Firms have an obligation and an opportunity to protect their drugs.

Concern about pharmaceutical counterfeiting is growing, as it should. In late 1997, the World Health Organization released the results of an exhaustive literature review and field investigation that concluded that approximately 5% of the world's medicines are counterfeit and that more than 500 people have died from these fakes.

Can these counterfeits be prevented? Yes! Attacking the problem vigorously using holographic and other security techniques can benefit both pharmaceutical manufacturers and packagers.

At the recent Product Counterfeiting (& Diversion) Protection conferences in the United States and Europe, the leading pharmaceutical company Glaxo Wellcome discussed its strategy for dealing with counterfeiting. Company chairman Sir Richard Sykes stated: "Counterfeit medicines represent an unacceptable threat to patients' welfare. In addition, they can damage pharmaceutical companies, not simply through lost sales, but also by associating them with substandard or dangerous products." The company has developed a program to prevent counterfeiting.

Glaxo's strategy has proved successful in combating the counterfeiting of Zantac in the United Kingdom and asthma medications in Latin America as well as the reuse of antibiotic vials in China. Geoff Powers, international packaging coordinator, explained that in these cases the company replaced the product's "simplistic" packaging, which "ensured that counterfeits would be easy to make and difficult to detect," with more sophisticated packaging bearing a security hologram.

In China, previously used, unsterilized antibiotic vials were being purchased at the doors of hospitals, then refilled, resold, and reused. Glaxo redesigned its packaging using a "shrinkable vinyl self-adhesive label. . . [and graphics] ensuring that [the vials] could not easily be recycled," Powers said. Since the introduction of the new packaging, there has not been a single reported incident of recycling of these products in China.

Other companies are taking similar precautions to authenticate their products. In doing so, it is important to analyze the counterfeiting problem in the context of the manufacturing, marketing, and distribution system for that product. IHMA's publication Specifying and Purchasing Authentication DOVDS is a good place to start.

Legal scholars have begun to suggest that manufacturers may have an obligation under civil tort law to take steps to prevent counterfeiting. A recent article by Arthur Best in Currents International Law Journal argues that manufacturers may be held liable for injuries suffered by innocent purchasers of the defective product imitations if certain conditions are met. These include: 1) if the counterfeiting of the product and consequent injury is foreseeable, and 2) if there are cost-effective preventive measures.

Certainly, the problem is foreseeable, and the Glaxo example suggests that counterfeiting is preventable. Recent data suggest that the fight can even be profitable. The anticounterfeiting publication Authentication News has described several real-world case studies in which companies have realized returns of $2–$10 for each dollar invested in an anticounterfeiting system.

Pharmaceutical manufacturers have the opportunity to maintain consumer confidence, market share, and investor support through appropriate systems that include holographic and other security packaging. Packaging suppliers also have an opportunity to provide these value-added solutions.

IHMA represents more than 60 holography makers. Reconnaissance International organizes conferences such as "Counterfeits that Kill: Solutions that Save," to be held June 14–16 in Amsterdam. Lewis Kontnik publishes Authentication News. He can be reached at 303/293-3000, fax 303/293-8661, e-mail: reconnusa@aol.com.

Lewis T. Kontnik, president, Reconnaissance International, and American secretariat for the International Hologram Manufacturers Association (IHMA).

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