A rise in the incidence of cargo thefts in the pharmaceutical industry requires a cross-functional response from individual companies, the industry, law-enforcement organizations, and other stakeholders. The author discusses strategies for an proactive cargo security and antitheft program, including best practices used by Pfizer.
Cargo theft, for many years, was a problem that largely plagued the electronics industry, but criminals have recently shifted more attention to the far more lucrative pharmaceutical trade. In March 2010, thieves masterminded a heist of $75 million worth of cancer, psychiatric and blood-thinning drugs from a Connecticut warehouse by cutting a hole in the ceiling and dismantling alarms during a severe storm that masked their activities from the local authorities (1). To curb future cargo theft, it is imperative that pharmaceutical companies develop solid, globally applicable conveyance security programs.
A clear and present dangerThe Connecticut incident drew a lot of attention to the level of sophistication used by organized crime when targeting pharmaceutical cargo. Soon afterwards, FDA issued a letter expressing its concern over the growing frequency of cargo and warehouse theft, the threat these activities pose to patient safety, and the need for manufacturers and others in the supply chain to take proactive, preventative measures (2). More important than the loss of property, when criminals reintroduce to the supply chain stolen medication that was not stored, refrigerated, or distributed as required to maintain product quality, unknowing consumers can receive tainted or ineffective drugs that could hurt or even kill them.
The rise in cargo theft is largely being fueled by the fact that penalties for stealing and distributing stolen pharmaceuticals are far less than dealing in illicit drugs, and the value of a single pharmaceutical shipment can be far greater than electronics, cigarettes, alcohol, or even firearms shipments. Surprisingly, in many cases, cargo theft is reported as "vehicular theft," a crime that carries a relatively low bond, which allows thieves to be quickly released to return to their work. Furthermore, a charge of vehicular theft also does not take into account the full value of the cargo. A top-of-the-line refrigerated truck costs about $500,000, but a pharmaceutical shipment could easily contain $20 million of product. The truck is most often recovered, but empty of its cargo.
Until criminal penalties are increased to reflect the cargo's real value and the potential risk to public safety, it is unlikely that this growing illegal activity will subside any time soon. Attention is growing in this area, with the FDA's Office of Drug Security, Integrity and Recalls (ODSIR) targeted to specifically deal with counterfeiting, cargo thefts, and supply-chain threats in 2012 and legislation proposals such as the Safe Doses Act. For example, amendments introduced to the Safe Doses Act in May 2011 specifically addressed penalties, proposing increases of up to 20 years for pharmaceutical thefts.
Developing a cargo security and antitheft program
To develop a proactive cargo security and antitheft program, the first step is to understand how criminals work today, so newly installed systems are not protecting against yesterday's threat. Criminals are not restricted by corporate or governmental processes and are quick to adapt to changing preventative strategies. Recent trends observed in Brazil, for example, include the use of fake police checkpoints to intercept shipments (3).
The factors for cargo in transit vary, depending on the location around the world. Most cargo-jackings in the United State are nonviolent in nature and often occur when the driver goes into a rest stop and returns to find the truck gone. In other parts of the world, such as Latin America, cargo theft is more prevalent and can be more violent. Drivers are often kidnapped at gunpoint and later dumped in an isolated place. To complicate the situation, local police are sometimes complicit in the crime. Such conditions require out-of-the-box but potentially simple solutions. For example, to protect its employees and products, Pfizer sends only smaller shipments into these high-risk regions to make each cargo shipment less valuable and less desirable to potential thieves.
Freightwatch provides a succinct summary to the state of cargo theft globally in its 2011 report. "The volume of cargo theft grew throughout the Western hemisphere, with the United States, Mexico, Brazil, and other South American countries reporting substantial increases in theft," said the report. "By contrast in Europe, overall reporting of cargo theft rates were down while the average value per loss rose sharply, most notably in the United Kingdom, France and Germany" (4).
Despite appearances, these are not crimes of opportunity. Organized crime rings stake out facilities over time to gather information about the types and timings of shipments. Unfortunately, large-scale distributions systems cannot easily avoid routine schedules. There are other means of protecting cargo, however, some of them as simple as backing up a truck closer to the loading deck so those surveying the site cannot see what is being loaded and patrolling property perimeters to discourage unwanted observers.
Prescription medications are not the only target. Over-the-counter drugs and baby formula are at risk as well because they are relatively easy to resell. In general, most consumers do not think twice about buying a brand-name product at a flea market as long as the seal is intact. Few people stop to think about why the price is so low or consider that the product was probably stolen. If they did, they might also realize that the product was probably not handled in a manner designed to preserve quality or ingredient integrity.