How Counterfeit Pharmaceuticals Hurt Manufacturers

Meagan Douglas
Thu, Sep 24, 2015
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Manufacturers use data collection devices to tell real pharmaceutical products from fakes.

Counterfeit pharmaceuticals are dangerous to businesses and consumers. With the rise of ecommerce and global supply chains, these drugs are increasingly difficult to track.

The World Health Organization found half of illegal online pharmacies that conceal their physical address sell counterfeit medications. CNN shared the conclusions of a 2014 U.S. National Association of Boards of Pharmacy report, which discovered 96 percent of online pharmaceutical retailers did not meet the standards established by the NABP.

WHO estimated the counterfeit pharmaceutical industry makes $431 billion a year. Criminals get away with their activities because of the transient nature of ecommerce and miscommunications between different nations. Each country has its own laws and regulations for medical product quality and shipping; illegal suppliers hide in the grey areas.

Medical manufactures that create products meeting consistent standards of quality can get lost in the available options. Businesses need supply chain strategies that produce clear data trails for each delivery path and provide information for government and consumer validation.

The Threat of Fake Drugs
Many product manufacturers have to worry about counterfeiters trying to profit from their names. Major electronic brands and high-end clothing stores often loose consumers to knock-off retailers. Fake pharmaceuticals, however, are not just detrimental to a company's bottom line, they're hazardous to public health.

Drug counterfeiters sometimes use high-end technology to create very similar products to medical materials produced by global brands, other times they fill capsules with anything that is convenient. CNN reported different fake drugs may contain dust, paint, ink and rat poison. The worst-case scenario is that an illegal pharmaceutical retailer tricks consumers into ingesting products that prove deadly. Even inert placebos are dangerous, because they prevent people from taking the medications they need for illness or other physical conditions.

Whenever the news reports a person falling victim to a fake drug, consumers become wary of all similar products. Manufacturers need to use packaging, labels and inventory management tracking solutions that communicate quality and safety.

Global Supply Chain
Channelnomics said businesses have to be wary of unintentionally selling counterfeit goods. When the media finds a company was a link in a fake drug supply chain, the public does not care if the business got duped. Consumers hold manufacturers and retailers responsible for the products they put their names on. 

Even when products are not outright fakes, shifty business practices may turn quality products into hazardous materials and thus create fraudulent labeling claims. Some items need to be kept in certain climates during transport, others have short shelf lives that companies can't ignore. Certain territories are unwilling or unable to hold supply chain practices to strict guidelines. According to the Food and Drug Administration, 80 percent of the ingredients U.S. companies use to manufacture pharmaceuticals come from foreign production facilities.

Companies have to ensure their manufacturing processes are above board and they must hold their suppliers to the same standards. Manufacturers can use automated data collection solutions to facilitate production visibility. Products marked with barcodes or other traceable labels remain observable during distribution. The warehouse management system should also capture the supplier's information so there is a complete history on all merchandise. Businesses must find partners that adhere to quality control and have the ability to report processes.

Tactics for Protecting Products
Recent laws give government regulators the power to detain pharmaceutical products they find suspect. Throughout the supply chain, companies have to show they properly produced, handled and labeled their materials. The inability to display the proper documentation will lead to officials seizing and destroying products.

The Drug Quality and Security Act detailed how electronic systems are essential for pharmaceutical product traceability. To comply with new standards, companies should have a warehouse management system with mobile devices for automated data collection and reporting. The RFgen white paper "8 Signs you Need an Automated Data Collection Solution" describes how a centralized system built on real time information coming from every step of the supply chain helps companies communicate their quality standards. It also makes government reporting simpler and more cost efficient.

Education is an important tool for public safety. A pharmaceutical manufacturer must provide their consumers with every bit of information they can about the products they purchase. Sometimes customers have a hard time telling safe drugs from dangerous knock-offs. Whatever data a company can display creates informed consumers and a more secure industry.

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