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Pharma Business Financial Metrics For Brand Protection by Ron Guido they question how to devise such metrics. I feel strongly that a credible scorecard can be produced, even for the ostensibly intangible results associated with combatting illicit trade. By measuring the financial effects of brand-protection programs and their secondary impacts on operational efficiencies and effectiveness, your company will generate the management information needed to: • monitor the integrity of your supply chain over time in financial terms • quantify breaches in the supply chain that may endanger patients/ customers • measure the potential impact of future supply chain breaches (lost revenue or increased costs) • objectively inform management of benefits derived from investments in supply chain security (ROI). Along with ongoing monitoring programs, combined with analysis of your own commercial data, a brand-protection financial scorecard is a valuable tool in your continuing efforts to fulfill your company's promise to your patients to deliver safe medicines. In doing so, you enhance the reputation and the profitability of your businesses around the globe. A sustainable process can be created to capture the financial benefits of brand- 46 LifeScienceLeader.com M any companies struggle with the need to justify investments in anticounterfeiting programs. Others deem it an important part of their business rationale to help safeguard key brands; yet protection programs and counterfeiting countermeasures across all functional areas, regions, and product lines of your company. Such information can be captured and reported by brand, channel of trade, or type of violation. With the accent on both "recovery" from past/current insults and "prevention" or "loss avoidance," this process divides reported results into two categories: recovery and avoidance. RECOVERY The concept of revenue recovery, as the phrase implies, is to recognize that you, the IP rights holder and brand owner, have created a finite amount of market demand for your product. That brand would therefore generate an expected level of sales against the pent-up demand. Yet some of that revenue has been "hijacked" by counterfeiters purporting their fakes to be genuine. Therefore, if you determine that your brand-protection programs have had a direct effect on retarding the sales of counterfeited products in a targeted market or channel, then you have earned the value of that recovery. In other words, if you did nothing to thwart counterfeit trade of your brands, your sales would be booked by those operating outside the legitimate supply chain, tantamount to losing market share to a clandestine competitor. On the other hand, recovering sales lost to illicit traders provides the basis for November 2013 assigning financial value to the ways and means of anticounterfeiting processes and technologies. Recovery also can take the form of nonrevenue-related reclamation of value. If, for instance, your company pursued civil damages against convicted counterfeiters, your monetary award can be included in the recovery bucket. (Note: Some organizations opt to record recovery dollars net of the costs, e.g. legal fees.) Some examples of activities that generate brand-protection recovery results are shown in sidebar 1. AVOIDANCE Unlike recovery, which recognizes insults to brand integrity after the fact, brand protection measures of avoidance are derived from estimates of the likelihood of a brand violation if no preventive actions are taken. Given the dearth of available information about counterfeit and gray market transactions, avoidance measures must be associated with rates of illicit trade titrated from known aggregate data or from market surveys (sampling) conducted to size the problem. For example, if your branded drug is in the lifestyle category (e.g. erectile dysfunction), your financial scorecard may assume that your drug will experience a similar rate of counterfeiting to the published data of Viagra, tempered by market share, price differences, and adoption rates. Alternately, you may elect to precede your anticounterfeiting