Digital seals and the war on counterfeit drugs
26 February 2018 | Michael Baucke
Fake drugs are flooding pharmaceutical markets, devastating lives and undermining brands. But a new kind of digital seal can help turn the tide.
Counterfeiting is a big problem for the pharmaceutical industry, and it’s only getting bigger.
In 2013, the Interpol-coordinated operation, Pangea, seized 9.8 million illicit and counterfeit drugs. By 2015, that number had climbed to 20.7 million1. And by 2017 it stood at 25 million2.
Fake drugs are everywhere. And they’re having a devastating impact, not just on pharmaceutical companies, but on consumers.
Fake tuberculosis and malaria drugs alone kill 700,000 people a year3 – more than a person a minute. And one million people die every year from taking fake toxic drugs.4
Even in instances where no one is hurt, fake drugs are costing brands in a big way. The European Union Intellectual Property Office estimates that the EU pharmaceutical sector loses €10.2 billion a year, or 4.4 per cent of sales, to counterfeit medicine.5
The question is, in the face of such a big problem, what can you do to protect your brand – and your customers – from counterfeiters?
Keeping it real
The honest answer is that your options are limited. The sheer scale of the fake drugs problem is staggering. Counterfeited pharmaceuticals are a $200Bn/year business6 and a huge 1% of all drugs in circulation are fake, rising to 70% in some developing regions.7
It’s also hard to figure out where to start with a problem so big. Pharmaceutical supply chains are complex and tracking a product’s journey from factory to consumer can be challenging. There are plenty of opportunities for criminals to get fake drugs into the market.
The good news is that there are steps every business can take to protect their products and signal their authenticity.
One of the simplest and most common ways is to secure products with a seal. These can take the form of induction seals, often used to safeguard over-the-counter medicines, or simple adhesive stickers. These seals aren’t designed to protect the medicine as much as they’re used to demonstrate that the product hasn’t been tampered with. They also show where the product’s come from and who’s produced it.
But even this method is now being co-opted by criminals. As these seals aren’t truly unique, they can be replicated, providing the counterfeiter has the right technology. Which is likely, considering the wealth of resources at their disposal.
The problem is that as long as brands rely on traditional techniques, counterfeiters will be able to learn and adopt them.
It’s time for something new.
Enter Near Field Communication (NFC)
NFC isn’t a new technology in and of itself. It already powers ePassports around the globe, contactless subway passes and applications like Apple Pay. What’s new is how it’s being used in the pharmaceutical industry – to authenticate drugs.
When a product has an NFC tag embedded in it, anyone with a smartphone can tap on that tag and start a secure, digital interaction. For example, when you hold your NFC-enabled passport against an NFC-reader at the airport gate, it scans your details and relays them to a control system for validation.
In the world of pharmaceuticals, NFC tags can be embedded into seals so anyone with a smartphone can instantly tell if the product is authentic. You just tap your phone against the seal and it opens a secure link in your browser to confirm the product is real. And if a product’s been tampered with, the NFC tag’s antenna breaks so it’s clear it isn’t to be trusted.
These digitally-enabled seals are superior to traditional seals for three important reasons:
- They can’t be replicated – as each NFC chip stores a unique digital identity that can’t be copied, it’s impossible to create a copy of individual seals.
- They’re more secure – they can detect breakages that are invisible to the naked eye and it becomes obvious to the user once the NFC antenna is broken by tampering. Plus, they don’t need to be handled by experts – smartphones are all you need.
- They create opportunities to enhance the customer experience – the message they send to smartphones can be customized. So in addition to telling customers your product is authentic, you can also deliver value-added digital services and information to them.
Tackling counterfeiting wherever you customers are
Counterfeiting isn’t going away. It’s an established industry that stretches across the globe.
But every brand that makes authentic drugs can send a clear signal to their customers. If you tap it and get an authentication message, it’s definitely real. If you don’t, it isn’t.
For the first time, you can authenticate your products in a way that can’t be replicated. This makes it fair easier to build a more reliable and trusted brand and makes it far harder for criminals to sell dangerous lookalikes.
These aren’t just minor gains, they’re huge opportunities. To protect your brand – and your customers’ lives.
Learn more about our digital seal technology here.
1: Interpol, Operations summary, 2015. Read source
2: Department of Health (DoH), Operation Pangea X - Tens of Thousands of Illicit Drugs Seized, 2017. Read source
3: IPN, Keeping it Real: Protecting the World’s Poor from Fake Drugs. 2013. Read source
4: WHO estimates, cited in PricewaterhouseCoopers, ‘Fighting Counterfeit Pharmaceuticals: new defences for an underestimated – and growing – menace.’ June 2017. Read source
5: European Union Intellectual Property Office, €10.2 billion lost every year across the EU due to fake medicines, 2016. Read source
6: PricewaterhouseCoopers, ‘Fighting Counterfeit Pharmaceuticals: new defences for an underestimated – and growing – menace.’ June 2017. Read source
7: As above.