“In the course of countering fake medicines, it became very clear that the negative impact to society is huge. And it’s far-reaching.”

Countering Counterfeit Medicines in Today’s Digital World

Reading Time: 4:15 minutes

By Andy David — Healthcare Director APJ at SAP

Growing threat of counterfeit medicines

When hit with a throbbing headache, we rarely think twice about reaching for that over-the-counter painkiller we bought last week. Yet, with a growing threat of counterfeit or substandard medicines threatening the health and safety of patients around the world, perhaps it is high time we think about where our medications are coming from.

Counterfeit drugs are often imitated after the pharmaceutical products of many genuine manufacturers. These fakes range from drugs with no active ingredients to those with dangerous contents. They may also be copies of on-patent branded medicines, cheaper generic drugs or over-the-counter drugs. Whatever form they take, counterfeit medicines endanger lives.

According to industry-funded organization, Pharmaceutical Security Institute (PSI), Asia accounted for the second biggest share of the trade in counterfeit medicines. But the movement of counterfeit drugs flows everywhere.

As PSI highlighted, regions that are more frequently linked to incidents of counterfeit pharmaceuticals are not necessarily those with weak enforcement and inspection programs. Instead, it is often the case that countries in these regions are effectively identifying pharmaceutical crime. Conversely, those with seemingly low incident totals are not necessarily unaffected; criminal pharmaceutical activity may just be undetected.

Far-reaching implications

In the course of countering fake medicines, it became very clear that the negative impact to society is huge. And it’s far-reaching.

Indeed, approximately one million people die from fake drugs every year. Counterfeit medicines also cost the pharmaceutical industry an astounding $46 billion annually.

The losses are not strictly limited to commercial loss of revenue for the pharma companies. Counterfeiting adversely affects the reputations of drug manufacturers that invest significantly to enhance the awareness of their genuine medicines, sowing doubt in patients who may very well need them to survive. Downstream, this also means a loss of jobs. What’s worse is that counterfeiting undermines the incentives of R&D-based companies to invest in future innovation – a core aspect of future healthcare.

With so much at stake, serious countermeasures are sorely needed.

Countering falsification: The role of legislation

In response, international governments have started implementing, enacting or made plans to draft legislations calling for the serialization and reporting of medicinal drugs. An instance is the Drug Supply Chain Security Act (DSCSA), which requires any company wishing to sell a pharmaceutical product in the U.S. to facilitate product traceability by 2023. Similar traceability regulations are also coming into force around the world.

Necessitating active participation from every member of the supply chain – from manufacturers and their suppliers, to wholesale distributors, third-party logistics providers, pharmacies and hospitals – these legislations add an important layer to shield the interests of patients as well as the pharmaceutical and healthcare industry.

Having said that, with so many parties involved, the compliance process can be complex and unwieldy. Pharma manufacturers need to address business challenges arising as a result, including the following key questions:

  • How do I efficiently comply with many country-specific compliance and reporting requirements?
  • How do I scale with the expected data volume arising from serialization?
  • How can I efficiently integrate serialization with my business processes and systems?
  • How can I work effectively with my business partners in view of serialization?

Advanced tracking and tracing

Fortunately, innovations exist in the market for pharmaceuticals to respond effectively. The Advanced Track and Trace for Pharmaceuticals (ATTP) application – co-innovated between SAP and 10 leading pharma companies – is one such example.

The solution allows pharma manufacturers to generate serial numbers for each drug, transmit those serial codes to packaging lines, and then track the disposition of the coded unit products into warehousing and trading partners. The track and trace software then integrates serialization with a pharma company’s existing processes, and provides country-ready reporting packages.

The result is the dramatic simplification of the monstrosity that cross-country serialization can create – which is great. But even more wonderful is the envisioned outcome – transparency and safety in healthcare.

Which means confidence in the drug package you buy over the counter, or a physician sends to a patient’s bedside.

Digitizing, one step at a time

For the pharmaceutical and healthcare industry, serialization is a small but important step towards Digital Healthcare.

By ensuring a secure supply chain, the pharma company enables the certification of the critical medicine as a genuine drug – from manufacturer to hospital to patient. It allows business partners such as hospitals to automate the ordering of critical medicines when supplies fall low, without having to worry about patient outcomes or their own compliance with respect to the validity of the medicine.

Serializing products for tracking and tracing on an item level also reduce complexity of recalls. It brings valuable transparency in the supply chain, which can be used for optimization of the related distribution and marketing strategies. It also shows commitment towards being an ethical and responsible member of the industry.

So, while the first steps of serialization may have been taken owing to regulatory compliance, the journey is contributing to the healthcare of tomorrow. And that’s an optimistic outlook for the industry.

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