Authentication and Pharmaceutical Protection: An Industry Roundtable

September 2, 2010
Pharmaceutical Technology, Pharmaceutical Technology-09-02-2010, Volume 34, Issue 9

PharmTech talked to anticounterfeiting experts to discuss terrorism as a source of counterfeit products.

The growing problem of counterfeit drugs poses an increasing threat to public health and the health of the pharmaceutical industry. Pharmaceutical Technology conducted a round-table discussion focused on authentication technologies as a means of identifying and detecting genuine products, and it begins by looking at terrorist organizations as producers of counterfeits. A Q&A with John D. Glover, formerly of the FBI and US State Department, discusses links between terrorism and counterfeits and identifies technologies and methods to fight fake drugs in the supply chain. Representing the field of authentication technologies, experts from ARmark Authentication Technologies and NanoGuardian examine on-dose techniques. Finally, hand-held devices and mobile solutions are addressed with input from the US Pharmacopeia, Thermo Scientific, and Sproxil.


Links to terrorism

Discussing the relationship between counterfeits and terrorism is John D. Glover, DPA, whose 35-year career includes work with the FBI, Bristol-Myers Squibb (New York), the Pharmaceutical Security Institute, and the US State Department. He is currently head of the security advisory board for Nano-Guardian (Chicago), a provider of on-dosage authentication technology.

PharmTech: Can you explain how terrorism is connected to counterfeiting?

Glover: The link between counterfeit goods and terrorism is difficult to assess because of the complex and global network of individuals, organizations, goods, and finances involved. However, during the past several years, various unclassified reports have clearly established this linkage. These reports indicate that the theft of intellectual property (IP) rights through the counterfeiting of consumer goods is a large and growing criminal enterprise.

In 2000, Terry Anslow, chief investigator of the Crime Unit of the European Leisure Software Publishers Association, reported that terrorists have found counterfeiting to be a lucrative means of raising funds. As early as 2001, Alan Slobodin, senior counsel for the US House Energy and Commerce Subcommittee on Oversight and Investigations, stated that there was strong evidence linking the sale of counterfeit medicines on the Internet to terrorist organizations in the Middle East.

In 2002, the US Customs Service warned of an increasingly close connection between transnational crime and terrorism, with the profits from pirated and counterfeit goods being the strongest link. In 2003, the secretary-general of Interpol reported that the pirating of products such as computer software, CDs, and DVDs was becoming the preferred method of funding for a number of terrorist organizations. He mentioned direct and indirect connections between counterfeiting and Hezbollah, Chechen rebels, extremist groups in Kosovo, and al-Qaida, among others.

Hand-held authentication

The US State Department, in 2004, wrote that the tri-border region of South America—Argentina, Brazil and Paraguay—is a regional hub for Hamas and Hezbollah fundraising activities, including the manufacture and distribution of pirated goods. In 2005, the International Anti-Counterfeiting Coalition posited that there is sufficient evidence that terrorist organizations are exploiting America's IP and profiting from the manufacture and sale of pirated goods.

Additionally, some law enforcement agencies have linked al-Qaida to the sale of fake perfumes and shampoos.

PharmTech: Do you know of examples of counterfeit pharmaceuticals being used to fund terrorist organizations?

Glover: If a direct link between counterfeit goods and terrorist organizations is difficult to establish, then the linkage between counterfeit pharmaceuticals and terrorist organizations is even more knotty. There are, however, a few specific unclassified examples, although somewhat dated.

In the early 1990s, the Irish Republican Army (IRA) set up a laboratory in Florida to produce fake vials of an antiparasitic drug for livestock. The labels for the fake pharmaceuticals were printed on a Northern Ireland farm. Proceeds from the operation were sent to the IRA to purchase arms.

Although not directly on point, it was widely reported in 2002 that Hezbollah generated millions of dollars by smuggling pharmaceuticals from Canada to clandestine labs in the US to produce methamphetamine.

PharmTech: Have terrorists groups traditionally used counterfeiting to raise money, or is this a recent phenomenon?

Glover: Experts currently believe that because the traditional sources of funding for terrorists groups are being restricted by US law enforcement agencies and our allies, terrorist organizations have turned to profiting from the manufacture and sale of pirated and counterfeit goods. International law-enforcement activities are believed to be making a difference in the sources of funding of terrorist activities. Terrorists are avoiding formal financial channels, and are engaging in riskier behavior such as smuggling, pirating of goods, and counterfeiting.

PharmTech: Do you think stricter penalties are necessary to stop the flow of counterfeit goods?

Glover: Counterfeiting is a serious crime that poses a threat to health and safety, yet the criminal sanctions against this heinous behavior are light. Given the potential for large profit, coupled with a low detection rate and comparatively light sentences, there is little to deter potential violators. This needs to change, and laws need to be strengthened. Law enforcement sanctions should be more comprehensive, sentencing should be stronger, fines made larger, assets seized, and violators within the healthcare system prohibited from engaging in future medical-related activities.

PharmTech: What can be done to fight this problem at the governmental, industry, and consumer level?

Glover: At the governmental level, because the linkage between counterfeiting and terrorism takes place within an international framework, the solutions must also be international in scope. Intergovernmental cooperation is essential to addressing this problem. This includes harmonizing and strengthening international laws, and greater cooperation among law-enforcement agencies, customs officials, and the judiciaries. Additionally, governments should promote the creation of international standards to facilitate the development of track-and-trace technology.

Further, governments should alert the public of the dangers of purchasing medicines outside of the tightly regulated distribution chain, of the perceived level of counterfeiting believed to be in the supply chain, and the potential harmful effects of consuming them.

From an industry standpoint, manufacturers should place greater emphasis on technological solutions to vulnerabilities within the supply chain, not only using electronic track-and-trace technology with respect to packaging, but by using overt, covert, and forensic features directly on the product.

Consumers need to develop an understanding that "cheap" and Internet-purchased medicines have a high risk of being counterfeit or otherwise compromised in some potentially harmful way. They should also be made to understand that by purchasing product outside of the normal distribution chain, they may be supporting organized criminals and terrorists when this can be proven.

The issue of terrorist groups raising funds through the manufacture and sale of counterfeit goods must be addressed in a comprehensive way. This includes better intergovernmental cooperation, stronger laws, improved technology, and greater consumer awareness.

Regarding pharmaceutical supply-chain protection, most of the emphasis has been placed on package security, with a focus on electronic product codes such as radiofrequency identification (RFID) and two-dimensional (2D) barcoding. Package security is an important step that will provide a level of security, but it does not ensure the authenticity of the product. This is especially true when the majority of prescription medicines are legitimately repackaged before they reach the patient.

Therefore, greater attention needs to be paid to product, or on-dose security. On-dose security with overt, covert, and forensic features represents an ideal solution. The investigator in the field can authenticate a product through its overt and covert features. A more detailed level of authentication can be obtained by laboratory analysis when forensic-level authentication features are used.

On-dose authentication technology

Placing authentication technology directly on the dosage form allows drug manufacturers to identify counterfeit or substandard drugs that have entered the supply chain. On-dose technology uses physical chemical identifiers (PCIDs) such as inks, pigments, flavors, and molecular taggants containing unique properties. The US Food and Drug Administration released a draft guidance for industry, Incorporation of Physical Chemical Identifiers into Solid Oral Dosage Form Drug Pro ducts for Anti-counterfeitingin July 2009. Pharmaceutical Technology discussed the use of PCIDs and the draft guidance with John D'Ottavio, quality and regulatory affairs manager for ARmark Authentication Technologies (Glen Rock, PA), a provider of custom authentication systems to fight counterfeiting, and Dean Hart, executive vice-president of NanoGuardian.

PharmTech: What are the challenges a manufacturer may face when implementing PCIDs in terms of cost, operation, or other issues?

D'Ottavio: The major challenges that we have seen are related to the control of knowledge regarding the use of a PCID (i.e., who within the company should have knowledge of its use) and the breadth of scale to implement a PCID technology (i.e., on which products and regional versus global use). ARmark sells and markets the covert micro-tag PCIDs as a specialty excipient, a decision that has enabled us to avoid cost hurdles associated with licensing. In addition, adopting covert micro-tag technology does not require any incremental capital expenditure because it is an additional excipient that is added during re-constitution of the film coating. For these reasons, cost has not been a prohibitive factor in the acceptance of this technology.

PharmTech: What can a manufacturer do in advance to ease implementation?

D'Ottavio: Manufacturers of drug products can perform risk analyses to identify the products at greatest risk for counterfeiting to prioritize the implementation of PCID technologies. Additionally, controlling the knowledge of the use of PCIDs is paramount for covert security features, and therefore, internal communication, as well as external communication, should be limited to a "need-to-know" basis.

PharmTech: Can you discuss the impact of the PCID draft guidance on industry's anticounterfeiting efforts?

Hart: It is obvious that FDA sees the importance of on-dose technologies in the fight against counterfeiting and illegal diversion. Although FDA guidance is certainly needed when manufacturers are adding any type of chemical substance to a product, we are hopeful that the final FDA guidance will not be relegated to PCIDs only, but rather expanded to include more advanced on-dose technologies such as forensic markers, which add nothing to the dose yet provide equal, if not more comprehensive, protection against counterfeiting and illegal diversion given its layered security.

PharmTech: How can the pharmaceutical industry protect itself and consumers from counterfeit drugs?

D'Ottavio: Protecting the dosage itself, which is ingested by the patient, should be a critical concern in the hierarchy of counterfeit-resistant technologies. Protection must start with the identification and authentication of the dosage form because the distribution process for drugs involves repackaging, which is a vulnerable point for counterfeit product introduction.

Counterfeit-resistant technologies for protecting the package and supply chain will be far more effective when the dosage itself is also protected with on-dosage identification and authentication technology.

Hart: Manufacturers must realize that the enemy in this war is highly motivated, connected, and resourced. Traditional methods of brand protection, while still valuable, are waning in benefit. It is a new-age battle that requires manufacturers to fight with everything at their disposal, including state-of-the art technologies that protect the integrity and therapeutic benefit of each and every dose.

Hand-held and mobile authentication technology

Hand-held devices that detect counterfeit or adulterated drugs can provide authentication in the field. A potential collaboration between FDA and the US Pharmacopeia focuses on hand-held device applications and the development of references for rapid screening of drugs. In addition, the use of mobile phones for authentication at the consumer level is underway. Pharmaceutical Technology discussed these topics with William Koch, PhD, chief metrology officer at USP and Alden Zecha, chief financial officer and strategist of Sproxil (Boston, MA), a provider of brand-protection solutions.

PharmTech: Can you elaborate on the nature of the devices and applications under review by FDA and USP?

Koch: We are looking primarily at hand-held approaches. Companies have access to a variety of spectroscopic-based handheld instruments to make measurements largely for identity purposes (e.g., Raman and near-infrared spectrometry). These hand-held instruments are now becoming sufficiently robust to take into the field and acquire quality information about materials. This is a useful first-line defense against the spread of substandard and counterfeit medicines. USP and FDA are discussing possibilities of creating libraries of the various spectra to serve as a rapid reference when such tools are used in the field to distinguish genuine products from substandards and counterfeits.

PharmTech: Will the requirements of this type of technology be integrated into USP s standards?

Koch: Hand-held devices at this time are limited in scope with respect to the types of physico-chemical properties and are intended primarily for rapid screening purposes only. At this time, we do not foresee including hand-held methods in the USP compendia. As technology advances, this may change.

Mobile authentication. Sproxil provides anticounterfeiting support in Nigeria that enables consumers to verify the authenticity of their prescription drugs using mobile phones. Medications contain a scratch card on the package, and when a consumer scratches the card and sends the unique numbers under the scratch material via text message for confirmation, a reply text will indentify the product as legitimate or fake.

PharmTech: Can you discuss the drug-authentication initiative launched in Nigeria? Zecha: Nigeria's National Agency for Food and Drug Administration and Control (NAFDAC), embraced the service and have openly encouraged, but not mandated, that pharmaceutical companies use our solution. Our service is paid for by the pharmaceutical companies operating in Nigeria. It delivers consumer goodwill as well as marketing benefits, and also allows the companies to displace counterfeit products and thus sell more of their authentic products.

PharmTech: What regulatory issues arise with the use of Sproxil's technology?

Zecha: Using Sproxil's service usually requires getting regulatory approval for a packaging change. The change, how-ever, is often very small and the Nigerian regulators have been very open to these changes as they see the benefit to the public. Our service has already helped regulators and distributors to confiscate counterfeit medicines. Consumers identified fakes that did not have our labels and have called us to report the suspected products. We shared that information and the authorities took swift action.

PharmTech: Is Sproxil involved in any similar programs in the US or with any pharmaceutical companies?

Zecha: Sproxil does not currently have any initiatives in the US. We have been approached by some pharmaceutical companies to look at adapting our service to help promote patient compliance, and we are in discussions with several large global pharmaceutical companies.

PharmTech: Can you talk about the security of the technology?

Zecha: We can't openly discuss the details of the technology, but it is very secure. We recently went through an extremely detailed technical review with the technical security team at a global pharmaceutical company, and after several discussions they were comfortable that Sproxil met all of their security concerns. As for the counterfeiters trying to break the system, it's all about money to them. If the cost and effort to defeat the system is too high, they'll stop counterfeiting our customers' products because they won't be able to make a profit anymore. We have a tagline that says we are "making counterfeiting unprofitable."

PharmTech: Looking ahead, what is the next step for Sproxil?

Zecha: In the near future, in addition to launching some new customers, we'll be announcing our expansion to additional countries.