Battling drug diversion—are pharma companies well equipped?

Dec 18, 2023
By Systech

Drug diversion and counterfeiting are a lucrative business for criminals—netting them an estimated $431 billion each year, according to the World Health Organization (WHO). And it’s not limited to large syndicates but also, scarily, people operating out of their homes. A recent CNBC investigation found criminal networks altering pill bottles of lifesaving drugs and selling them back to pharmacies at large discounts via licensed distributors. The illusion of legitimacy is terrifying. Counterfeiters and diverters have no regard for consumer safety or governmental oversight. They do not care about the patient, only care about money. 

Pharmaceutical companies must continually fight criminals who tamper with prescription drugs. They lose billions of dollars annually to product diversion. Product diversion—or the unauthorized distribution of products to unintended markets or unauthorized retailers—is a widespread challenge across industries. Here is one example of how diversion works in pharma: A patient fills a prescription for a medication worth several thousand dollars and then sells it for a fraction of the cost in cash. The buyer removes the patient’s information, alters the bottle, and sells it to a wholesale distributor who sells it back to the pharmacy at a discount. The same bottle reenters the supply chain.  

Diversion and counterfeiting go hand in hand. Even if it is an authentic product that was diverted, it is likely that the product was not handled with care, and that it was tainted or diluted somehow. Patients often do not get the effective, life-sustaining medicines they need. Negative consequences such as quality control issues, price erosion, brand dilution and consumer loyalty issues impact brand integrity. 

Fighting back begins with rooting out illicit sellers in the supply chain. It is all about comprehensive visibility—but achieving this is no small task. In the CNBC interview Lori Mayall, head of anti-counterfeiting for Gilead Sciences, likens it to a game of “Whack-a-Mole”. The process is complex and difficult to detect even after an issue is discovered.  

How Systech can help address drug diversion 

Systech offers comprehensive solutions to help manufacturers and distributors combat drug diversion effectively, building on the foundation of regulatory compliance and going well beyond.  

  • Serialization: Systech’s serialization solutionsenable brands to assign unique identifiers to each product. This approach allows for real-time tracking and monitoring, making it challenging for diverted products to go unnoticed.  
  • Track and Trace: With Systech’s industry-leading track and trace capabilities, manufacturers can monitor the movement of their products throughout the supply chain. This monitoring helps identify and address diversion and unauthorized distribution.  
  • Digital Product Authentication: Systech provides a non-replicable, non-additive, covert digital product authentication solutionthat works with existing 1D and 2D barcodes and packaging to deliver immediate counterfeit detection. With an easy-to-use smartphone app, brands and their trading partners can instantly verify product authenticity—anywhere in the supply chain.  

Systech’s anti-diversion solutions are vital in safeguarding the medicinal drugs supply chain from the challenges of unauthorized distribution. Implementing these advanced tools ensures product quality and patient safety while minimizing revenue loss. In an industry where authenticity and quality are paramount, Systech is a powerful ally in the fight against diversion. 


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