P+F-Trend Report on Counterfeit-proof Packaging

Trouble for Tricksters

01.01.1970 Brand protection or liability risks, loss of business or health protection – the reasons for addressing the topic of anti-counterfeit security differ in the cosmetics and pharmaceutical industries. However, interest in appropriate solutions has meanwhile awakened in both camps. Changes in Federal German drugs legislation, the FDA’s track and trace initiative utilising RFID technology, as well as health hazards and business risks have been catalysing this trend.


The e-mail offer reads “Viagra, 48 tablets, for just 46 US dollars” and has a link to one of some 350 000 web sites, which advertise the erectile dysfunction drug or offer it for sale. Just how many spam recipients are taken in by such offers is unknown. In the best case the gullible purchaser just loses his money. In the worst case he receives blue pills with harmful content. Because the majority of drugs sold in this way are counterfeit products. Examples are the 40 000 tablets marked “Diagra”, which were seized in Hamburg in August 2003, and presumably also the 3 900 Viagra tablets, found on a Pakistani citizen crossing the Swiss-German border in July 2005.

Not only the pharmacist sees red in the face of audacious forgeries. Suppliers of luxury cosmetics are also exposed to the risk of damage to their brands from the appearance of forgeries. The criminal practices of the counterfeiters reach new heights in the case of expensive, life saving drugs such as Sandimmun Neoral, which suppresses the rejection of transplanted organs. Precisely this example demonstrates that counterfeit drugs are no longer just a third-world problem: Vigilant patients in Germany were the ones who noticed that the detailed appearance of the counterfeit drug deviated from the familiar form.
In our Trend Report on fake-proof drug packaging in P+F 1/2004 (downloadable in German from www.pharma-food.de, keyword “Heißes Eisen”) we already reported on the extent and hazards of counterfeit drugs and on possible countermeasures. What has happened in the two years that have elapsed since our investigations on this topic?
For a start, many manufacturers and responsible persons have now become conscious of the counterfeiting problem. “Meanwhile, much more is actually being done and we have noted numerous article-specific projects”, reports Meino Adam, Head of Pharmaceutical Packaging Development at folding carton manufacturer Edelmann. And Thomas Scholler, Managing Director at marking specialist Jura JSP adds: “After its initial reluctance, the pharmaceutical industry is now using more fake-proof packaging. This trend will become more pronounced in the future.” As a specialist for security features, the manufacturer Hueck Folien has observed that: “The pharmaceutical sector is applying security solutions in those countries where the problems are acute”, including above all Central ad South America.
In the opinion of Frank Waegner, Head of Sales at tesa scribos, the cosmetics sector and automotive suppliers appear to be even more decisive. According to Waegner: “In addition to protecting customers and company sales, brand protection is an important concern for cosmetics manufacturers.”

Anti-counterfeiting Laws too Lax

Legislators are now also focusing more attention on this topic. While there was no mention of counterfeits in the Federal German Drugs Act two years ago, regulations governing the culpability of drug counterfeiters were introduced into the Drugs Act with the 12th Amendment, which came into force on August 6, 2004. “However, these are by no means adequate”, in the consideration of Dr. Martin Wesch, lawyer and Managing Director of the German Quality Association for Pharmaceutical Packaging. On the one hand – according to Wesch – the penalty (imprisonment for up to 3 years or a fine) is much too low compared, for example, to simple theft (imprisonment for up to 5 years or a fine), and on the other hand, it is limited to drugs “for which there is a justifiable suspicion of harmful effects ”. If only placebos are packaged, then only bans on manufacturing without a manufacturing permit or of manufacturing questionable drugs, which both carry an even less drastic penalty (imprisonment for up to 1 year or a fine). Moreover, the regulations do not go far enough and and the facts of the case are difficult to prove: Hardly any counterfeiter will himself offer the fake drug for sale – which has to be proved to make placing a non-approved drug on the market punishable.

Packaging is Pivotal

Packaging continues to play the pivotal role in anti-counterfeiting measures.. Logistics is also of great importance. Experience gained so far in Europe shows – according to Swissmedic, the Swiss Agency for Therapeutic Products – that counterfeit drugs hardly ever reach the medical profession or the pharmacy directly, but are always channelled into the drugs market via a wholesaler or importer.

It is undisputed that one-off individual measures will hardly lead to protection against forgery; only a combination of measures can achieve this aim: “After the initial euphoria that greeted holograms and RFID, there is a growing recognition that maximum possible protection against counterfeiting can only come from a mix of features individually adapted to the specific product”, according to Thomas Scholler.
We reported at length on possible safety features such as package printing, holograms, labels, etc. in the articles listed in the “Download” box. Whereas such features serve above all for identification of counterfeit drugs during distribution or on reaching the patient, current discussion is focusing on the use of RFID solutions with the goal of full drug tracking all the way along the supply chain. RFID – radio frequency identification – provides a means of wireless transmission of data between a transponder chip or tag and a receiver. Comparison with databases should reveal whether a uniquely tagged drug is simultaneously present at different wholesalers or retailers, which would indicate the presence of a counterfeit product.
Pressure to move in this direction is being exerted by the American Food and Drug Administration (FDA), which demands the use of RFID chips in the supply chain in the USA by the year 2007. Manufacturer Pfizer plans to tag all bottles of Viagra sold in the USA with RFID chips during the course of this year, and other drug companies such as GlaxoSmithKline and Purdue Pharma are also planning the introduction of RFID tags. “In the pharmaceutical sector, the re-imports desired by legislators are particularly responsible for the growth of the grey market. Traceability of individual cartons of drugs through the supply chain is therefore becoming increasingly important”, in the view of Dr. Georg Bauer, Managing Director of labelling specialist identif.

RFID Is Still a Vision

Yet there are still numerous obstacles impeding the universal application of RFID technology: On the one hand, there is still no uniform standard, and on the other a uniform RFID infrastructure still has to be created for the entire supply chain. This concept competes with existing solutions such as the barcode systems in pharmacies and wholesalers as well as the German Central Pharmaceutical Number (PZN). A study on “RFID in the Pharmaceutical and Health Industry” (in German, see infoDIRECT) published in June 2005 by Berlecon Research comes to the conclusion that RFID solutions for the pharmaceutical are currently more of a vision than reality and can only be implemented very slowly. Andreas Stozir, Leader of the Competence Team Supply Chain Management RFID at Siemens Business Services (SBS) also expects that RFID- and established solutions will co-exist side-by-side for some time to come. “Yet in the long term cost-benefit considerations will favour radio frequency technology”, according to Stozir. Together with the Swiss packaging manufacturer Limmatdruck/Zeiler, Siemens is working on a comprehensive RFID solution for the pharmaceutical sector.

However, for reasons of cost the principal focus of this technology will continue to be on logistics aspects and traceability. For the cryptographic coding needed for a truly counterfeit-proof RFID solution requires expensive active tags. It is therefore much more likely that a combination with other labelling solutions will continue to be the goal in the future. “All approaches have the common aim of striving to combine counterfeit protection and traceability”, explains Dr. Thomas Bickl, Product- and Brand Protection Sales Director at labelling expert Atlantic Zeiser.

Combined Solutions

Examples of such solutions are Data Matrix codes printed on blister packs and an RFID tag in the outer packaging or a Data Matrix code applied by laser directly to the glass primary packaging matching a printed code in the secondary packaging. According to Bickl: “The trend is clearly in the direction of direct product marking, because it reduces costs, provides better prevention against counterfeiting, and simultaneously constitutes a basis for traceability. This view is also shared by Philippe Leyvraz, Managing Director of Frewitt Printing SA: “In a few years time, individual identification of each dose will be taken just as much for granted as LOT numbers – and perhaps even be obligatory.“ We reported on the marking solution developed for this purpose by Frewitt in P+F 4/05 and other issues (Technopharm Preview, see Download box).

Further trends are to apply marks as close to the product as possible and to undertake marking as closely as possible to production. Georg Bauer (identif) spells out the situation: “Protection should only be applied where the packaging and the product come together and acquire value. Otherwise a security system will automatically generate additional costs for storage and transport.”
As different as the marking solutions may be, it is apparent that for reasons of practical handling – according to Bauer – the trend in ethical drugs is towards invisible marks, which are monitored by pharmacists, whereas for OTC drugs the patient can examine the product himself by means of visible marks. Meino Adam (Edelmann) adds: “Invisible marking is often demanded because the appearance of the packaging may not be altered. As a first step in the direction of counterfeit security we see a trend towards straightforward, cost-effective solutions.”
In a cosmetics sector project Frank Waegner (tesa scribos) found that under certain circumstances the costs for such measures can soon be recovered: “After one of our customers had secured its products with the Holospot system, it informed the trade about this measure and provided a simple tool for authentication. In the following months, the percentage of counterfeit products in the region concerned was found to drop from 30% to almost 0%. The market shares regained in this way amounted to a significant increase in sales.”

Legal Minefield

The question of whether a drug manufacturer is liable for damages if it fails to undertake measures against counterfeiting of its products is addressed by Martin Wesch in an article entitled “Global Threat“ published in German in P+F 1/04. Precisely the hazards to life and health posed by counterfeited drugs demand that every efforts be made by manufacturers to rendercounterfeiting very difficult. Under certain circumstances a consumers can justifiably claim damages in such a case.

Another highly critical aspect is that reputable manufacturers of packaging and of marking solutions can unwittingly aid and abet counterfeiters: Namely, when a conterfeiter claims to be the genuine manufacturer and orders original packaging. Legal expert Wesch therefore demands that “all companies that manufacture or distribute active ingredients or marking- and packaging materials have to verify any order from a pharmaceutical company.”

Conclusion: There is a growing awareness of the critical nature of the topic counterfeit protection. In this context, the supply chain and marking solutions should not be considered separately, future fake-proof solutions will also only be achieved by combined measures. Nor should one be misled here by the FDA’s RFID initiative.

In a few years time, individual identification of each dose will be taken for granted

“In addition to protecting customers and company sales, brand protection is an important concern for cosmetics manufacturers”
Frank Waegener, tesa scribos
“Traceability of individual cartons of drugs through the supply chain is becoming increasingly important”
Dr. Georg Bauer, identif
“Regulations governing the culpability of drug counterfeiters in the Federal German Drugs Act are by no means adequate.”
Dr. Martin Wesch, German Quality Association for Pharmaceutical Packaging
“In a few years time, individual identification of each dose will be taken just as much for granted as LOT numbers”
Philippe Leyvraz, Managing Director of Frewitt Printing
“All approaches have the common aim of striving to combine counterfeit protection and traceability”
Dr. Thomas Bickl, Atlantic Zeiser
“Invisible marking is often demanded because the appearance of the packaging may not be altered”
Meino Adam, Edelmann
“In the long term cost-benefit considerations will favour radio frequency technology”
Andreas Stozir, Siemens Business Services

Heftausgabe: Compendium Customer Manufacturing 2006

About the author

Armin Scheuermann, Redaktion