NB Health Care
Anti-Counterfeit Technologies Can Save Your Supply Chain: New products help overcome delivery challenges in emerging market health systems
Editor’s note: This article is part of the Market Dynamics initiative on NextBillion Health Care. The ongoing series looks to encourage discussion and understanding around how markets impact health outcomes. Click here to read other articles in the series and here to read an explaination of market dynamics as a concept and practice.
Counterfeit drugs are a growing public health crisis: In 2010, the Center for Medicine in the Public Interest reported that worldwide sales of counterfeit medicines could top U.S. $75 billion, a 90 percent rise in five years. The WHO International Medical Products Anti-Counterfeiting Taskforce (IMPACT) estimates that in many developing countries more than 30 percent of medicines may be counterfeit.
The impact of fake and falsely labeled medicines is significant. In developing countries, where problems with medicines’ safety are particularly acute due to limited resources for surveillance and enforcement, the medicines most often targeted are life-saving drugs such as anti-malarials and antibiotics. While deaths from counterfeit drugs are difficult to measure, one study by the International Policy Network estimates that fake tuberculosis and malaria drugs alone cause 700,000 deaths annually.
Rapid development of new technologies to prevent counterfeit medicines from entering the supply chain and from reaching the end user hold great promise to reduce counterfeit medicines. But these new technologies don’t stop there – the infrastructure and capabilities created by anti-counterfeit technology can also be applied to other supply chain and medicine delivery challenges.
Around the world, inadequate health care supply chains result in stock-outs that prevent millions of people from accessing life-saving medicines. Like counterfeit drugs, chronic medicine shortages disproportionately affect developing countries, where infrastructure is limited and supply chain management severely under-resourced. A study conducted by the International Partnership for Innovative Healthcare Delivery (IPIHD) (which the authors represent) concludes that recent innovation in anti-counterfeiting technology presents a new set of solutions to address key challenges in medical supply chains.
Anti-counterfeiting technologies are designed to enable authentication of a product (whether by regulators or by end users) and to deter counterfeiting by increasing the likelihood of detection and, eventually, prosecution. Anti-counterfeiting is a broad category that includes two types of technologies: one technology enables product authentication and another enables product tracking and tracing (TnT) through the supply chain. Authentication technologies include methods such as watermarks or serial product identification that can be user verified. TnT systems use machine-readable technology such as radio frequency identification (RFID), electronic product codes (EPCs) and barcodes, combined with a system that enables verification of the product provenance and current location.
For example, Sproxil, an anti-counterfeiting technology company in IPIHD’s Innovator Network, originally developed Mobile Product Authentication (MPA) in response to the single biggest problem with fake and falsely labeled medicines: consumers often cannot identify them. MPA addresses this problem by enabling end users to verify product authenticity using a security label. At the point of purchase, customers scratch the label to reveal a unique code on the product which they can validate via SMS, voice call or website. The system immediately provides information about whether the purchased product is authentic or suspicious and can provide instructions in the case of a suspicious product. Originally focused on authentication, Sproxil’s MPA now includes an optional TnT feature that enables tracing via confirmation of product delivery at each point in the supply chain.
Though developed to meet a need for product authentication, anti-counterfeit technology has relevance for other significant supply chain and delivery challenges faced by emerging market health systems.
Reducing product theft and diversion
Diversion occurs when products are transferred from one market to another without authorization. For example, medication may be smuggled across borders or stolen from a public health system for resale in private or informal markets. Theft and diversion of health commodities is a significant problem around the globe. A 2010 study in African markets found that more than 25 percent of artemisinin-based combination therapies purchased in private pharmacies had been diverted.
Anti-counterfeit technology innovations like MPA can help protect purchased and donated commodities against product theft and diversion by using the TnT features, which enable the confirmation of product delivery at each step in the supply chain, and also by capturing information at the point of sale. When consumers attempt to authenticate a product flagged as diverted, the system generates an immediate alert, facilitating the identification of resellers and the tracing of agents involved in diversion.
Improved inventory management
Failures of information in the supply chain cause both stock-outs, which decrease access to medication, and stockpiles, which create inventory waste due to expired medications. The product tracking functions of anti-counterfeit technology can provide actionable information about stock levels to improve supply chain management and reduce stock-outs. When products arrive at a warehouse or service delivery point, product verification via simple SMS, two-dimensional barcodes or other methods registers secure arrival. This verification can be done at the shipment or pallet level and can provide valuable data about stock levels throughout a health system.
Increasing patient engagement and adherence
In addition to addressing supply chain challenges, technologies such as Sproxil’s MPA can facilitate engagement with patients after receipt of medication to encourage appropriate use of medicines. At the point of purchase or dispensing, when a patient authenticates the product, the system can automatically initiate a protocol for follow-up communications, without burdening health care workers to record phone numbers in a system. When authenticating a product, the system can also record any relevant voucher or referral numbers, facilitating integration with other program initiatives.
Ensuring treatment adherence is a particular concern in the context of rising drug resistance and extended drug regimens, such as with tuberculosis treatment and anti-retroviral therapy. To address these challenges, health outreach programs are incorporating text messaging in various ways, and studies have documented their impact on improving adherence, which directly affects health outcomes. Short-duration treatments such as anti-malarial regimens may also benefit from text message follow-up.
Emerging market challenges slowing widespread adoption
While anti-counterfeit technologies can help solve key supply chain and service delivery challenges, there are several barriers to their broad adoption in developing markets: cost, ownership and global standards.
Although anti-counterfeit technology product offerings range in price and complexity, a system-wide implementation (across a large portfolio of products) may not be feasible for developing country health systems. However, there could be significant value to targeted implementation of anti-counterfeiting systems for high-value and/or high-priority products.
The second challenge is the tension between multiple stakeholders in global health supply chain management. Competing objectives may contribute to political resistance to a proposal to create systems that favor specific products (such as HIV drugs) versus investing in system-wide improvements.
Finally, multiple standards and regulations for anti-counterfeit technology globally create uncertainty across markets. Countries around the world and states/provinces within countries are adopting different policies, which makes coordination and implementation of anti-counterfeit technology difficult in a context of multinational supply chains.
Leveraging the full promise of innovative technology
Despite these challenges to adoption, anti-counterfeit technologies hold promise not only to protect against fake medicines, but also to significantly improve other supply chain issues. While costs vary, anti-counterfeit technologies can be implemented at a cost of cents per unit and generate significant net savings to public health systems. It represents an opportunity for health care providers, companies, and governments to work together for a mutual win.
The size of the counterfeit drug problem calls for a solution that can scale to meet the needs of the sector. Technology-enabled solutions, such as those provided by Sproxil, hold promise of scale and efficiency with the potential to create step-change improvements for drug supply chains in emerging markets.
Stay tuned for more learnings from the forthcoming paper “Innovations for the Global Health Supply Chain: Additional benefits of Anti-Counterfeiting Technology,” to be released by IPIHD later this month, and read more about Sproxil’s innovative model.
Lila Cruikshank has a background in business and global health and currently works as a consultant with Global Impact Advisors, and Andrea Taylor is the research project manager for the International Partnership for Innovative Healthcare Delivery.