Keeping It Real

Google the name of any well-known drug, and in addition to a brand Web page, a Wikipedia entry, and listings in a handful of directories, you'll see dozens, if not hundreds, of online pharmacies offering to send you the product in discreet packaging at rock-bottom prices. This raises a scary question: If you send in your money, what will you get?

Not long ago, MarkMonitor, a brand-protection firm known for its annual "brand jacking" report, decided to find out. To give the online pharmacies a fair shot, the company searched for legitimate-looking sites—the ones that ranked high in keyword searches, and purchased legitimate online advertising—and attempted to place orders through five such sites.

According to Te Smith, vice president of communications at MarkMonitor, the process didn't go as smoothly as expected. At four of the five sites, technical glitches made it impossible to use online shopping carts. "It's possible that some of these pharmacies are [virtual] storefronts for the same back-end Web site," Smith told Pharm Exec. "A scammer could put up a variety of 'storefronts,' each emphasizing a different drug or condition in order to maximize overall traffic, but funnel those purchasers to the same back-end shopping cart to process the transaction."

The one successful purchase was a global affair. The site, Interpill.com, claimed to be located in the United States, and used a phone number with a Southern California area code. However, the IP address of the site was Russian, as was the accent of the operator who took the order. The credit card, meanwhile, was billed from Israel, and the pills, which arrived eight weeks later, were shipped from India.

Police and pharma companies have turned up counterfeit pharmaceuticals produced under deplorable conditions in unsavory environments. The lab above was discovered by Pfizer during a raid in China. The company is cracking down on rogue drug plants by constantly changing its packaging and responding to every call.

And what were they? MarkMonitor was not able to determine that definitively, because the sample proved too small. The active ingredient was a generic in the same class of drugs, possibly legitimately produced for some other market. But one thing was certain. "They were not the same brand that we ordered," Smith says.

As of November, Interpill is still an active Web site with a fairly slick home page. However, the site appears on dozens of lists of fraudulent Web sites, and has received hundreds complaints from customers. Requests for an interview were denied.

The Threat is Real?

MarkMonitor's experiment—one purchase, resulting in one fake—is obviously anecdotal, but it matches a growing body of experience. Repeated FDA mail intercepts over the past few years have turned up masses of counterfeit drugs going to individual consumers, while there have been at least two highly publicized cases in which counterfeit Lipitor and Procrit have entered the US drug distribution system. Though no one expects it to be easy to trace the effects of counterfeit pharmaceuticals on the health of consumers, there has been one well-documented fatality—a Canadian woman poisoned by counterfeit sedatives that contained dangerous metals, including uranium, strontium, selenium, aluminum, and arsenic.

While it's hard to quantify how much illegal prescription medicine changes hands each year, no one—not FDA or the pharmaceutical industry—is downplaying the threat. According to the Center for Medicine in the Public Interest, counterfeit drug sales are expected to reach $75 billion globally in 2010, an increase of more than 90 percent from 2005.

"There are millions and millions of packages trying to come into the United States each year. We have no idea what those millions and millions equate to, and it's very hard and resource intensive to actually get a good count; but the trend is that the numbers have been going up," says Ilisa Bernstein, FDA's director of pharmacy affairs.

One estimate of the scale of the problem comes from Rep. Steve Buyer (R-IN). In one day, he says, up to 360,000 packages containing counterfeit drugs enter the 12 international mail facilities. That's up to 10 million packages a month, and 130 million counterfeit drug packages in a year.

In the case of drugs, the word "counterfeit," includes far more than products made by someone other than the patent holder. Many of the products identified by FDA as counterfeit are authentic products that have been diverted from some other part of the drug distribution system. One key form of diversion: product intended for sale in countries, where prices are low, that is illegally reimported to the US as an exercise in illegal arbitrage—in order to gain a profitability advantage. Another type of counterfeit: Short-dated drugs intended for humanitarian efforts, long term care, group purchasing organizations, or specialty clinics that are smuggled back into the US, often with the expiration date altered.

"Many believe that diversion is often the catalyst for counterfeiting," says Dean Hart, executive vice president of NanoGuardian. "[They think] 'If I can get this diverted product through as easily as I can, if I really want to maximize my profits, maybe I go to that counterfeited level.'"

Viagra for Sale

Ironically, one company that is renowned for hunting down counterfeiters is also known for having the most forged drugs. Pfizer's heads of security have seen just about everything when it comes to counterfeiting, and the company is doing what it can to get a stranglehold on brand-jackers.

Since 2004, Pfizer's security crew has discovered approximately 42 million counterfeit products—mostly Viagra, but also Lipitor, Norvasc, and Celebrex. In addition, Pfizer has unearthed enough active pharmaceutical ingredient to manufacture probably another 63 million more tablets.

"We've also found ingredients that you would not normally want to ingest, such as boric acid; or people who take Viagra when it actually contains amphetamines or too much of the active ingredient, which can increase the possible side effects," says Rubie Mages, director of policy communications and programs at Pfizer. "While a number of these [drugs] do come in through the Internet, I think you need to take a look at the overall picture, which includes counterfeits that have been able to breach the security of even the most regulated of supply chains."

Mages is clear that even though the US pharmaceutical supply chain is one of the safest in the world, it isn't impenetrable. In 2003, 18 million pre-packaged Lipitor tablets were recalled from the legitimate supply chain after counterfeits slipped into the US. In that case, counterfeit product manufactured in Costa Rica was commingled with authentic product intended for another market—also smuggled into the United States—and then repackaged and delivered to pharmacy shelves throughout the country.

Pfizer has discovered counterfeit products in the supply chains of 26 other countries, including Canada and the UK. "While it's relatively safe, I think counterfeiters would love to get their product into our legitimate supply chain," says Patrick Ford, Pfizer's senior director of security for the Americas.

Pfizer's security team believes that the key defensive measure is conspicuous counterfeit protection on all packaging to help pharmacists and distributors distinguish counterfeit packaging from the real thing by simply looking for markers. "Counterfeiters, generally speaking, are very good at recognizing our overt authentication, and within six months they generally have counterfeited it," Ford said. "We've had other technologies that have lasted three years, four years, but we're always changing our overt features, depending on the product and whether or not it's been counterfeited."

For James Christian, head of security for Novartis, the best way to stop counterfeiters is the old-fashioned way—keep your ears to the floor, answer every report, and kick in the door in when necessary.

Novartis has a multi-pronged approach. First, it has developed an early warning system consisting of intelligence sources that report any time there's a counterfeit problem, even if it's not a Novartis product. "We monitor what the other companies are doing and the problems they're having, because if somebody's having a problem in a particular country, we can guess that we're going to have a problem, too, eventually," Christian explains.

To avoid last-minute complications when a situation arises, Christian has developed contacts with law enforcement, regulatory, and health authorities in countries with known counterfeiting operations. "In many countries, the authorities don't devote the manpower to the situation," he says. "But if you come in after a three-month investigation with the clandestine lab, print shop, and suspects identified, you can get a prosecutor and the law enforcement to come in and make the case, and get some headlines and pictures in the paper."

In addition, Novartis tries to support the judiciary all the way through "because the worst thing that a company can do is walk away after the arrest or seizure, and not worry about the prosecution," Christian explains. "We try and hold their hands through the whole process."

RFID: Where R We?

In 2004, FDA freed industry to experiment with and pilot new labeling systems using radio frequency identification (RFID) to track product through the supply chain. RFID systems served two purposes: They permitted authentication of product on the item and package level and made it easy-to-establish an electronic pedigree.

Pfizer, Purdue, and a handful of other pharma companies tested RFID on expensive and highly counterfeited drugs such as Oxycontin and Viagra, touting the system as the future of security. At the same time, states such as California and Florida began mandating item- and package-level tracking, and the establishment of an electronic pedigree system to account for all packages as they move through the supply chain. The form of serialization to be used was not stated, but RFID did gain support as an easy, albeit expensive, means of scanning large quantities of drugs at one time.

There was just one hiccup—industry could not retool its entire distribution chain in time to meet California's January 2009 deadline. Now pharma has a few more years to get ready, and while some companies are well ahead of the curve, others are praying that the federal government will jump in with a national standard for e-pedigree

"I don't personally have much confidence in RFID," says Christian. "Back in 2004, the FDA task force was looking for an answer to satisfy Congress.They didn't really have one, so they came out and said RFID will solve all our problems in a couple of years. It hasn't, and it won't. It's an inventory management tool. It may help with the security of products from a diversion point of view, but 99 percent of [RFID] out there is not on the product, it's on the packaging."

According to Robin Koh, chief strategy officer at serialization company Supplyscape, one of the biggest problems with RFID is the cost/benefit ratio. Downstream supply-chain partners stand to benefit the most from RFID, but the manufacturer eats most of the costs. Still, Koh insists that pedigree is still one of the best methods of securing the supply chain.

"The best thing about a pedigree component is that it doesn't travel together with the physical item," Koh says. "Even if you steal the physical object, you won't know what the certificate is."

Merging serialization and security, labeling firm Mikoh has developed an adhesive label that supposedly cannot be defeated by heat, cold, or moisture. The label can be merged with an RFID tag, two-dimensional barcodes, or any other kind of pedigree tracking device. In order to open a box of drugs, the label must either be damaged or destroyed. The company is now working on a battery-powered label that records a time-stamp the moment the package is tampered with.

"We thought we had some good traction going with the California pedigree people, then when Schwarzenegger signed the bill that pushed off the deadline, there was a collective sigh of relief," says Mikoh vice-president of business development Steven Van Fleet. "In my mind, it was the wrong answer, because we still have counterfeit and diverted gray-market drugs, and people are getting sick and dying, and we seem to get hung up on, 'Jeez, we just dodged a technology bullet.' We're not really addressing the key issues here, so we continue to plod along."

On-Drug, Out of Mind

A more future-forward approach to anti-counterfeiting is on-dosage security—the ability to add a layer of protection to the actual drug.

Four years ago, the idea of on-dosage security was still in the hypothetical, neat-but-expensive stage of development. In Iselin, NJ, at a meeting of the International Society for Pharmaceutical Engineering, excipient manufacturer Colorcon hosted a forum about the benefits of designing tablets that are distinctive and can be protected by trademarks.

One of the first tools Colorcon brought to market was high-definition printing using pharmaceutical-grade inks. Some companies investigated using of the process to print pills with 2-D barcodes that would be scannable and serialized—giving every individual tablet a distinct number.

"Our technology is very useful for search-and-seizure evidence," says Mary Ann Hegedus, business development manager for brand-enhancement services at Colorcon. "If [the authorities] find a 55-gallon drum loaded with loose tablets, right there on the spot, the investigator can get the evidence he or she needs to say, 'Yes, this is counterfeit.'"

Colorcon also pioneered work in color-shifting pigments that have a pearlescent effect and subtly change color when held at various angles to the light. Hegedus says that the advantage of the pigment is that it is difficult to reverse-engineer. "Because it is applied on top of a base coat, anybody who's looking to copy it must know the composition of the base coat, the weight gain of the base coat, the composition of the pearlescent top coat, and the composition of it," she explains. "It's easier to counterfeit a round white pill."

And the idea of individually coding tablets is far from dead. An Illinois-based company called NanoGuardian is using a form of nanoencryption to add overt, covert, and forensic security markings to the tablet coating or the capsule gel. The technology offers three levels of protection, including a visible marking to authenticate the pill, a hidden marker for added authentication and protection, and a series of modifiable codes at the nanoscale level that can contain everything from the ingredients of the drug to the address of the plant that manufactured it.

NanoGuardian also allows pharma companies to use different codes for different market segments. For example, if a particular distribution channel has been identified as corrupt, they can set up a special code for that particular sting, send the product through the channel, and then verify the product when it makes its way into the supply chain.

"Not only can I tell if this product is real, but also if this product was diverted from a country where I sold it for X dollars, and now it's being [put] into authentic bottles and returned to me for US dollars," says NanoGuardian's Dean Hart.

End Game: Education

In the end, no matter what security is used to safeguard a drug, it all comes down to educating the consumer. "If there's no market out there for purchasing these products, then these folks will probably go ahead and counterfeit something else," FDA's Bernstein says. "But the market is out there, and the consumers and patients need to really understand how risky this is."

In June, FDA published a list of red flags consumers should be aware of when purchasing medication, as well as a long list of fake cancer cures that are being touted on the Internet. In addition, with the passing of the Internet Pharmacy Consumer Protection Act in October, online pharmacies must register with the government in order to be able to sell drugs on the Web. If the companies aren't on the list, Internet hosting services have the go-ahead to shut down the sites without a warrant.

Between the push by the government for more online security and the addition of new anti-counterfeiting tools, pharma is making headway in the war against brand-jackers and counterfeiters. But it still has a way to go.

"I don't think that anybody is naïve enough to believe that with advances in technology we are ever going to be able to keep criminals from duplicating our [products]," Mages says. "In the long term, we just need to be flexible and always be ready to reinvent ourselves and introduce new technologies that they have not yet been able to compromise. Hopefully, we will be able to stay ahead of the counterfeiters."

For more insights from the executives quoted in this article, go to www.pharmexec.com