drugs image, and increase are manufactured or distributed without proper regulatory approval and revenues. This will result do not meet the determined standards of safety, quality, and efficacy in decreasing the number (WHO, 2007): of counterfeit products in • No active ingredient (43 percent) the marketplace and improving patient safety • Low levels of active ingredient (21 percent) and enhancing product • Poor quality drugs (24 percent) authenticity and • Wrong ingredients (2 percent) identification. • Wrong packaging or source (7 percent) Counterfeiting can apply to both branded and generic products. In wealthy developed countries, expensive drugs such as hormones, steroids, and antihistamines are frequently counterfeited due to lifestyle preferences. While in developing countries, those used to treat life- threatening conditions such as malaria, TB, and HIV/AIDS are chosen to be imitated due to their relatively high costs. As this trend continues, | Multiple Strategies and Technologies to Combat Counterfeit Drugs | 1
- 2. other drugs such as anti-cancer and anti-virals might Therefore, counterfeit drugs are passed as real drugs be next on the list due to the high costs of these due to the counterfeiters’ abilities to reproduce items. drugs and the lucrative returns by the counterfeiters. Sources of Counterfeit Medicines C o u n terfeit A u th en tic Counterfeit drugs can be diverted and sold from 1 1. Logo background various channels within the drug distribution system 2 LO G O LOG O color due to its complexity. There is no enforced 2. Logo font not bolded 3. Colored protective government mandate to track the drugs efficiently 3 Logo Logo packaging on rim on top of bottle within the system which allows for openings for 4. Border type counterfeiters throughout the system. Drugs can be 5. Font size 4 6. Border size diverted from their original purpose and sold outside D ru g D ru g 7. Pill size and shape the regulated distributed channels. For example, free 5 N am e 8. Name of pill varies N am e samples to doctors may be sold illegally within the 50m g 6 50m g Can you tell the difference if one of the above items system. Patients may, in turn, sell their prescription were changed? drugs for a profit. Also, drugs sold for lower prices in various countries can be sold to other markets where 7 D P5 the price is higher. These drugs are not regulated 8 through safeguards as they are sold outside the normal distribution channels Figure 1: Difference between Counterfeit and Authentic Drugs The 1988 Prescription Drug Marketing Act (PDMA) introduced a need for paper drug pedigree to track As a result of illegal medical drugs within the system, the drug from manufacturer to end user. However, it the companies that manufacture and sell the has yet to be fully implemented throughout the authentic products incur large losses of revenue. This industry and supply chain due to the high record- decreases sales and profit margins due to other keeping effort needed to maintain this type of unauthenticated “substitute” products that people system. Incomplete paper pedigrees lead to are buying in place of the authenticated drug increasing the risk of counterfeit drugs in the product. Large inventory losses and write-offs are marketplace as the ingredients or products are not placed on the balance sheets due to routing leakages tracked within the supply chain. On the other hand, and medicines which were not purchased legally. As complete paper pedigrees help validate the noted earlier, these drugs threaten patient safety authenticity of the drug but counterfeiters are finding leading to possible deaths. There are audit and ways around this paper-based process. For example, regulatory compliance issues with counterfeit drugs illegitimate secondary wholesalers can prepare fake as they do not follow the regulated channels. paper pedigree documents which pharmacies detect Furthermore, the supply chain for the drugs is as valid. An increasing trend is to use tools and complicated due to higher inventory carryover processes to copy drug labels and packages. This leading to increased costs. The supply chain issues makes it difficult to identify the real drug from the push for an efficient and reliable tracking mechanism fake copy due to the striking similarities between the which has yet to be mandated by the industry or two. Repackaging is another way to bring expired or regulators due to high initial costs and lack of compromised drugs into the distribution system and industry standards. mix them with genuine drugs. Finally, the lack of tamper-evident packaging allows the original Anti-Counterfeit Strategies packaging to be reused for unregulated drugs An anti-counterfeiting strategy helps to effectively (HHS, 2004). detect counterfeit products, increase audit compliance, and enhance supply chain management The differences between counterfeit and authentic capabilities. This strategy can identify the multiple drugs can be difficult to detect unless one looks best-fit solutions for meeting a company’s closely at the bottle or packaging. These can be requirements via Radio Frequency Identification minor changes in the product container, label, or the Devices (RFID), ePedigrees, label security, dosage individual pill that can be hard to visually detect by unit level security, nanotechnology, and other capable the human eye. For example, a change in the type of solutions to combat counterfeiting of drug products. font, border type, or logo color is difficult to detect One item alone will not protect the companies from unless someone knows how they are packaged by the counterfeit drugs, but one with a multi-level approach manufacturer (Palmer, 2004; Genentech, 2001). | Multiple Strategies and Technologies to Combat Counterfeit Drugs | 2
- 3. will lead to safeguarding the supply chain, prevent training for the end-users. A study by A.T. Kearney erosion of the brand image, and increase revenues. believes implementation of a RFID system for a This will result in decreasing the number of manufacturer with $10 billion in prescription sales will counterfeit products in the marketplace and receive annual benefits of $20 – $55 million with the improving patient safety and enhancing product system excluding initial and recurring costs. A large authenticity and identification. It also meets the distributor with $40 billion in prescription product necessary increased audit compliance by reducing sales will have an annual benefit of $12 – $24 million the supply chain issues such as time to account and (Paddison, 2005). inventory tracking. Therefore, this leads to an In 2005, Pfizer announced it would use RFID tags on increased bottom-line by effectively locating its its Viagra® bottles which are sold in the United States. products within the supply chain from manufacturer GlaxoSmithKline took the initiative by planning to to patients. This enables the drug manufacturer to implement RFID tags on one of its anti-HIV drugs capture higher revenues for legitimate drugs in the within the next 18 months. Furthermore, Purdue marketplace. Pharma utilized RFID tags on Oxycotin® bottles to RFID better track and authenticate the medications (FDA, New trends in the industry are creating unique 2004). RFID tags can be embedded into the label of opportunities within the anti-counterfeiting market. the medicine bottle or within the blister pack to The FDA has also recommended that pharmaceutical companies start using RFID as a means of better tracking drugs. These are radio transmitters that can RFID be attached to drug packages, medicine bottles, or XYZ Pharma RFID active ingredient containers and scanned to emit an D ru g RFID N am e electronic product code. Individual packages of drugs 50m g XYZ or their respective ingredients can be monitored Pharma throughout the supply chain from manufacturers to distributors and wholesalers to pharmacies (Wyatt, A. Cartons of B. RFID Tag C. Blister Pack Drugs Medicine Bottle 2006). As a result of enhanced inventory management practices, RFID can decrease revenue losses as a result of stock-outs and drug expirations and create cost savings of $2 billion worldwide (Paddison, 2005). One major obstacle for RFID tags is the costs associated with the system. As RFID tags become more of a commodity, the prices for tags and readers will be significantly lower and lead to more cost 1 2 3 savings. Each passive tag costs $0.25 – $1.00 while Scanner Computer Server the each reader costs $500 – $3000. Furthermore, there is the need for other resources such as Figure 3: RFID Tags Embedded Within Cartons of Drugs, computers, networks, databases, and additional Medicine Bottle Labels or Blister Packs Benefits and Costs (M = Millions) • Large Manufacturer Benefits Costs — $10 billion in Type Total Annual Ongoing Total Costs One-time Annual Benefits Intangible Benefits One-time prescription Initially Long-term product sales Large Not $20 – $55 $20 – $55 1. Protect Overall $15 – $20 $20 – $40 $8 – $16 $35 – $60 $23 – $36 Manufacturer significant Supply Chain • Large Distributor — $ 10 bilion in 2. Prevent Stolen prescription and Lost Products $40 billion in product sales prescription Large $2 – $4 $10 – $20 $12 – $24 3. Decrease Recovery $9 – $20 $3 – $4 $3 – $4 $12 – $24 $12 – $24 Distributor product sales Costs of Lost or $ 40 billion in Recalled Products Source: Paddison, 2005 prescription 4. Protect Brand product sales Loyalty Figure 2: Cost and Benefits for RFID Implementations | Multiple Strategies and Technologies to Combat Counterfeit Drugs | 3
- 4. prevent easy removal. This is very similar to airline This will provide information on the “chain of initiatives to utilize RFID tags rather than traditional custody” of the drug and decrease counterfeit drugs barcodes to track the baggage location in real-time. in the supply chain. As the drug flows through the The tags have a read rate of 99 percent, whereas bar supply chain from manufacturer to wholesaler(s) to codes have a read rate of 85-90 percent. This higher pharmacy, each step is tracked via an Internet portal. read rate leads to less manual sorting due to In the ePedrigree system, the medical product’s unreadable bar codes. This also decreases the time information is verified and documented during each and costs in getting the bags to the customers. The step within a secure environment. Therefore, a current cost for bag retrieval is estimated to be $2.5 product’s path is followed in real-time via the portal billion a year by The International Air Transport to ensure it is coming into the system from a valid Association (Demerjian, 2005). source. A new data management infrastructure to store and share the data has to be implemented ePedigrees within the company. A few vendors are already Another development is the focus on ePedigrees to providing services for the new system in order to create a more efficient supply chain in a secure easily transition into this environment. environment. The PDMA states that pedigrees are required for all non-Authorized Distributor of Record The ePedigree shows detailed real-time information wholesale distributions (SupplyScape, 2006). In regarding the product and its distribution within the 2006, ePedigrees were implemented in only 200 supply chain. It provides general product information along with a tracking number for easier identification. As it travels from one location to another, it will ePedigree System provide the transaction details including names, addresses, and drug license numbers. It will also have Tracking Number the receiving person’s name and electronic signature. Date In addition, it will include details such as the production number and expiration date so it can Manufacturer Drug Information easily be traced back in the future for recalls or Special Handling Information quality checks (Bernstein, 2007). Wholesaler/ Manufacturer: Pharmacy Overt Strategies Name Name Pharmaceutical companies are experimenting with Address Address overt strategies such as optically variable devices Phone Phone (OVDs) that can help track/authenticate drugs. Some Email Email Wholesaler companies are testing holograms, color-shifting inks License No. License No. and watermarks that can help them authenticate Electronic Signature/ID medicine bottles and packages. Similar techniques Name Date and Time Production Number Expiration Date Pharmacy Figure 4: ePedigree System Tracks Real-Time Drug Information from Manufacturer to Pharmacy million medicine bottles and blister packs. In comparison, the number of prescriptions dispensed in 2006 was 3.7 billion (Lamb, 2007). As drug D ru g Dr shipments arrive within the various elements of the N am e u Na g Logo supply chain, ePedigrees are matched and signed to 50m g 50 m e m Lo g confirm and validate the authenticity of the drugs. Logo go Software programs show the detailed information of the validated drugs within the supply chain and their Logo specific location at various time periods. ePedigree will be utilized within all steps of the supply chain Figure 5: Color Shifting Logo — Changing the Viewing from manufacturer to retailer and customer. Angle Shifts the Color | Multiple Strategies and Technologies to Combat Counterfeit Drugs | 4
- 5. are currently utilized in safeguarding the U.S. the packaging. For the highest level of security, the currency. The currency utilizes multiple safeguards markers can be added to the individual pills in order which makes it difficult, time-intensive, and costly for to identify if the drug is counterfeit. The markers are counterfeiters. It utilizes a dual color-shifting ink, odorless, tasteless, and approved for human watermark, security thread within the paper, and new consumption. A quick test kit, similar to a pregnancy symbols on the bill. In 2004, the pharmaceutical test, can be performed in the field to determine the companies started using color-shifting ink that authenticity. The pill is put into a special receptor- changed color depending on the viewing angle so binding liquid, and a test strip is placed into the counterfeits can be easily recognized by members liquid. If the specified marker is in the pill, the strip downstream within the supply (Palmer, 2004). Others turns a specific color (Weinberg, 2007). Also, Kodak’s are experimenting with using inks or dyes and some Traceless® technology incorporates an odorless and are already using tamper-resistant packaging tape on colorless powder within the medicine packaging label some of their products. Also, there is a change to or within the drug ingredients. The package is read in raised printing in which letters are raised above the real-time with a patented handheld reader to paper for easy inspection and detection for authenticate the drugs. For medicine packaging counterfeits. labels, this method works with conventional printing methods and can be utilized during the Covert Strategies manufacturing process (Kodak, 2007). Companies are also shifting to covert strategies which utilize special devices to authenticate the Benefits drugs. Authentix utilizes a new method incorporating Pharmaceutical companies are more concerned about nanotechnology markers (50 nM to 5000 nM in size) brand image and reputation these days than ever which are mixed into the drug packaging and before. This is one of the key reasons to protect the individual pills. They can be specifically added to the supply chain by utilizing the latest technologies. inks, labels, and pill ingredients for easy detection. Counterfeit drugs can lead to drug recall and liability These markers have spectral properties that “light up” suits which can cost the company millions and billions when a light with a specific wavelength is placed on of dollars. Fen-Phen was recalled in 1997 and led to 50,000 liability lawsuits. The total costs for the recall A. Markers Emit Light at Specific Wavelength and lawsuits were estimated at $14 billion (Gilchrist, 2005). In addition, brand loyalty is compromised as consumers perceive additional risk when using a company’s products. It might take several months or years for a product to regain its market share D ru g depending on the severity of the initial damage. This N am e will result in lost sales and revenue along with the 50m g high costs of marketing and public relations to bring the drug back to the market (Paddison, 2005). An anti-counterfeiting strategy can better analyze Nanotechnology Specific Wavelength how these methods benefit the client most effectively Markers Light depending on business needs, requirements, desired B. Receptor Binding Test level of security, and geographic location. However, for this strategy to work properly, a multi-step Pill with approach has to be implemented because an Marker 3 Authentic individual strategy alone has not worked in the past. 1 2 A multi-level strategy uses complementing technologies that can provide the most protection for a company’s brand and the highest level of security. Counterfeit This will also result in additional costs as the technologies become more sophisticated and the Add Pill to Add Test Receptor Strip quantity of products becomes marked or tagged. A Binding Liquid basic foundation for protecting the Pharma Value Chain focuses on tracking methods such as RFID and Figure 6: Nanotechnology Markers Emit Light at Specific ePedigrees. The next step is to protect the medicine Wavelengths and Bind to Specific Receptor Binding Liquid bottles and blister packs with overt technologies by (Weinberg, 2007) | Multiple Strategies and Technologies to Combat Counterfeit Drugs | 5
- 6. Technologies Increased Layers of Protection 3 Individual Pills Covert Pill • Nano- Technology • Ink Markers + Increasing Costs Patented Reader Medicine Bottles 3 Blister Packs • Color Shift Ink • Hologram • Watermarks 3 Boxes RFID Overt and • RFID and ePedigree XYZ Pharma Pallets Figure 7: Pharma Value Chain — Shifting Strategies and Technologies from Overt to Covert Results in Increased level of Security at Higher Costs increasing safeguards such as raised fonts, color- All of these items will lead to better-guarded supply shifting inks and logos, holograms, and watermarks chain and costs savings. This will result in decreasing so they can’t be reproduced by other sources. The the number of counterfeit products in the final step utilizes covert technologies to protect the marketplace, improving patient safety, and enhancing individual pills, medicine bottles, and blister packs by product authenticity. It also meets the necessary incorporating nanotechnology markers and patented increased audit and regulatory compliance by ink markers and readers for authentication. By using reducing the supply chain issues. Therefore, this multiple safeguards into a specific product, it makes complementing strategy based on client’s needs it expensive and time-consuming for the leads to an increased bottom-line by effectively counterfeiters. Furthermore, higher risk geographic locating its products within the supply chain from areas for counterfeit drugs require enhanced security manufacturer to patient and reducing leakage during levels and increased layers of protection in order to the routing process. This enables the drug protect the Pharma Value Chain. manufacturer to capture higher revenues for legitimate drugs in the marketplace and protecting the brand reputation. Increased Layers of Technologies Protection Nano- Technology Pill Ink Markers+ Reader Protect Supply Maintain Brand Increased Layers Color Shift Ink Chain Reputation of Protection Holograms Watermarks + Increase Revenue Enhance Patient RFID RFID+ and Profits and Drug Safety XYZ Pharma ePedigrees Figure 8: Implementation of Multiple Strategies for Protecting the Supply Chain, Maintaining Brand Reputation, Increasing Revenue and Profits, and Enhancing Patient and Drug Safety 6
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- 8. About CSC’s Life Sciences R&D Solutions Enterprise Technology Integration (ETI) — Our ETI Our solutions span the entire range of drug Practice focuses on business systems strategy — we development, from basic research at the cellular and align the business system strategy to Business and molecular levels to human clinical trials of potential organizational strategies to ensure that technology is medicines that prevent and cure disease. CSC’s Life not implemented for the sake of technology; rather, it Sciences R&D solutions encompass: serves the business strategy set for R&D. Our solutions focus on: Strategy and Process Innovation (SPI) — Our SPI Practice links business and organizational strategies • Enterprise Content Management — We provide for R&D to deliver process innovation that solutions that help collaborate, control, and dramatically increases throughput in clinical comply to 21 CFR Part 11 and global regulatory development. Our proven solutions in this space bodies. Our expertise includes EDMS strategy, include: migration, optimization, eBLA, eCTD, SPL, and PIM. Our thought leadership in this space and our • Adaptive Clinical Trials — We provide consulting 14 years of expertise in this arena help our clients and industry expertise to reduce dead time achieve superior results. between phases. We effectively leverage modeling and simulation to reduce number of • Clinical Research Data Management — For patients in trials and help conduct in-silico trials, structured data, our team provides drug where appropriate — resulting in cost take-out development data management solutions that and shortened development cycles. are ICH, HL7, and CDISC compliant. These systems provide a better way to manage data • Phase I Outsourcing — Through our division, from labs, CRO’s, and imaging firms and enable Dynport Vaccine Corp. (DVC), we provide clients our clients to achieve significant efficiency and the ability to outsource entire Phase I studies. We productivity improvements for the R&D provide the program management, quantitative organization. measures to reduce time and costs, and proven process that enables clients to conduct more trials effectively. We currently manage 11 such For more information, visit www.csc.com/lifesciences. trials. CSC • In-Licensing — We implement strategies and Life Sciences Practice cutting-edge solutions to help pharmaceuticals 1160 West Swedesford Road, Suite 200 and biotechs take full advantage of in-licensing Berwyn, Pennsylvania 19312 to augment their pipelines. Our structured Unites States solutions ensure that no licensing opportunity is left unnoticed, and potential blockbuster opportunities are not given away to competition. • Bioinformatics Partnership — With the rise of commercial genomics, companies need to differentiate themselves from competition by efficiently managing biostatistics analytics and bioinformatics. CSC’s Life Sciences Practice serves as a strategic services partner to the client and provides standards driven bioinformatics solutions both through our U.S. and Indian operations and our strategic alliances with key partners. • Anti-counterfeiting Solutions — We leverage our expertise in defense, consumer products, and supply chain to deliver novel solutions for solving the expensive and ever-increasing drug counterfeiting issues. Our strategy and solutions go beyond the traditional RFID based solutions and provide quantifiable ROI. 8
- 9. About the Authors Sanjay Modi CSC Life Sciences +1.973.243.0023 smodi@csc.com Sanjay Modi works in CSC Life Sciences R&D Solutions and is based in New York City. He holds a MBA from The University of Maryland and a Bachelor’s of Arts degree in Biology from The University of Delaware. Sanjeev Wadhwa CSC Life Sciences +1.973.243.0023 swadhwa@csc.com Sanjeev Wadhwa is a partner and senior strategy expert within CSC Life Sciences R&D Solutions. 9
- 10. CSC 266 Second Avenue Waltham, Massachusetts 02451 United States +1.800.272.0018 Worldwide CSC Headquarters The Americas 3170 Fairview Park Drive Falls Church, Virginia 22042 United States +1.703.876.1000 Europe, Middle East, Africa Royal Pavilion Wellesley Road Aldershot, Hampshire GU11 1PZ United Kingdom +44(0)1252.534000 Australia 26 Talavera Road Macquarie Park, NSW 2113 Australia +61(0)29034.3000 Asia 139 Cecil Street #08-00 Cecil House Singapore 069539 Republic of Singapore +65.6221.9095 About CSC The mission of CSC is to be a global leader in providing technology enabled business solutions and services. With the broadest range of capabilities, CSC offers clients the solutions they need to manage complexity, focus on core businesses, collaborate with partners and clients, and improve operations. CSC makes a special point of understanding its clients and provides experts with real-world experience to work with them. CSC is vendor-independent, delivering solutions that best meet each client’s unique requirements. For more than 45 years, clients in industries and governments worldwide have trusted CSC with their business process and information systems outsourcing, systems integration and consulting needs. The company trades on the New York Stock Exchange under the symbol “CSC.” Copyright © 2008 Computer Sciences Corporation. All rights reserved. DS08_0528