Counterfeits on the Move — How
the Digitization of Drugs Can Help
Manage Supply Chain Risk
The road to solving the issue may be long and steep, since the
challenge must be thought of in terms of layers.
By Timothy Butler, CEO, Tego, Inc.
Globally, counterfeit medication is a major issue for public health and international trade, not to mention a threat to the bottom line of any pharmaceutical company.
Thousands of people worldwide die every year from
ingesting fake drugs — and it costs the pharmaceutical
industry between $70 billion and $200 billion per year
in lost profits, by various estimates.
In 2015, Interpol seized 20. 7 million fake and
illicit medicines during a mere week-long operation,
spotlighting the heart of the issue: The rate at
which counterfeit products enter the supply stream
is untenable, and pharma manufacturers must find
ways to identify and extricate those counterfeit
products more quickly.
The key challenge lies in maintaining a drug’s
“connectivity” throughout its journey, even through
sterilization or other necessary harsh environmental
conditions, so as to create an accurate, accessible log
of data about a drug’s every move.
Supply Chain Risk: A Brief History
Before getting into possible solutions, it may be
useful to outline the sources of risk. Counterfeit
risks arise mainly as products move between various
stages and layers of a highly complex global supply
chain. Each layer in the process degrades visibility
and creates the opportunity for counterfeits,
including products with the wrong active ingredient
or fake packaging, to enter the distribution network.
The first move to address this risk, in the 1980s,
was by using packaging security via holograms. In
the 2000s, new ink technology such as invisible and
color-shifting products came of age, as well as laser-
readable printing. These technologies were difficult
to copy when they first arrived, but counterfeiters
eventually found a way to replicate the techniques.
Many pharmaceutical companies then
experimented with simple RFID tags, barcodes
and other technologies designed to track and
authenticate drugs between manufacture and
patient. Still others worked to develop on-dose or
on-product security as a complement to packaging
security. Also called "edible bar codes," this is
a promising technology but has a number of
additional regulatory implications to work through
since it is an ingestible part of the drug.
Is the IoT Infrastructure a Salvation to
The emergence of Internet of Things (IoT)
technologies indeed have the potential to provide
safer, more complete track and trace methods as
drugs flow through the supply chain. When you
connect an asset, in this case a drug bottle, you
conceivably make it visible wherever it goes, and can
thus pinpoint supply chain leaks or enforce chain-of-custody controls through authorized channels and
However, large barriers stand in the way of a
full-scale IoT ecosystem. Connectivity standards —
particularly cross-border interoperability — are still
a muddy issue; the IT infrastructure build-out alone
requires heavy time and financial investment, and
the “consumable” costs of connectivity and sensor
devices are not trivial.
Moreover, as we’ve seen more and more, there are
inherent cybersecurity issues in an “always on” IoT