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European Biopharmaceutical Review

Counterfeit Chain: A Global but Local Effort

Heightened trade globalisation has led to increasingly lengthy and complex pharmaceutical distribution chains. Intensifi ed competition and the growing presence of generics have augmented the use of external suppliers at almost every stage of the supply chain (1-3). All this has made it much more diffi cult for pharmaceutical companies to maintain a viable supply chain, often resulting in supply disruptions caused by the appearance of substandard intermediaries such as active pharmaceutical ingredients (APIs), as well as competing counterfeit or falsifi ed drugs (see Figure 1).

In particular, the major presence of substandard APIs and counterfeit drugs in regions such as Asia has progressively become an international concern and remains a threat to patients globally, as roughly a quarter of the world’s falsified drug sales occur in the US and Europe (2,4).

Although multiple global, regional and domestic initiatives have recently helped decrease the presence of substandard intermediaries and counterfeit drugs, we are still left with a problem. In March 2013, Interpol teamed up with two dozen of the largest pharmaceutical companies to fund a threeyear Pharmaceutical Crime Programme to stem the presence of counterfeit branded and generic drugs.

Each company must work to prevent substandard substances from entering its own supply chain, ensuring that it is not used to manufacture finished goods. Organisations are engaging in multiple activities to discourage the presence of competing counterfeit products, such as product tracking, complex packaging, improved disposal of unused medicines, increased surveillance of primary and secondary distributers, and monitoring of distribution (1,3,5). However, these solutions are only viable if local regulatory, technology and compliance stringency will allow this. A lack of suffi cient global harmonisation means that at present manufacturers must tailor their strategies to reduce the presence of counterfeit substances to the region or country of distribution, incurring a huge cost.

Costly Practice
Although reliable data is unavailable, the World Health Organization (WHO) has estimated that approximately 10 per cent of the world's pharmaceutical drugs could be counterfeit, with far higher rates present in developing countries (25-50 per cent) (6). Roger Bate – who has published a detailed study on falsified and substandard drugs – estimates that 80 per cent of these drugs are present in mid-income countries. Online sales have boosted this trade, as nearly 50 per cent of drugs sold online are considered to be counterfeit (2).

Moreover, the manufacture and distribution of counterfeit medicines is costly. In 2010, the Centre for Medicine in the Public Interest estimated that this supply of counterfeit drugs costs the industry up to $75 billion (5). Clearly, this loss is intensified by the considerable threat that falsified drugs pose to the health and safety of patients. Although much work has already been done, trends show that the presence of counterfeits is likely to continue growing over the next few years.

Global Impact
Recent estimates suggest that among more developed countries with sophisticated regulatory and enforcement systems, the incidence of counterfeit products is extremely small if the market value is considered (lessthan one per cent). However, the presence of even a few counterfeit drugs in these markets can have a huge impact. Although it is thought that Asia, Latin America and Africa incur the highest incidence of counterfeits on sale, this is difficult to quantify (7).

The Pharmaceutical Security Institute (PSI) collects data on the total number of annually reported counterfeit drug incidences, including illegal diversion and theft occurrences. PSI reports that Asia, Latin America and Europe are most associated with counterfeit products. As pointed out by PSI, the regions that are more frequently linked to incidents do not necessarily have weak enforcement and inspection programmes. Countries in these regions are often much more effective at detecting counterfeits through law enforcement and inspections by local regulatory agencies. Regions with suggested low incident levels may do so due to a lack of stringent law enforcement, regulatory processes and funding, for example Africa (see Figure 2).

Counterfeit incidences have also been characterised by therapeutic area. Year after year, drugs in the genitourinary, anti-infectives and central nervous system (CNS) therapeutic areas are typically associated with the most counterfeit medicines. Pfizer’s Viagra – prescribed for the treatment of erectile dysfunction – falls under the genitourinary group, and is thought to be the most widely faked drug. Medications for the treatment of malaria and HIV are also widely counterfeited, while hormones, cytostatics and CNS drugs were associated with the biggest increase in counterfeit incidence in 2012 (see Figure 3).

The use of falsified medicines in the oncology space has recently been well publicised, since fake batches of Bevacizumab with no active ingredient entered the US and European Union (EU) supply chains. In August 2013, oncologists in the US were charged with illegally importing misbranded, non- Food and Drug Adminsitration (FDA) approved cancer medications, including Zometa, Kytril, Taxotere, Gemzar and Eloxatin. Additionally, in April 2013, an investigation conducted by the Medicines and Healthcare products Regulatory Agency (MHRA) resulted in the seizure of approximately £1.6 million worth of unlicensed drugs, which included the opiate Tramadol, the tranquiliser drug Diazepam, and vials of testosterone (10).

Counterfeit APIs
There is a much larger volume of counterfeit APIs in the global supply chain than final drug products. These APIs may be used to make otherwise legitimate final products, posing a great risk to patients. Over the years, there has been a shift in manufacturing supply chains – none more so than in the production of raw materials and APIs. In a relatively brief time, emerging markets have become essential players and today the majority of APIs (70-80 per cent), including counterfeits, are made in less stringently regulated markets, such as China and India (11,12).

Although there is now a severe reliance on these markets for APIs, they clearly remain a weak spot in the complex supply chain. Multinational corporations (MNCs) are propelled to buy APIs from these markets to drive down the cost of goods sold and to satisfy local government initiatives. National government guidelines in emerging markets encourage local drug manufacture, but often do not provide the necessary regulatory environment to ensure satisfactory production and product quality. For example, in China, the State Food and Drug Administration (SFDA) regulates pharmaceutical manufacturers, but not manufacturers of chemicals, who often make APIs (11,12).

Falsified or substandard APIs from these markets are sold online, through local brokers and at major international fairs. Although most MNCs will choose a partnering API supplier based on its fundamental manufacturing capability and product quality, they are still largely driven by short-term financial incentives. Low-cost generics and less regulated end markets, such as sub-Saharan Africa, are two groups that remain the most affected.

Inspections and Cooperation
To tackle this, MNCs take the responsibility for API standards by inspecting the local sites and only buying products from correctly certified exporters. However, local corruption – often through the use of resident brokers – allows for the presence of mislabelled or substandard APIs to enter the supply chain. In fact, it has been estimated that Western pharmaceutical companies are misinformed about the identity of manufacturing sites of 39 per cent of drug substances purchased from China (12-14).

Regulatory bodies in the US and Europe are putting a greater emphasis on increased foreign site inspections. In the US, the infrequency of foreign site inspections has long been a sore point with US Congress. The European Commission has recently implemented a Falsified Medicines Directive updating its rules on API import. The update forces companies to ensure their foreign (non- EU) API suppliers are enforcing Good Manufacturing Practice (GMP) regularly. The written submission required per product approval is an additional cost they must cover, unless the ex-EU site is based in a country that has approved mutual recognition agreements in place (15,16).

However, to fully tackle the global issue of counterfeit APIs, strong cooperation from countries such as China and India is critical. Local regulatory, customs, law enforcement, judicial and industry leaders must all be incentivised to stamp out this problem. This will include costly activities, such as data collection and coordination on legislation, as well as the enforcement of appropriate penalties.

Since 2008 the Life Sciences Innovation Forum Asia-Pacific Economic Cooperation has proposed and regularly updated an anti-counterfeit medicines initiative. They have worked closely with agencies such as the SFDA and National Institutes for Food and Drug Control to provide guidance on repelling counterfeits in the region. The initiative encourages raising public awareness and the sharing of best practices and expertise among relevant bodies, especially on detection methods, the use of mobile laboratories and serialisation (4,10,14).

The Indian government has also agreed to provide additional funds to strengthen their regulatory processes and ensure a safe drug supply chain. It has proposed providing additional staff, training, equipment, laboratories and the advancement of vendor neutral, simple and affordable ‘track and trace’ technologies. Again, raising awareness on the issue, which includes the assembly of a publicly available central ‘counterfeits’ repository, and implementing severe penalties to those pursuing these spurious drugs, are all part of this campaign (17).

Role of Big Pharma
Big Pharma is at the epicentre of the effort against counterfeit drugs, with the largest companies dedicating resources to contain the problem. Organisations can work with local regulators and government bodies to improve legislation, regulatory infrastructure and enforcement procedures, but the primary efforts can only be focused on the use of technology and communication to tackle counterfeit drugs.

Drug companies address security issues using various and contrasting approaches, and there is a need for improved practices and industry benchmarking to fully safeguard global supply chains. Globalisation has changed the rules of manufacturing and distribution, and it is no longer enough to develop policies, processes and procedures at an organisational level. These practices now need to take into account the extended supply chain environment.

Often, outsourcing can be a major weakness in the supply chain (see Figure 4, page 88). Pharmaceutical Manufacturing recently conducted a survey of representatives from 66 leading life sciences organisations to investigate supply chain inconsistencies and discovered that 91 per cent of outsourcing-heavy pharmaceutical companies had a “significant incident” compared to 59 per cent of their more vertically integrated peers. One way companies are tackling this issue is through the implementation of technologies, such as radio frequency identification or temperature and related sensors, to monitor items with special handling requirements – eliminating human error as much as possible. To date, these technologies are not widespread, mostly due to the huge investment required to roll this out globally.

Despite the growing problem of counterfeit drugs, there are as yet no globally standardised anti-counterfeit identification criteria for medicines. Regional and local governing bodies are currently developing key directives to deal with pharmaceutical crime. Unfortunately, these efforts are not necessarily harmonised, and MNCs will eventually incur large costs to meet disparate global requirements.

Traditionally, more effort has been focused on making packaging difficult to replicate. However, it has become increasingly apparent that more sophisticated packaging initiatives are needed in the war against counterfeit medicines.

Solutions and Serialisation
Manufacturers have the flexibility to implement anti-counterfeiting technologies that suit their internal requirements, allowing them to differentiate their own products from potential counterfeit versions (see Figure 5) (16-21). The technologies used may be suitable for single brand use, for introduction into a given market or for a global application. Currently, in the majority of developed markets, most drug units are never authenticated using these technologies; products are only verified if there is suspicion of malpractice.

The goal of serialisation is to enable the ‘tracking and tracing’ of all drugs in the supply chain. The use of ‘track and trace’ and ‘ePedigree’ solutions requires every stock-keeping unit to be monitored as they move through the supply chain. The use of unique identifiers and associated carrier technologies, such as barcodes, needs to be implemented at a countrywide level. National regulators are still developing this concept, and many emerging countries, such as Brazil, India and South Korea, have recently modified their original serialisation laws to embrace more global standards, albeit to varying degrees.

Enforcement and Public Awareness
Although the onus lies with local government bodies and regulators to alert the public to the dangers of counterfeit medicines, companies are also proactively investing in these areas. Many are taking law enforcement into ‘their own hands’, with major drug companies actively building cases against counterfeiters in other countries. Pfizer, for example, has hundreds of cases in different stages of development, and reports having confiscated 65 million counterfeit products since 2004. Companies are also working closely with trade associations and local governments by sponsoring global education and awareness initiatives to inform the general public about the dangers of using counterfeit drugs (see Figure 6) (22).

High Priority
The presence of counterfeit medicines remains a high priority for Big Pharma. As global standards are further developed, it will become easier for companies to successfully tackle this issue. Multiple industry stakeholders recommend that in the case of supply chain security, it is essential that best practices are shared. This will ensure that company brands and, most importantly, patients are protected from this spurious practice.

References

1. Buckley GJ and Gostin LO, Countering the problem of falsified and substandard drugs, Board on Global Health, Institute of Medicine, 2013
2. Bate R, Phake: the deadly world of falsified and substandard medicines, 2012
3. Sapeta K, Forging more secure links in the pharma-biotech supply chain, PharmaPhorum, 2013
4. Harper J et al, Coincidence or Crisis? Prescription medicine counterfeiting, The Stockholm Network
5. Liang BA, Globalization of the drug supply: counterfeit drugs and safety challenges, San Diego Center for Patient Safety, Department of Anesthesiology, University of California, San Diego School of Medicine, Institute of Health Law Studies, California Western School of Law, UCSD Osher Institute, 2012
6. General information on counterfeit medicines, World Health Organization
7. World Health Organisation, Counterfeit medicines: an update on estimates, IMPACT, 2006
8. Milton J, Fake medicines: illegal, immoral and liable to increase drug resistance, The Financial Times, 2010
9. Carrington Blog, The economy of counterfeit drugs, 2013
10. Counterfeit Drug Incident Encyclopedia. Visit: www.safemedicines.org
11. Baker and McKenzie, Counterfeiting in the pharmaceutical industry; a look at the bitter pill in China
12. Lee M and Hirschler B, Special Report: China's ‘wild east’ drug store, Forbes, 2012
13. Pew Health Group, After Heparin: protecting consumers from the risks of substandard and counterfeit drugs
14. Bansal D, Malla S and Tiwari P, Anti-counterfeit technologies: a pharmaceutical industry perspective, Sci Pharm, 2013
15. Active Pharmaceutical Ingredients Committee, Tallin, Preventing counterfeit/ falsified APIs – The European API manufacturers’ view, 2012
16. Peets L et al, Tackling pharmaceutical crime: initiatives at multinational, EU and national level, Life Sciences, 2009
17. Gren JL, Life sciences and innovative forum planning group meeting, Update on progress implementing the LSIF anticounterfeit medicines action plan, 2013
18. Rogers D, The different goals of anti-counterfeiting technologies and serialization, Rx Trace, 2012
19. Dubin C, Government and industry come together to stop $75 billion drug counterfeit ring, 2012
20. Jaffe O, The war on counterfeiting, Ethics Illustrated, 2012
21. Burhouse R, How new packaging technologies are helping in the struggle against counterfeit drugs, 2013. Visit: www.pharmamanufacturing.com
22. Eaton Corporation press release, Federal law enforcement and industry experts call for heightened awareness and increased collaboration to combat threat of counterfeit products, 2011


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About the author

Inass Hassan is an experienced Principal Consultant. At Deallus Consulting, she has worked with a broad spectrum of leaders in the industry providing strategic consulting services across various stages of a product’s lifecycle on a product and portfolio level. Inass embarked on her consultancy career after completing her Doctorate of Engineering in Biochemical Engineering from University College London. During her time there, Inass spent four years consulting and carrying out R&D work at a bio products laboratory. Prior to this, Inass worked in the manufacturing and engineering group at GSK Egypt.

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