Pharmaceuticals industry has high entry barriers in terms of ‘Patents’. For each new drug discovery, Pharmaceuticals Companies need to invest hundreds of millions of US$ spread over many years. They need these ‘Patents’ to recover their investment in Research & Development and make decent Return on Investment. Another dilemma is in some countries it Patents are provided a Product and in some countries to a Process. Here is the catch, some developing countries are able to reengineer the formulation and stay out of the purview of the patent. The cost difference in the branded medicine having remaining patent period valid versus generic medicines may be 8-10 time or even more.
Price disparity is one reason for counterfeits. This situation may result in financial loss to patent holding companies but at least customer health is not at peril. The more serious side is drugs beings produced at unapproved facilities, having unapproved formulations and sold for unintended diseases. This has serious health repercussions. In many poor African countries, fake drugs and fake vaccines could be as high as 50% of total sales.
According to World Trade Organization, globally, counterfeit drugs account for 10% of the total market. In some emerging markets this figure goes as high as 30-40%. World Customs Organization estimates the drug counterfeiting business at a staggering US$250 billion a year. Interpol estimates that one million people die annually by consuming counterfeit drugs.
Since industry has high margins, counterfeiters have serious motivation and financial incentive. Counterfeit Products are produced by dubious companies and sold through unorganised wholesale channel.
Serialization and QR codes on blister packs, QR codes on Outer Packs and Cartons are required to track & trace product integrity through all touch points.