In the air: How smart packaging is fighting counterfeit drugs

Gillian Ewers, vice president of marketing at PragmatIC examines how smart packaging is benefitting the pharmaceutical industry and helping to combat counterfeit drugs. 

The worldwide pharmaceutical market is huge – it was estimated at over $1 trillion in 2016. A growing portion of this market is over the counter (OTC) medicines that are projected to be worth $178 billion in 2024, driven in part by governments encouraging people to check with the pharmacist before going to A&E (accident and emergency) to reduce the non-urgent load on hospitals.

An increasing number of people are purchasing OTC medication online and the speed of growth in this segment of the market has focused the attention of the pharmaceutical industry, especially after Amazon’s quiet launch of its own branded products.

High revenue markets are very attractive to counterfeiters, who can reap high profits by either copying the formulation or making up a far more dangerous product that looks just like the original. The value of the total counterfeit pharmaceutical market is estimated at $200 billion of which online sales are estimated at around $75 billion. The World Health Organisation (WHO) claims that 16% of counterfeits contain the wrong ingredients and another 17% contain the wrong levels of necessary ingredients. Which means these illegal items can be harmful, or even fatal.

There is also the issue of grey market diversion, which is when products are not counterfeit but are sold outside approved supply agreements. In general, the goods are bought in a low-priced region/country, and then sold in another for a much higher price. Or in the case of pharmaceuticals, this can be medicines that are OTC in one country, but under prescription, or prohibited in another territory. Therefore, grey market diversion is not only a problem for suppliers, but also for consumers. Whilst it is not illegal to buy from grey market sources, there could be significant consequences if, for example, pharmaceutical products come without local language instructions or information.

There are efforts to address concerns about authentication, such as the European initiative to serialise all drugs. The US is well along its path to package level traceability by 2023, but less developed countries lag behind, with the consequence that they have high levels of drug related criminal activity.

Across the board, one of the challenges for small and medium sized companies to meet new regulations is that their packaging lines are often very traditional, with a focus on high volume production as margins are so slim. The equipment is not set up to meet individual serialisation package requirements, and the investment in new digital printing lines that are capable of per unit identification are often beyond the reach of many converters.

A possible approach to this is to rethink the whole problem and use technology such as RFID (Radio Frequency Identification) and NFC (Near Field Communication) solutions which can simplify serialisation but also bring other benefits. Adding a small integrated circuit (IC) into a package gives it a unique identification (UID), which can be tracked globally through the distribution supply chain and into the retail environment and can be used to assure every member of the supply chain of its provenance. This can also be used to deliver the same information to the consumer, as well as other details that can be relevant to where they are when they interact with the product. For example, complementary products and counter-indications whilst in-store, then links to online forums and support groups when at home, even re-ordering facilities, all in their chosen language – and with a readable font!

The technology has been available for some time, so why haven’t companies been implementing this into everyday pharmaceutical products? So far, it has not been economically viable for high volume OTC products, that are generally lower priced. What is required are truly low-cost ICs that are also imperceptible to the consumer and fit with existing high throughput packaging lines. Fortunately following the launch of a new generation of ICs, there is now a real prospect of bringing the benefits of item-level digital traceability and interactivity to pharmaceutical products across the globe.