Counterfeiting and diversion are global issues that impact virtually every industry, with no organisation immune to the potential damage. Across markets, counterfeit and diverted products pose a threat to manufacturers, retailers and consumers alike. In turn, this damages a brand’s reputation and sales, leading to significant revenue loss. Although these supply chain threats plague many industries – from medical devices to consumer-packaged goods – the issue is becoming increasingly pertinent in the pharmaceutical sector.
Pharmaceutical Industry a Major Target
Drug diversion and counterfeiting generate an estimated €400 billion annually. It is a major concern given that counterfeit pharmaceutical goods pose a great risk to patient safety and cause injuries, illness and, in some extreme cases, death. What’s more, when patients consume fake medication that fails to treat their conditions effectively, they are deprived of the life-saving drugs they need. This not only compromises patient health but also leads to quality control issues, brand erosion and reduced customer loyalty for the affected brands.
This surge in counterfeit and diverted pharmaceuticals comes amid a period of ever-increasing demand for such products. For instance, the World Health Organisation (WHO) recently issued a global alert about fake versions of Ozempic – a prescription drug that has gained popularity as a quick weight loss solution. This surge in demand has resulted in shortages, providing criminals with the opportunity to introduce fake Ozempic into the market.
Further contributing to the growth in pharmaceutical counterfeiting and diversion is a surge in predominantly fraudulent online pharmacies – those selling products through illegitimate supply chains. For instance, a consumer in the UK buying online from what appears to be a French pharmacy may in reality be receiving expired, mislabelled or counterfeit goods from a completely different region.
Research from the National Boards of Pharmacies (NABP) shows that 95 per cent of websites selling prescription drugs are doing so illegally and endangering patient health. There are an estimated 40,000 illegal online pharmacies operating at any one time, according to the NABP. This allows for bad actors to increase their profits in the e-commerce space.
