According to the World Health Organization (WHO), a considerable proportion of the medicines in developing countries are illegal, counterfeit or substandard. In industrialized nations too, however, such products are becoming increasingly available on the market through unlicensed internet pharmacies and underground business-to-business (B2B) platforms, ultimately posing a risk to public health. Chemical products can furthermore be used for illegal purposes such as the manufacture of illicit drugs.
Our approach to anti-counterfeiting
Our company develops and manufactures products of the utmost quality. In order to protect both customers and patients, we secure our products against counterfeiting and are deeply committed to fighting product-related crime. For instance, we collaborate with regulatory and law enforcement agencies at the regional, national and international level. When cases of product crime are identified, we also cooperate with customs authorities in the respective countries, along with Interpol, the World Customs Organization, various health authorities, and our peer industry. Our guidelines, standards and processes apply to all our business sectors and markets worldwide, thus protecting our reputation as a supplier of quality products.
What we mean by product crime
1. Counterfeit products: In line with the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) and WHO standards, we define a counterfeit product as “a product that is deliberately and fraudulently produced and/or mislabeled with respect to its identity and/or source to make it appear to be a genuine product.“
This includes products
- with incorrect active ingredients or concentrations thereof
- without any active ingredients
- with dangerous impurities
- with modified/altered packaging and/or incorrect brand names
- with an authentic active agent, but not one produced under GxP conditions
- that have expired
- that were removed from the legal supply chain (e.g. through theft).
2. Illegal diversion of products: This term refers to the diversion of either chemical or pharmaceutical products from within the legitimate supply chain for illegal export, for use in the production of illegal drugs, weapons or explosives, or for any other illegitimate purpose.
3. Black market crimes: This refers to the sale of counterfeit and/or diverted products via illegal channels such as the Internet, or for illicit purposes.
4. Misappropriation of products: This refers to theft from production sites and warehouses, or while in transit.
How we're tackling product crime
Our Group function Corporate Security coordinates all our anti-counterfeiting activities. All such efforts are carried out under the supervision of our Chief Security Officer and the Head of Environment, Health, Safety, Security, Quality (EQ). Furthermore, all our sites have a Product Crime Officer who investigates potential cases of counterfeiting, acting as the interface between local regulatory and law enforcement authorities, national associations, our Group functions, and our facilities. Depending on the type, violations are first investigated by the unit in charge.
Group-wide anti-counterfeiting network
Our Anti-Counterfeiting Operational Network (MACON) is responsible for globally monitoring and implementing all anti-counterfeiting measures for our products. Along with coordinating preventive measures and the development of security systems, this organization is also responsible for investigations. Comprised of experts from various units such as Legal/Trademarks, Product Security, Export Control, Supply Chain, Patient Safety, and Quality Assurance, MACON is coordinated by our Corporate Security unit. All MACON activities are now overseen by the new Global Anti Product Crime unit, created in 2016.
To investigate suspected cases, MACON collaborates with the appropriate law enforcement agencies and regulatory authorities. This network has allowed us to identify more cases of counterfeiting and take decisive action, especially in high-risk countries. In 2017, MACON reviewed and investigated approximately 128 cases, including inquiries from authorities that arose during backtracking investigations. We furthermore uncovered four underground laboratories that were counterfeiting several of our products.
Our commitment: Group-wide guidelines and standards
Our Crime Relating to Products guideline of Merck KGaA, Darmstadt, Germany describes our goals and strategies for combating counterfeiting. Our Group-wide Product Crime Investigation Standard sets out binding requirements and defines the knowledge sharing process within our company in an effort to provide a solid legal footing for dealing with illicit products.
Enhanced monitoring and reporting systems
We analyze and document all counterfeit product incidents using a Group-wide reporting system. This approach provides us with a complete picture of the security situation and enables us to identify possible links between different cases, thus equipping us to combat similar future incidents more effectively. Implemented at the end of 2017, our “Data and Documentation Quality Management” SOP details the associated process.
Tracking system for chemical substances
We monitor chemicals that could be misused to produce illegal weapons, explosives or narcotics. These are tracked through an internal tracking system that flags suspicious orders and/or orders of sensitive products, which are only released once we've confirmed the existence of a (verified) end-user declaration.
In addition to fulfilling the duties stipulated by statutory provisions on export control, we also report suspicious orders, inquiries and requests to the competent authorities. Through these efforts, we are honoring a voluntary commitment of the German Chemical Industry Association (VCI) and meeting the terms of the Guideline for Operators published by the European Commission.
Reviewing our efforts
We evaluate the effectiveness of our measures according to the number of reported, investigated and solved cases, as well as their severity.
Supporting customers and patients
We believe that patients should be able to determine the identity and authenticity of a pharmaceutical product themselves. We are therefore rigorous in meeting the requirements of the EU Falsified Medicines Directive, for instance by applying a unique serial number to our pharmaceutical packaging. In the United States, this practice has been required by the Food and Drug Administration (FDA) since the start of 2018. We were the first company to have complied with this requirement by the end of 2015. As an EU company, we are likewise legally mandated to label all pharmaceutical packaging with a unique product identifier by February 2019. We are in the process of implementing this provision.
In parallel to meeting these provisions, we are also pursuing our own initiatives:
- We apply Security M, a security label containing our color travel pigments, to some of our products, taking a risk-based approach to identifying those products that should be labeled in this manner. The Security M enables users to easily verify the authenticity of our products and is considerably harder to counterfeit than the holograms commonly used.
- Through our Track & Trace system, pharmacists and distributors of our products can trace the supplier of the medicine to verify its authenticity. Having implemented this system for all our pharmaceutical products in the United States and China, in 2017 we expanded it to Colombia as well. We intend to furthermore include Europe, the Middle East, Egypt, and Russia by the end of 2018.
- Our free Check My Meds app for smartphones allows patients in the United States and since 2017 also in Colombia to scan the serial number of their medicines and quickly verify their authenticity.
- In our Mobile Anti-Counterfeiting System (MAS) project in Nigeria, we are working closely with one of our suppliers on a text message-based identification system. Patients scratch off a barcode that is printed on the product packaging and then send this code via text message to an assigned number. They immediately receive back a response telling them whether their code is authentic.
- We sponsor the non-profit Global Pharma Health Fund (GPHF), which supplies GPHF Minilabs® to test the quality of 90 different active ingredients. With this compact test kit, counterfeit medicines can be detected quickly, easily and inexpensively, a tool that especially benefits developing and emerging countries. You can find more information on this project under Community.
- We offer our customers in the pharmaceutical industry Candurin® pearl effect pigments, which feature unique color properties that make tablets and capsules more difficult to counterfeit.
In an effort to fight product crime, we have joined forces with organizations such as the European Federation of Pharmaceutical Industries and Associations (EFPIA), the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), and the German Association of Research-based Pharmaceutical Manufacturers e.V. (vfa). We also support industry-wide initiatives. For instance, we work particularly closely with the Pharmaceutical Security Institute (PSI), a non-profit organization dedicated to protecting public health by sharing information on pharmaceutical counterfeiting and initiating enforcement actions through the appropriate authorities. Our Chief Security Officer is the Vice Chair of the PSI Board of Directors. Furthermore, we are a member of Rx-360, a consortium of global pharmaceutical manufacturers and suppliers that aims to prevent counterfeit products through the introduction of a global quality assurance system.
Educating our employees and business partners
We endeavor to raise awareness of product crime among our employees and business partners, educating our people worldwide on the subject. In the countries where we don’t have our own subsidiaries, we offer training for our business partners.
All staff involved in security, such as Product Crime Officers, participate in onboarding and training programs aimed at building their capacities and promoting idea sharing. We are constantly refining these programs and adapting them to new trends. In 2017, for instance, we held incident reporting & intelligence systems training for our Product Crime Officers.
Security audits for contract manufacturers and distributors
We regularly check whether our distributors and contract manufacturers are complying with GMP and GDP (Good Manufacturing Practice/Good Distribution Practice). In doing so, we also ascertain the extent to which our security requirements are being implemented. In general, our contract partners meet these requirements. However, special security audits are conducted if significant deviations are identified. Such audits are also conducted when we certify external service providers for our Security M label. This applies to both pharmaceutical contract manufacturers as well as print companies that print packaging. This auditing system is based on the EMA ICH Q10 pharmaceutical quality assurance standard. In 2017, we conducted ten security audits of our partners worldwide, who have since taken the necessary corrective action.