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This year’s Product Security Supplement, despite all the new technologies being offered, and despite the continued progress on the standards-setting and regulatory fronts, represents a three-year downward trend. In 2008, the industry was reaching a fever pitch, but that fever broke when the State of California postponed its comprehensive e-pedigree standards to 2015. In 2009, the question was, would individual companies invest in anti-counterfeiting and brand-protection technologies for the sake of their own products, if there wasn’t an industry-wide consensus on how to proceed? And in 2010, the answer that appears to have come back is, mostly, no. To be sure, the technical activities—and even significant capital investment—are continuing, but on a toe-in-the-water basis, and not as a full-fledged commitment. There is at least as much attention being paid to far-flung (and relatively small) markets, such as Brazil or Turkey, where track-and-trace regulations are coming into place, as there is in the US and Europe.
Nevertheless, counterfeiting, and its shadow partner, diversion, remain high concerns for the industry. The typical industry practice seems to be, hire investigative firms to locate counterfeiters, document a cargo theft or monitor rogue websites, and to react after the fact. A saner policy should be to build a stronger, better defended supply chain that prevents diversion and counterfeiting from entering the picture. But that seems to be a leap the industry is taking painfully slowly, absent a regulatory goad.
Meanwhile, the business values of track-and-trace technologies apart from anti-counterfeiting and anti-diversion keep growing. Even back in the mid-2000s, they were recognized: better inventory control with smoother processing of transactions; more-targeted (and therefore less expensive) recalls and returns; better market intelligence and supply chain visibility. In the intervening years, other business drivers have arisen: the potential to monitor supply chains all the way back to API sources; the desire (and capability) to monitor shipments that require controlled environments (see our coverage of pharma cold chain starting on p. 1); the value of creating a connection—via the pharmaceutical package—between the manufacturer and the patient. This connectivity has truly dramatic possibilities as the parameters of personalized medicine or orphan drug products (see p. 1) come into focus. In these contexts, brand protection almost becomes an ancillary benefit—but one that retains its value.
In discussions about the current and future state of the industry, where more products go off-patent and fewer blockbusters rise up, bird’s-eye observers often comment that Big Pharma is evolving into powerful marketing organizations that commercialize others’ products. (Many other observers, however, strongly resist that perspective.) A related aspect of this perspective is the push by Big Pharma into the so-called “pharmerging” markets, by means of strong branding of their products—even generic ones. If you follow that through to its logical conclusion, the companies that are making the investments now in building high-efficiency, high-visibility, strong supply and distribution networks are the ones who will be winning over the next few years. The investment to create a flexible yet sturdy supply chain network is nowhere near a bet-your-company scale—but it could make all the difference in the marketplace of the future.