Latest online 'Brandjacking Index' finds illicit pharmaceutical trade on the rise

Pharmaceutical CommercePharmaceutical Commerce - October 2009

MarkMonitor sees 23% growth in offshore business exchanges for bulk pharmaceuticals and APIs

Although the entry of counterfeit products into legitimate pharmaceutical distribution appear to remain limited, there is noticeable growth in trade in bulk products and APIs, according to the latest Brandjacking Index, compiled by MarkMonitor (San Francisco). These products become available to consumers who patronize illicit online pharmacies, and based on some rules of thumb of e-commerce, MarkMonitor estimates that the volume of such sales has reached $11 billion, up form $4 billion in 2007, the first time MarkMonitor performed its study.

MarkMonitor tracks online activity in pharmaceutical e-commerce (and other branded products subject to counterfeiting) by using proprietary algorithms to uncover instances of “cybersquatting”—improper use of brandnames in Internet domains. By following six leading pharmaceutical brandnames, it found 20,000 instances of cybersquatting, including 652 exchanges—up 67% from 2007. By analyzing the volumes available for sale and public records of online traffic, it can derive estimates of the online sources and volume of such trade.

Other results from the study, conducted during the past summer:

  • Within the 652 exchanges, there were 416 selling API in powder form, up 81%.
  • Of the 909% of the exchanges that listed country of origin, China was home to 49%, and India to 17%.
  • Of the 2,930 online pharmacies MarkMonitor found, only four were certified by the VIPPS program of the National Assn. of Boards of Pharmacy; 36% of these are located in the US, and Germany, 13%.
  • Uncertified online pharmacies offered discounts as high as 90% from the prices offered by VIPPS-certfied pharmacies, suggesting “suspicious” quality, according to MarkMonitor.

“Scammers are opportunists, and by targeting the supply chain they’re positioning themselves to move the greatest amount of fake product they can,” said Frederick Felman, chief marketing officer at MarkMonitor. “This maximizes their return on the scam but it also poses a potential danger to peoples’ health and safety, not to mention brand reputation.” The company provides “enterprise brand protection” services to brand owners through its online monitoring services.

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