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Pharma Manufacturing Establishing A Culture Of Brand Protection In Your Organization By Ron Guido t has been described as the "Crime of the 21st Century." The growing problems of counterfeiting and intellectual property piracy threaten businesses and consumers in nearly every industry sector and within every country. Fake products deprive legitimate businesses of revenue and undermine consumer confidence in their brand names. Consumers I are also adversely affected because they are deceived into buying fake products that don't meet the brand owner's standards and can pose health and safety hazards. In short, counterfeiting is a big problem for society, as well as for legitimate companies that collectively forfeit hundreds of millions of dollars in sales annually. Reliable statistics on this illicit business don't exist, but the International Chamber of Commerce's Counterfeiting Intelligence Bureau estimates that fakes account for 5 to 7 percent of international trade, or about $650 billion annually. While some observers dispute this estimate, it's hard to argue with U.S. Customs and Border Protection, which reported seizures with MSRP of more than $1.2 billion in counterfeit and pirated goods in fiscal 2012. More alarming is the observation that the value of last year's seizures has grown 450% from five years ago. A few years ago, the World Health Organization issued a gross estimate as to the annual market value of fake prescription medicines in the range of $70 billion to $100 billion, or 8 to 10 36 LifeScienceLeader.com percent of all prescribed drug sales. These fakes come in many forms, from no active ingredient to harmful components to "underpowered" doses that lead to drug-resistant diseases. Whatever form the counterfeiter chooses can be lethal. By definition, medicines are "prescribed" to treat disease, so the absence of clinically proven therapy is tantamount to being life-threatening. In reality, there are no benign counterfeits in the life sciences. So this problem — some say "epidemic" — elicits two questions for leaders in life sciences businesses. 1. What factors are contributing to the growth and global spread of brand violations? 2. What can organizations do to protect themselves? Among the many factors which have spawned the growth of illicit commerce (notably counterfeits, trademark infringements, product adulteration, and graymarket diversion), the most enabling are the globalization of the economy and international trade agreements making counterfeit goods easy to hide from underresourced enforcement agents through free trade zones — including the Internet — and the supportive lack of IP rights September 2013 protection in many countries. Many aspects of the counterfeiting problem seem to be beyond the control of legitimate businesses. But one important area over which businesses can exert a large measure of control is the security of their own supply chains. There is virtually no way to prevent a counterfeiter from making fake medicines, but we can build more secure supply networks. Lax security creates opportunities for counterfeit and stolen goods to make their way into the growing network of legitimate production, wholesale, and retail channels. Unfortunately, many businesses do not fully appreciate the bottom-line cost of supply chain insecurity and the adverse impact it has on top-line brand value. So that brings us to the second question. How can your organization establish a culture and supporting infrastructure to help identify fake goods entering the legitimate supply chain? The short answer is that companies with anticounterfeiting strategies that are based upon a solid understanding of the mechanisms of counterfeit trade, that are strongly supported by senior management, and that include well-defined monitoring and response processes that foster strong collaborations