Across the globe, the pharmaceutical and chemical industry is confronted with product-related crime.
Counterfeit medicines in particular pose a major challenge, while also representing a serious threat to public health. According to the World Health Organization, a considerable proportion of the medicines for sale in developing health care systems is counterfeit or substandard. Interpol estimates this at up to 30%. This issue is aggravated by the lack of adequate protection, security and drug approval systems. Due to the sale of products through unlicensed internet pharmacies and online underground business-2-business platforms, the percentage of substandard and/or counterfeit medicines is growing rapidly in industrialized nations as well.
Info box: Product-related crime
Key aspects of product-related crime
Counterfeiting (including illegal production):
- Counterfeit products and/or packaging and/or active pharmaceutical ingredients (APIs) and/or excipients
- Product with an incorrect concentration of the active ingredient, with unsuitable and potentially hazardous active ingredients
- Products without active ingredients, with counterfeit or incorrect labeling and/or packaging and/or brand names
Diversion into illegal distribution channels:
- Illegal export of pharmaceutical products, or misuse of chemical products and substances to produce weapons, explosives or narcotics
Black market crime:
- Selling counterfeit and/or diverted products through illegal channels or for misuse
- Theft/robbery: Warehouse theft, freight theft, vehicle theft; theft from production plants
Because criminal organizations are becoming increasingly professionalized, pharmaceutical manufacturers are facing ever-growing requirements to track and monitor their products. Effective protection systems are becoming more and more important for both the products themselves as well as the distribution channels.
Merck KGaA, Darmstadt, Germany develops and manufactures products of the utmost quality. We take action against product-related crime to prevent harm from coming to customers and patients, as well as to protect our reputation as a company. To this end, we focus on various areas in the company and support global initiatives.
The Group function Corporate Security is the internal and external point of contact for all anti-counterfeiting activities of the Merck KGaA, Darmstadt, Germany and is also in charge of steering and coordinating these activities as well. Here, Corporate Security follows the “Crime relating to products of the Merck KGaA, Darmstadt, Germany” guideline, which describes the goals and strategy for handling product-related crime. At all prescription medicines division sites, we have deployed local anti-counterfeiting correspondents who act as the interface between local regulatory authorities, associations, Merck KGaA, Darmstadt, Germany functions, and Merck KGaA, Darmstadt, Germany's divisions.
Our Anti-Counterfeiting Operational Network (MACON) consists of experts from various fields such legal/trademarks, product security, export control, supply chain, and quality assurance. This network is responsible for monitoring and implementing anti-counterfeiting measures for all products worldwide. This includes coordinating preventive measures, sharing information, securing evidence, conducting investigations, and developing and implementing security systems. The network collaborates in appropriate cases with the relevant regulatory authorities and law enforcement agencies. Annually, MACON reviews and handles more than 100 cases of product-related crime.
Authenticity and tracking
Besides implementing internal quality control systems and also strictly adhering to all export and trade guidelines, we also combat counterfeit products through innovative solutions that are tailored to specific markets and target groups. With these measures, we aim to help our customers and patients determine for themselves the authenticity of a pharmaceutical product. Here, we are applying multiple approaches in parallel.
On product packaging and labels, we use security markings with protected color travel pigments of our own manufacture, which enables users to easily verify the authenticity of our products. These security features are considerably harder to counterfeit than the holograms that are frequently used.
We employ identification and shipment tracking programs such as Track and Trace, which has been instituted for certain products in certain markets. In the Mobile Anticounterfeiting System project in Nigeria, Merck KGaA, Darmstadt, Germany is partnering with a supplier to detect counterfeit medicines. In addition to this, we have also created a mobile phone/text message based identification system. After scratching off a barcode affixed to the product packaging and sending it via text message, patients immediately receive a text message back telling them whether the product is authentic or not.
We are systematically implementing the requirements of the , such as the application of a unique serial number to our pharmaceutical packaging. Furthermore, we are participating in corresponding pilot initiatives of the pharmaceutical industry.
We are collaborating closely with regulatory authorities to monitor and track chemicals that can be misused to make illegal weaponry, explosives, and narcotics. In doing so, we are abiding by a commitment of the German Chemical Industry Association (VCI), as well as implementing requirements that pertain to the use of chemicals for weapons of a chemical, biological, radioactive, or atomic nature.
In addition to this, a comprehensive auditing system for distributors and contract manufacturers ensures that GMP and GSP (Good Manufacturing Practice/Good Distribution Practices) are adhered to. This system is based on the pharmaceutical quality assurance standard.
For our customers in the pharmaceutical industry, we offer Candurin ® pearl effect pigments, which feature unique color properties that make tablets and capsules more difficult to counterfeit.
In our fight against product piracy, we are involved in organizations such as EFPIA, IFPMA, and VFA; we also support industry-wide initiatives, and collaborate closely with regulatory authorities at a national, regional, and international level. A particular area of emphasis is our work with the (PSI), an organization dedicated to protecting public health by sharing information on counterfeit pharmaceuticals, and initiating enforcement actions through the appropriate authorities. When product crimes are committed, we collaborate closely with the law enforcement agencies and customs authorities in the respective countries, with Interpol, with the World Customs Organization, with health authorities – and with our competitors as well. Furthermore, Merck KGaA, Darmstadt, Germany is a member of , a consortium of global pharmaceutical manufacturers and suppliers that aims to prevent counterfeit products through the introduction of global quality control systems.
Minilab for on-site testing
Merck KGaA, Darmstadt, Germany supports the non-profit Global Pharma Health Fund, which supplies a portable analysis kit (the GPHF Minilab) to check the quality of medicines. With the Minilab, counterfeit medicines can be detected quickly, easily and cheaply, also in developing health care systems. To date, the GPHF has supplied more than 570 Minilabs at cost, to over 80 countries.
Sensitizing our employees
The fight against product-related crime and counterfeit products is an integral part of our risk management system. In order to minimize risks, we provide training to employees of our legal entities, as well as to business partners in the countries in which we lack our own legal entity. In 2011 and 2012, we held multi-day workshops and training seminars in Africa, China, North America, and Latin America. We furthermore conduct audits of our business partners. We are currently drafting a product crime manual and plan to sensitize employees to the topic.