PER PHARMACEUTICAL ANTI-COUNTERFEITING PROGRAMS: Authentix
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PER
PHARMACEUTICAL ANTI-COUNTERFEITING PROGRAMS:
HOW SMALL AND MID-SIZED DRUG COMPANIES
CAN IMPLEMENT AN EFFECTIVE STRATEGY
WRITTEN BY
CHRISTOPHER R. LOWERY, MANAGING DIRECTOR, HILLCREST ADVISORY GROUP
KENT MANSFIELD, CHIEF SALES & MARKETING OFFICER, AUTHENTIX
A U T H E N T I X W H I T E PA P E R
ABSTRACT
This paper discusses the benefits, key considerations, and growing menace. Generally, larger companies have well-
suggested road map for the small to mid-sized pharmaceutical developed, advanced Anti-Counterfeit Programs (ACP), but smaller
company to implement an anti-counterfeiting program strategy. and mid-sized companies lack the management bandwidth for
larger strategies or simply overlook the need until later in the
Counterfeit, adulterated, and diverted medicines present a critical commercialization process. Delaying a product risk assessment
risk to patient safety and account for hundreds of billions of or waiting to implement a brand protection solution can put
dollars in global illicit trade. The proliferation of fake medicines, patients at significant risk and can severely and adversely impact
the severe risk to patient safety, and lack of a unilateral approach the company’s financial success, brand reputation, and capacity to
by governments to combat this crisis leaves the pharmaceutical manage crisis events in the supply chain.
industry in a posture of self-defense to remediate this ever-
INTRODUCTION
A Thoughtfully Developed Anti-Counterfeiting Program Protects Patients and Products
Pharmaceutical counterfeiting presents a critical risk to patient safety and the franchise value of your growing enterprise. With
so many points of attack and opportunity for illegitimate supply to comingle with genuine product, a company’s ability to detect,
measure, and mitigate adverse events caused by fake products is the key to your own defense. Sometimes, establishing an anti-
counterfeiting program, or ACP, can seem daunting for companies in early commercial staging. However, leveraging key providers,
their industry experience, and deploying proven technologies can be the best approach. “Investing in the latest security technologies
is becoming an industry standard as government mandating bodies (only now) begin to require minimum levels of verification.”
(Pharmaceutical Counterfeiting: A Global Threat, 2020) If companies are to ensure the integrity of their products throughout a
chaotic supply chain, they must develop their own ACP.
“…the financial expense of fighting the good fight against
pharmaceutical counterfeiting pales in comparison to
the cost in human lives, brand reputation and billions of
dollars siphoned off into criminal organizations.”
Michigan State University, Pharmaceutical Counterfeiting: A Global Threat
(Source: International Chamber of Commerce)
Critical Program for Small and Mid-size Pharmaceutical Companies
Launching new products is the lifeblood of all pharmaceutical companies and is usually a primary characteristic of smaller to mid-sized
firms. For these companies, enacting a solid ACP can make a significant impact on reducing issues as products commercialize and begin
contributing to the company’s value creation. Some brand owners spend millions to billions of dollars in product development including
base research, clinical studies, regulatory filings, scaling manufacturing, supply chain operations, and other activities deemed critical to
the success of the launch.
Just one unauthorized sale of a launched product (counterfeit or otherwise) into the marketplace can have a devastating impact on any
brand and result in far reaching market implications, creating a lack of confidence in the brand and potential loss of future market share.
During the launch phase of a new product, any event that erodes confidence in the brand or the quality and safety of the product can
be the difference between success and failure. The reputation of your new product and your brand must be the highest priority and a
well-designed ACP is the best way to manage and mitigate such potential outcomes.
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Small and mid-sized companies can leverage lessons learned
by larger peers who have witnessed the devastating impact
of illicit products found in the supply chain. In comparison
to the overall product development costs to get a product
launched, the amount of resources needed for an effective
ACP implementation is one of the best investments to
consider.
Where to Begin? Early Evaluation is the Key
to Implementing an Effective ACP
Creating an ACP is straightforward when working with
knowledgeable service providers, and the key to success is
doing so early in the product development process. A recent
study of brand protection and security experts indicates
that the enaction of product specific ACPs starts with a
risk assessment and then moves to technology selection.
The best time to begin this process is during Phase 2 Drug
Delivery or Formulation but no later than early Phase 3
where bulk manufacturing and package designs are nearing
completion.
Engaging earlier in the process ensures that the most
appropriate security features are mapped to the dosage
delivery method as well as the primary/secondary packaging
design. If implemented at an earlier stage, the selected
security features needed can influence package design
considerations for a more effective and cohesive integration
for vendors. As primary, secondary, and tertiary packaging
designs are finalized, all security features can then be
properly evaluated, priced, and considered as part of the
final product launch.
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KEY CONSIDERATIONS TO DESIGN YOUR ACP POLICIES AND CRITERIA FOR ALL PRODUCTS
This section outlines the process recommended for small or mid-size pharmaceutical companies to create a cost effective, efficient,
and manageable ACP to mitigate the expected risks associated with the discovery of unauthorized product suspected and/or
determined to exist in the supply chain.
1. Make it a Formal Element of your Program Launch Team
The most efficient way to ensure early engagement is to formally create ACP milestones within the product launch process.
Members of the launch team already own the practice of routinely meeting to execute against a clear development schedule.
During that formalized process, add the necessary steps to begin mapping key decision points and activities required to also
implement elements of the ACP. Routinely, the launch team, once properly acclimated to the policy, can be the initial governing
body to approve security feature selection and placement to resolve any issues.
2. Establish a Risk Assessment Scoring System by Product
The first step in the implementation process is to assess the level of risk for each product. The intent of the risk assessment is
to apply the correct level of anti-counterfeiting measures to adequately mitigate the defined risks to the product. With so many
features available, it is easy to apply unnecessary features to products – the ‘kill an ant with an elephant gun’ syndrome.
Product risk assessments should include experienced professionals who can answer a series of questions that result in a quantifiable
numerical risk rating. Risk rating scores will typically be charted by identifying the severity and likelihood of a potentially adverse
event which will generate the overall level of risk for any specific product.
This serves as an excellent tool not only to identify the initial risk score of a product, but to also provide insights into the needed
application of security features to consider. By applying pre-defined strategies, minimum requirements, and risk-based feature
applications, companies can gather, document, and analyze a host of data points to demonstrate the appropriate level of security
needed for each product and the overall risk reduction benefit.
ACP Risk Assessment: Using Proven Industry Methods to Identify a Problem
“Severity Score”
• Who will use this product?
ACP Product Risk Profile
• Treatment and adverse reaction threat Product Risk Risk Profile vs.
Profile Mitigation Score
• Competitor and market share
• Revenue/reputation impact Product A HIGH MINIMAL
“Likelihood Score” Product B MED-HIGH MINIMAL
• Historical data and therapeutic category risk
Product C HIGH BASIC
• Supply chain and distribution channels
Product D MEDIUM MEDIUM
LOW MEDIUM MED-HIGH HIGH
Product E HIGH MINIMAL
“Mitigation Score”
Mitigation Score
• Features in place to authenticate product? Product F MED-HIGH MINIMAL
• Process in place to authenticate
Product G MEDIUM BASIC
• Steps to monitor for counterfeit activity
BEST BETTER BASIC MINIMAL
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3. Define Your ACP Strategy, Policies, & Budget Available to Implement by Product
Once the initial risk and regulatory requirements have been assessed, companies should adopt a strategic approach whereby
product falsification or diversion is viewed as a fundamental risk, and the need for brand protection is an integral component to
defend financial success, reputation, and public safety.
ACP Strategy – Core Elements
IP Mark On Package Marking
Provides Legal TM Protection
Ideally, the security features chosen
should have four main attributes:
• Difficult to forge
Tamper Evident For General Public Assurance
Observation by Human Senses • Field capable verification
• Difficult to reuse feature or package
Overt For Informed Audience
• Overt recognition of removal or
tampering
Covert For Internal Authorized Parties
Uses Specific Tools
Standard strategy and application should
Forensic For analytical testing requiring forensic laboratory be based on the level of risk score the
product carries to promote baseline
Digital For instant transparency of product movement in the
supply chain via smartphone requirments with defined enhancements
Can utilize proprietary inspector led mobile app or depending upon the risk levels.
allow consumer engagement without mobile app
Divide your requirements into mitigation categories and include a combination of tamper evident barriers and other security features
placed on primary, secondary and, in some cases, tertiary packaging components.
There are varied solution providers and an assortment of technologies available to consider for effectively integrating into products or
packaging including both hidden (covert) and visible (overt) inks, coatings, taggants, and graphically secure digital codes and symbols.
Moreover, with digital marking solutions now becoming available, this allows for smartphone enabled item-level tracing of product
movement and location throughout the supply chain including points of sale.
Most ACP features on the market today have one or more of the following key goals:
• Detects suspect activity
• Supports prompt resolution of any suspect product or transaction
• Quantifies extent of suspect or compromised product
• Identifies product location exceptions (product diverted, in wrong market or channel)
• Provides data and analytical insight for planned escalation action through management
• Provides strong deterrent for falsification or diversion attempts
• Promotes channel awareness to authorized distribution to recognize genuine product attributes
Security features can be applied in multiple ways – on product, in product, on labels or closure seals, on storage cartons, or on
metal, glass or plastic components of packaging. When executed in a layered approach with careful design and quality controls in the
manufacturing process, the product becomes too complex to replicate making it a less attractive target to counterfeiters and less
vulnerable during its life cycle.
Overt Security Tactics – Covert Security Tactics – Forensic Security Features – Digital or Track and
visible, easily detected features invisible or disguised Features requiring lab Trace Features – The
features often beautifully but can be identified with analysis for testing of application of individu-
incorporated into product or handheld devices using products via an embedded al unique codes at the
packaging design proprietary optics for rapid (non-native) component or point of manufacture
• Optically variable inks detection. molecule added to a substrate (giving each product an
• Pearlescent inks • Heat-activated inks or solution to determine identifiable attribute) and
• Gold and silver inks • Color-shifting inks authenticity. Unique product defined scanning locations
• Anti-tampering technologies • Light-activated inks elements are examined so brand where retrieval and
(tamper-evident closures and • Fugitive inks owners can generate compelling association of the unit can
labels) • Inks or materials with specialized evidence of counterfeiting for legal be linked to the scanning
• Optical security technologies fluorescing taggants proceedings. transaction.
(holographic seals and labels) • Ultraviolet activated inks
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4. Engage Regulatory to Support Compliance Requirements
In 2015, the FDA’s Drug Supply Chain Security Act (DSCSA), part of the Drug Quality
and Security Act, implemented requirements for product tracing and prompt
verification and identification. The requirements set forth in the DSCSA implement
benchmarks that will roll out through 2023 by which time all drug manufacturers
and repackagers are required to implement a system to verify product authenticity
in a timely manner at every point in the supply chain. The European Union has issued
the Falsified Medicines Directive (FMD) with similar requirements. Many other
countries have followed suit and have created/are creating similar requirements.
A critical component of these directives requires manufacturers to maintain the
ability to authenticate and report suspected illegitimate product within strict
timelines. A serial number is not sufficient to validate product authenticity. A
significant and often overlooked benefit of deploying anti-counterfeiting technology
on products is the ability to allow informed parties to authenticate product
instantaneously. Without anti-counterfeiting features, reporting requirements to
regulatory authorities are often delayed while steps are taken to conduct analytical
testing.
The regulatory team will be a primary user of the techniques and processes of the
ACP and reap enormous benefits from the program as the features may be used
to authenticate suspected illicit materials. A regulatory team is a critical internal
business partner and should be consulted when approving the strategy and feature
selections for an ACP, especially when defining field-based authentication protocols
for product quality complaints.
REAL LIFE SCENARIO – The Clock is Ticking
Your Singapore affiliate receives a critical complaint from a pharmacist who
questions the authenticity of a product. Regulations require that counterfeit
medicines be reported to authorities within twenty-four hours. The pharmacist
has immediately provided photographs of the suspect product and agreed to
send the sample to the affiliate.
Scenario A – No Anti-Counterfeiting Features
Upon receipt, photographs can be used to compare the packaging and artwork
to the approved artwork. This may/may not be conclusive depending upon the
quality of the counterfeit packaging. The sample is received in the Affiliate
and then transported to analytical services for testing. Variables such as the
location of the laboratory, exportation requirements (if applicable), shipping
time and testing protocols all have a significant bearing on the time required
to render a final determination of authenticity. Regulatory reporting will be
delayed.
Scenario B – Anti-Counterfeiting Features in Place
Upon receipt, photographs can be used to render a preliminary determination
on authenticity. However, the use of a photograph is often not enough to
provide certainty. Alternatively, once the sample is received at the closest
affiliate, the applied security features can be quickly field tested without
laboratory requirements to immediately confirm whether a product is genuine.
In this case, regulatory reporting requirements can be met with far less risk of
supply chain interruptions.
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5. Pulling it all Together – Feature Selection
Once the risk assessment is completed and the overall strategy defined, specific features will be selected based upon the following
factors: 1) strategy; 2) risk; 3) geography; 4) regulatory requirements; and 5) product lifecycle. When evaluating security features, it is
important to acknowledge the strengths and limitations inherent to different applications - not all security features are appropriate for
all applications and tradeoffs may be necessary to meet standards while maintaining functionality, ease of use, and fiscal responsibility.
Features must be selected to accomplish protection while balancing practicality, functionality, and necessity.
Remember these “tricks of the trade”:
Align your feature selection with your supplier capabilities. Critical to the success of an ACP is the capability of manufacturing and
packaging suppliers to execute the program. Priority must be given to your supplier’s ability to implement your feature selections,
especially for smaller companies who rely on contract manufacturing and packaging companies. Therefore, a capabilities assessment of
your existing suppliers, printing, packaging, and manufacturing processes is an important first step.
Grab the low hanging fruit first. Many security features can be deployed with minimal process change and at a highly effective cost.
While some of these ‘low tech’ features may not fulfill all requirements set forth in your strategy, they can be helpful. For example,
artwork changes or slight tweaks to printed packaging components have minimal recurring cost and are fairly easy to implement. Also,
using more secure, covert solutions such as Invisible Infrared tagged inks can be a very cost-effective strategy.
PROGRAM IMPLEMENTATION AND SUPPORT
Hire a Professional to Kick Start the Program
While this white paper takes great care to define the need, benefits, and steps required to create and then launch an ACP, the engagement
of an industry expert is advisable to support your program’s design and subsequent management.
During the initial engagement of an industry expert and a security solution provider, several key
deliverables should be developed:
1. Anti-Counterfeiting Strategy
a. Authentication Protocols
b. Corporate Standards/Policies
c. Response Protocols for Suspect Counterfeit Complaints
2. Product Risk Profile
3. Selection of Security Technology Supplier(s) / Brand Protection Partner
a. Supplier Scale and Global Reach
b. Market Referenceability
c. Ongoing Program Support Capabilities
d. Cost Effectiveness
4. ACP Resource Requirements
Once you have engaged with the right professional(s) to assist in the evaluation, leverage their expertise when considering which
security solution provider best complies with your specific strategy. This allows for the final development of a good ACP to implement
with the least impact on your business and the greatest value to your organization.
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Partnering with a Security Technology Provider
The right security technology should come from a company with sufficient industry experience, technical skills, implementation
capabilities, and ongoing program management to properly support the program for multiple years.
Qualified security solution providers will work with you, your team and vendors to initially develop, implement, and manage a proactive
strategy to cover all stated objectives. Consider these questions and critical elements as you are vetting these potential partners:
1. Does the Provider show great curiosity to learn and understand your business?
2. Does the Provider have proven experience and referenceability in the industry?
3. Does the Provider offer consultative services, implementation ownership, and ongoing program support after the ACP is
launched?
4. Does the Provider fully understand your risk assessments? Ask them for insight into how its technology meets your business
needs by relating to industry experience in other circumstances, the nature of product distribution, your partners in the
supply chain and goals for specific products?
5. Does the Provider have a customized solution to fit not only the unique challenges of your industry, but also the needs
of your organization? Do they have customizable programs including advanced technology in art color marking systems,
multilayered security features, monitoring and enforcement plans and even robust data capabilities as you move towards
greater sophistication?
6. Is the Provider equipped with a large enough suite of technologies to be more ‘agnostic’ on the specific feature selection
without prejudice towards a single platform technology it may offer?
7. Does the Provider have the capability to certify your vendors for qualification in print or manufacturing trials to ensure the
product security features selected are produced or applied correctly in a secure facility under full chain-of-custody protocol –
and periodically confirmed through reconciliation and security audits?
8. Does the Provider have the certifications to differentiate their capabilities? These certifications ensure that the Provider has
developed well documented processes and follows those with great discipline.
• ISO 9001:2015
• ISO 17025
• ISO 27001
• Intergraf
• Other
9. Is the Provider able to offer extensive documentation of strategy implementation experience in your industry with several
multi-year customer relationships?
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CLOSING REMARKS
Falsified and diverted medicines present a critical risk to patient safety and can have a devasting impact on an emerging pharmaceutical
company, creating a lack of confidence in the product and a serious financial risk. Without a consistent global strategy to combat
potential product compromise, the pharmaceutical industry must assume an active role in the monitoring, authentication, and
enforcement of pharmaceutical crimes. Implementing risk-based anti-counterfeiting strategies is a critical component of a product
launch and can be accomplished efficiently and effectively by engaging industry experts and technology partners capable of integrating
an effective ACP into your existing product launch process.
Failure to take early steps in assessing risks and designing effective defensive strategies to combat supply chain compromise can be
a key opportunity missed by small and mid-sized pharmaceutical companies who often find themselves reacting to adverse events
after the product is commercialized. To avoid this unnecessary risk, companies should be proactive early in the process to defend
their products.
One of the first steps in this process is the engagement of an industry professional and qualified security solution provider capable of
offering a series of options. Leveraging these resources early will accelerate development and ease implementation as you define the
next steps in building your company’s ACP.
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Work with Authentix
Let Authentix help you manage risk rather than react to problems. We thrive in supply and distribution chain complexity,
providing innovative authentication solutions that help you effectively mitigate risks to promote revenue growth and
competitive advantage. For more information, contact info@authentix.com.
Co-Author
Hillcrest Advisory Group advises, architects, and supervises Product Security programs and teams. With three decades
of experience across a wide range of industries and businesses, we know how to identify potential risks and breaches –
natural or manmade, random or targeted - and can help you avoid, eliminate, or minimize their impact on your business.
For more information, contact chrisloweryhillcrest@outlook.com.
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