Protect the Product, Not the Package

There is no shortage of new technologies designed to protect the drug supply chain. RFID gets most of the publicity, but experts acknowledge that it can, in theory, be hacked, while an RFID chip on a package may not guarantee that the product is not diverted. Holograms and other forms of security can be, and are, copied.

One company offering a potential solution that could work in tandem with other security methods is NanoInk.

The technique can even be used to write on biotech products. The materials are already being used in electronics applications, for example, to repair photomasks and flat display panels. However, the technology has great potential in the pharmaceutical industry. Under the leadership of CEO, Dr. Cedric Loiret-Bernal, an MD with an MBA who spent years at Abbott Labs and in biotech, the company is hoping to provide a solution for companies to differentiate their batches.

While he wouldn’t discuss the specifics of how the technology works in pharma, Dr. Loiret-Bernal shared his views on the issues facing the industry, and the need for a robust track and trace solution.

PM – What is the benefit of using nano-encryption technology, as opposed to other security methods?

CLB – The technology allows for full traceability of products on a global basis, allowing one to differentiate between batches. For example, a Lipitor batch made in Puerto Rico yesterday would be different from a batch made in Singapore or Ireland two days from now.

PM – RFID appears to be getting the lion’s share of publicity. What are the weaknesses of that technology?

CLB – It’s a great tool for monitoring inventories, but used alone, it’s not an anti-counterfeiting tool.

PM – What is unique about your product?

CLB – It allows users to view where the batch was made, where it is going to be sent, and generally offers density of information to track lost, recalled or diverted product. Counterfeiting is a global problem. It’s hard to have one solution for the U.S. market and another for Europe. We have two customers now, and are close to having one in Asia. We’re leasing the encryption platform, but selling the consumable tool that allows users to differentiate each batch and each dosage form at each manufacturing site.

When they have quality questions, we can authenticate them in large volumes. We will have six authentication centers around the world, two in the U.S., two in Europe and two in Japan. One of the biggest problems with “packaging only” solutions and RFID, in my opinion, is the fact that the U.S. market is a repackaging market. Once you open the bottle you can put whatever you want in it and simply swap it but make it look like the real product. That’s how vulnerable the supply chain is.

PM – Is this less of a problem in Europe, where blister packaging is so popular?

CLB – Europe is big on blister packs, but counterfeiting technology for blister packs is available, and might give a false sense of security. Even holograms can be counterfeited. One of the biggest challenges that the pharmaceutical industry faces is the fact that whenever you adopt a new technology, organized crime tries to reverse-engineer the solution very quickly.

PM – What should the ideal rollout strategy be, for any pharma company?

CLB – You generally need to start with one or two brands, then bring the technology out to all brands. But the goal should be to defend the product, not the package. You can’t defend product using a packaging only solution. As for ROI, our solution costs a fraction of the cost of RFID. If a $3 billion product is losing $120 million to counterfeiting, our product can cut $25 million in losses immediately. In addition, general counsels would sleep better, because in the event of a product recall, they can identify the source of material. Today, this is a big challenge. The technology can also help companies verify the causes of adverse patient responses — i.e., excipients and active ingredients.

PM – What is pharma’s biggest challenge in securing its products?

CLB – The luxury goods industry spends 0.5% of its revenues protecting product. If pharma spent like this, they’d get a lot done. After all, nobody dies from a fake handbag. There are economic reasons, too. If you spend $500 million to develop a drug, and lose $100 million over the next five years due to counterfeiting and diversion, that’s a great loss. However, right now the industry is still low on the learning curve regarding traceability and anti-counterfeiting.