According to the World Health Organisation (WHO), counterfeit drugs are estimated to have killed 250,000 children a year. With a projected 1 million adults suffering a similar fate.  Counterfeit drugs have also contributed to an increase in drug resistance in treating serious global diseases.

Counterfeiting is a high-volume high-profit business that poses health risks, infringes on intellectual property rights, medicines legislation and other aspects of criminal law. Indirect impacts are loss of revenue for pharmaceutical companies, brand damage and decreased public confidence.

Counterfeit medicines and devices circulate globally via unregulated channels including unauthorised online pharmacies entering the legitimate drug supply chains           

The security, efficiency and resilience of supply chains, is vital for the success of organisations engaged in the delivery of goods and services to market.

The primary objective of supply chains in the healthcare industry is the distribution of lifesaving pharmaceutical products and healthcare equipment. However, healthcare as in any other industry is susceptible to counterfeit goods, leading to increased morbidity and mortality of the end-user or patient.

The global market for fake, substandard, counterfeit and grey market medicines accounts for up to US$200 billion per year. According to the World Bank, there are a host of pharmaceutical products, medical devices and biologics that have been subjected to counterfeiting.

In response to the risk associated with the entry of falsified medicines into the legal supply chain. According to the American Journal of Tropical Medicines, a legitimate or controlled drug supply chain must be either regulated or licensed by a ministry of health or other regulatory body.

Alternatively, a legal drug supply chain is one where a patient would reasonably expect to obtain authentic products, supplied through a controlled supply chain, from the manufacturer of the product to the point of dispensing.  

The European Parliament and the European Council released the Falsified Medicines Directive (FMD) (1), which aims at improving patient safety by mandating that marketing authorisation holders and manufacturers put in place a system to prevent falsified medicines from entering the legal supply chain.

Manufacturers are mandated to apply a unique identifier, a serial number and tamper verification technology to the outer package of medicinal products. Also, since February 2019, a European Medicines Verification System (EMVS) will guarantee the verification of medicines throughout the supply chain and the time of delivery to the patient.

Products that come under the remit of the Falsified Medicines Directive (FMD) include all prescription products, with a few exceptions specified in the Delegated Regulation. The manufacturers of medicinal products are legally obligated the fund the cost of the system.

The prevalence of counterfeit or falsified medicines in the European, supply chain is estimated to be only 0.005%.

Whilst in the healthcare sector of developing countries, in a Pfizer – sponsored study the internet led, counterfeit market in developed countries, was mainly dominated by “lifestyle” medicines, such as weight loss, followed by oncology and influenza medicines. 

The implementation of the European Medicines Verification System (EMVS) is estimated to have cost medicine manufactures approximately €100 Million.  Also upgrading the pharmaceutical packaging lines to apply serialisation and tamper verification features is estimated to cost €500,000 per packaging line.

There are 10,000 packaging lines in the European Healthcare supply chain. The average lifespan of the new software and hardware (EMVS) is estimated to be 5 years, with the application of safety features adding a cost of €1bn per year for generic manufacturers of medicines. There are 10 billion packs of generic medicines dispensed in Europe annually.   

The European Commission acknowledged that the financial impact of the legislation would be felt acutely by the generic medicines industry and Small and Medium-sized Enterprises (SME's). 

As an additional €0.10 in the costs of goods will be passed on to the manufactures of medicines as a result of the implementation of the directive.  However, there are advantages to the implementation of the EMVS, such as;

• More transparency in the supply chain would enable greater predictability for manufacturers to manage the supply of their medicines more efficiently

• Stock management would be improved

• Market demand would be addressed more precisely

• Enabling the prevention of medicine shortages    

The World Health Organisation (WHO) classes medicines as counterfeit if they:

• Are fraudulently packaged or mislabelled concerning the identity and or source. If they are not manufactured for example by a genuine manufacturer

• Contain no active ingredient, incorrect quantities or an undeclared active ingredient

• Are contaminated with other materials such as chalk, boric acid, lead and rat poison being typical examples 

• Are past their expiry date

• Contain no or incorrect patient information leaflets

Counterfeits often display more than one of these features. They are typically distributed through unlicensed sources including establishments in the informal economy, night markets, bodegas and the Internet.