The counterfeit pharmaceutical industry is worth around $200 billion annually, which is slightly less than the $246 billion illicit drug trade. Nanotech Security, a Sophic Capital client, has a solution successfully used in the banknote industry which is easily adaptable to prescription pills. The technology is called KolourOptik, and it is a low cost, end-user engaging, near impossible to duplicate anti-counterfeiting technology that can be applied on almost any surface including pharmaceutical pills.
Fake pharmaceutical drugs are the largest, global counterfeit market. Fake pharmaceutical drug margins are high this attracts criminal organizations who have little to fear from the lack of anti-counterfeiting laws. Fake pills are often made exploiting children and migrants, in unsanitary conditions using toxic materials, even reducing dosages to minimize costs and evading taxes.
Sadly, people will die from counterfeit drugs. Interpol estimates that up to 1 million people will die annually from counterfeit pharmaceuticals taking into consideration that 10 to 30% of all pharmaceutical drugs in circulation in the world are counterfeit. Counterfeiting IS NOT a victimless crime – especially in the fake pharmaceutical drug industry.
Let´s have a look to some numbers in different countries. In the United States, the number of new pharmaceutical drugs approved surprisingly few. From 1827 till the end of 2013, only 1,453 drugs were approved. In Nigeria, counterfeit drugs infested the market this last years. A survey found out that almost 20% of Nigerians believe they are victims of the counterfeit pharmaceutical industry. France commandeer 8.8 million counterfeit articles in 2014 (up 15.4% over 2013). Last but not least, the problem of counterfeit pharmaceuticals is especially alarming in Afghanistan. One government ministry estimates that that at least 50% of Afghanistan’s $700 to $880 million pharmaceutical import market is counterfeit.
Authoritied have limited resources to combat fake drugs. Enforcement agencies don’t have the budgets, the time, or the laws needed to combat not only fake drugs but also the counterfeit industry as a whole. Criminal organizations know this and are exploiting these deficiencies. Success is particularly easy in the developing world. Take Colombia and Venezuela, for example. “Contraband drugs is a multi-million (dollar) business that affects thousands of lives and seems to have no end in sight.”
In a more positive note, it seems that technology can stem the rise of counterfeit drugs. There are two types of technologies targeting counterfeit drugs: tracking and authentication. Tracking involves the movement of drugs through the supply chain and typically involves barcodes or radio frequency identification (RFID) for validation. Authentication is for the end user. These consist of packaging holograms, optically variable devices (like holograms but without 3D effects), and colour shifting inks and micro-taggants on packaging or film-coated tablets. Authentication technologies experiences a major weakness. There is no amount or advanced technology of anti-counterfeiting that will protect consumers. Not unless they are educated about the product’s and their anti-counterfeiting measures. Allister McCullum, a former counterfeit expert at the European Central Bank, stated that counterfeiters “aren’t interested in producing near-perfect notes that will get past bank checking machines… They just aim for something that’s good enough to fool the general public.”
Nanotech Security (NTS:TSXV), a Sophic Capital client, has the technology that pharmaceutical companies can use to engaging doctors, pharmacists, and patients at the same time. This technology, KolourOptik, is a nanotechnology solution based upon the optical properties of the blue morpho butterfly. KolourOptik creates a grid of nano-sized holes that imitate the interaction light has with this butterfly’s wings. The outcome is the creation of vibrantly-coloured images comparable to LEDs when illuminated. At the moment, they are focused on the banknote industry, but KolourOptik can be applied to a wide range of surfaces including pills and any type of packaging. There is no additional need for dyes or pigments. Pharmaceutical companies can even embed data in the design thereby allowing all points in the supply chain to track and authenticate the drugs. KolourOptik’s is nearly impossible to duplicate. Unlike holograms, which can be peeled off, KolourOptik images are embedded into the packaging.
We can conclude from this that even with all those obstacles around the anti-counterfeiting, not enough laws, criminal organizations, uneducated consumers, etc. technology is reaching a solution and making big steps towards a less dangerous world.