Other forms of counterfeiting are to infiltrate the mobile apps, landing pages and software (especially for product authentication and verification) and design them in a way to cheat end consumers and key trading partners. By scanning the codes attached to the final products, it directs them to a counterfeited authentication page, giving them the impression that they are engaged with the brand owner’s website or any governance organization.
In some countries, especially those with low to medium income, fake drugs can reach 50% to 70% of the total amount of products in circulation across their supply chains as mentioned by Gartner. United Nations and The World Health Organization (WHO) have reported many recalls and even deaths of people affected by malaria or cancer due to the consumption of falsified or expired vaccines and drugs. Other countries, especially those where the government sets high taxes for smoking and drinking alcohol, illicit trade is very common. You can account 1 out of 10 cigarettes as fake and even 25% to 40% of spirit bottles or soft drinks are noted to be recycled and filled with fake product. So, what you pay has no representative value for what you get, even if you have no other complications. Added to that, with the COVID 19 pandemic situation and the lockdown of many manufacturers and airports, this has created an emergency crisis to feed and care for populations, especially in countries with high import rates, to treat patients appropriately and on time. It is the ideal period that gives a lot of opportunities for counterfeiters to flood markets worldwide with falsified drugs, fake medical devices, cosmetics, unsafe food, tobacco and beverages sold online.
Many global regulators, governments, brand owners, distributors and service providers are unified against this enormous enemy to protect their brand and consumers. For example, the EU’s Falsified Medicines Directive (FMD) and the US Food and Drug Association (FDA) has set early standards for anti-counterfeiting and patient safety: a comprehensive track and trace infrastructure that can support streamlined validation protocols for product authentication and/or verification and physical security techniques. However, track and trace standalone systems that uniquely identify any saleable product in the global supply chain cannot be fully aligned and optimized to tackle all the immediate incidences and recalls. Approximately 40% of countries are not covered by formal mandates or adopting governmental regulations or even not planning to do so in the next 5 -10 years. Therefore, it is not always possible for companies that export to these countries to rely on standards or formal track and trace regulations to set their strategy in
- delivering safe and original products to patients and
- protecting bottom-line revenue so in consequence to their brand.
A more direct approach to combat counterfeiting, especially across these higher-risk and unregulated marketplaces where serialization deployments are not considered, is realized through product authentication and/or verification solutions, because currently there is no a single dedicated technology marketplace aligned to it.
Many companies have tried different solutions leveraging different technological generations:
- The first one, “the passive generation”, engages more with consumers to detect counterfeiting with simple and visible eye-catching technology such as holograms, tamper-evident security seals, color-shifting inks, watermarks, and other distinctive highlights. Its success is based on the consumers empowerment so they can verify before purchasing a product if it is fake or not. However, by being visible, it can enable counterfeiters to produce similar representations and make it vulnerable to threats. As an example, the currency notes use case shows such technology failure, so another technology generation arises.
- It leverages the concept of “mass serialization” by implementing more difficult, reliable and robust infrastructures to make it even more difficult for counterfeiters. However, in parallel, this makes it more difficult for end consumers as they cannot always verify these products from their simple devices with a smart barcode without referring the solution provider or brand owner. It is considered the second but “active generation” as it adds a new tagging to the product by use of serial number, RFID, DNA or MicroTaggants.
- The third generation combines the previous two generations being easily detected by consumers for “pre-purchase verification” which is robust enough to make it difficult for counterfeiters. This can later be adopted to mitigate such risks in bottled products by: serializing each bottle, applying tamper-evident security seals and by adding a third-layer security code, unique and very difficult to counterfeit.
In conclusion, product authentication can be integrated with serialization but does not facilitate any level of tracking, tracing or monitoring worldwide where regulations are not officially formalized. By working closely with solutions providers and regulatory experts, an integrated approach among all players can tackle the challenges of illicit trade, diversion and counterfeiting. This will help governments to control huge import/ export numbers, raise and collect tax revenues appropriately and reduce health risks to citizens.