State of emergency: Medical products counterfeiting and diversion

jun 21, 2023
By Systech

There used to be a time when one could discern a fake medical product from an authentic one by just examining the package. Certain external characteristics—or flaws—like a misspelled word or a flimsy material would give it away. Now, printing and imaging technology has evolved and become so inexpensive that counterfeiters can easily obtain it to create packaging that fools even the savviest practitioner.

Online platforms like Amazon and smaller e-distributors have made it near impossible to discern between those selling legitimate and counterfeit goods.

The bottom line is that if you have a product that’s in demand or difficult to get, the gray market will notice. And will try to capitalize on the situation. 

Medical devices and products are developed to help individuals. Manufacturers go through rigorous development and testing before releasing their products to market. There are also numerous governmental quality regulations that manufacturers must follow. These products must also be registered in their intended distribution geography for safety and recall purposes. Strict labeling, including Unique Device Identification barcodes must be utilized.

Counterfeiters and diverters of successful medical products have little regard for consumer safety or governmental oversight. They don’t care about the patient. They only care about money.

The dangers of counterfeiting 

Medical product companies face some big obstacles today. Counterfeiting poses significant risks in all markets. What used to be a perceived threat primarily in Asia-Pac, is now a global issue. The International Anti-Counterfeiting Coalition (IACC) estimates the global value of counterfeiting and diversion at over $1.7 trillion annually. Medical product manufacturers are not immune either due to high profit margins and growing global demand. The World Health Organization (WHO) estimates that one out of every ten medical products in developing countries today are counterfeit.

The pandemic highlighted the scourge of counterfeiting. With unprecedented global demand for personal protective equipment (PPE), the counterfeiters ramped up in parallel. In one month during the pandemic, Interpol shut down more than 2,500 web links, including websites, social media pages, online marketplaces and online adverts for illicit medical products and pharmaceuticals. If these bad actors are eager to profit from pandemic, who knows what else they’d do?

The risks of diversion 

Diversion and counterfeiting go hand in hand. Even if an authentic product is diverted from the intended supply chain and sold on an unauthorized channel, you can guarantee that the product wasn’t handled with care, and that it’s been tainted or diluted in some way. The issue is that it’s not necessarily illegal for these providers to procure products this way, but the effects to revenue and patient safety make it more than worrisome. Diverted medical products can be tampered with, mishandled and even be sold and repackaged after expiry once they exit the legitimate supply chain.

What you can do

Counterfeit and diverted medical devices and products impact revenue, introduce patient and practitioner safety risk and threaten brand equity. Current anti-counterfeiting for these products typically involve additive elements to product packaging like special seals and marks. The ever-expanding gray market has shown us that these types of tactics are inefficient at keeping bad actors at bay. Companies in the pharma sector are beginning to realize this and have begun to get ahead of the issue by implementing a covert anti-diversion program that ensures their products get to the intended destination without any hiccups along the way. This is an opportune time for medical product manufacturers to introduce new digital protection technologies that leverage the core benefits of mobile authentication and verification. 

The only way medical product manufacturers can ensure that their patients, brand and revenue are safe is to introduce the layers of product protection needed for today’s supply chain. Systech delivers a non-additive solution that can’t be duplicated but can be authenticated at every step along the supply chain, all the way through to the patient. 


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