In mid-February, Europol unveiled the results of a sweeping effort to rein in an illicit pharmaceuticals trade increasingly undermining citizens’ trust.
Conducted between April and October 2023, Operation SHIELD IV convened a sprawling coalition of authorities from thirty countries and three continents that managed to seize €64 million worth of counterfeit medicines, charge over 1,200 and shut down four underground labs as well as 92 websites.
Highlighting how “the trafficking of pharmaceuticals is a growing issue in the European Union and abroad,” Europol has further warned of its significant threat to individual health and financial impact on national healthcare systems. Given its concerning discovery of large-scale, international criminal networks and online platforms’ facilitating role in illegal medicine sales, the operation should inspire an expansion of its strong collaborative model, bolstered by innovative technologies from leading private sector actors like SICPA and Cypheme, and government regulatory solutions to tackle this public health plague and restore trust.
Counterfeit traffickers wreaking havoc in Europe
According to Europol, counterfeit medicine trafficking has become highly lucrative, incentivising organised criminal groups to enter the trade. This trend accelerated considerably during the COVID-19 pandemic, which “provided…illicit trade networks with new opportunities,” as highlighted by a 2022 EUIPO-OECD report. Counterfeiters have generated massive profits from fake and low-quality paracetamol, painkillers and personal protective equipment (PPEs), reflecting how low detection risk and weak enforcement have fuelled an illicit market now valued at up to $200 billion globally.
A 2019 PwC report had already flagged how “many…pirated drugs arrive from illegal online pharmacies based in remote corners of the world,” with digital channels enabling “criminals to elude security barriers designed for traditional drug distribution networks” – a problem exacerbated by the COVID-induced e-commerce boom. Incredibly, the World Health Organization (WHO) estimates half of drugs sold online to be fraudulent, while roughly 95% of online pharmacies violate patient health standards.
Counterfeit drug-associated incidents have soared globally in recent years, with the WHO estimating that falsified medicines kill roughly one million people every year. Europe has not been spared, with the illicit trade exposing its citizens to “serious and irreversible bodily harm,” as Europol has cautioned. Last year, the European Medicines Agency (EMA) highlighted that counterfeits of diabetes medicine Ozempic and weight loss drug Wegovy had been identified across the EU amid supply shortages and soaring demand.
This scourge has led to patients being hospitalised with severe side effects in Austria and the UK, with France, Germany, Italy and Ireland equally grappling with the expanding online illicit market.
Innovative companies providing key solutions
Unsurprisingly, counterfeit medicines featured high on the agenda of Pharmapack Europe 2024 in late January, where industry leaders gathered to explore advanced technologies’ vital role in tackling this digitally-facilitated illicit trade.
Among Pharmapack’s participants was leading Swiss security technologies provider SICPA, which showcased how its innovative solutions are helping to fight back against Europe’s influx of counterfeit medication. Integrating both visible and hidden components within customisable, forgery-proof security labels for pharmaceutical packaging, SICPA’s QUAZAR technology offers consumers, retailers and health professionals instant and reliable product authentication, protecting patients’ health while limiting pharmaceutical companies’ revenue and brand credibility losses.
Beyond drugs, SICPA’s PLASTIWARD sophisticated anti-counterfeiting system – a collaborative solution with specialty chemicals firm Clariant – provides medical device manufacturers with traceable security tags implanted during the production process and later scanned to verify authenticity, underscoring how pharmaceutical counterfeiting equally compromises life-saving medical devices like inhalers and insulin pens. This kind of high-tech, multi-layered anti-counterfeiting technologies will remain key as growing e-commerce continues to spark supply chain complexities created by online shopping.
Reflecting on Pharmapack 2024, Systech’s Remi Turbet Delof highlighted how pharmaceutical companies must incorporate artificial intelligence (AI) within this layered defence model. French startup Cypheme has emerged as one of the most providing actors in this space, with its AI-powered counterfeit detector solution recently launched in OpenAI’s GPT Store. Facilitated by cutting-edge neutral network software, Cypheme’s solution allows consumers to scan and identify counterfeit products using only their smartphone camera.
Dubbed ‘Deep Tracing,’ Cypheme’s AI technology analyses photos of product packaging to distinguish between genuine and falsified medicines, with its training on authentic images enabling the detection of counterfeits’ inevitable anomalies. Building on its previous, EU-funded project to develop Noise Print technology, which employs AI analysis of security certificates’ microstructure to identify falsified medicines and medical equipment, Cypheme seems primed to stay at the forefront of this crucial effort.
Closing regulatory loopholes
As PwC has rightly noted, “the rising tide of counterfeit drugs reveals numerous gaps in governmental…efforts to safeguard global pharmaceutical supplies,” with even Europe’s relatively strict security regulations far from foolproof.
Launched in 2013, the EU’s Falsified Medicines Directive (FMD) introduced tougher measures to tackle drug counterfeiting, notably requiring the creation of a system to shield legal supply chain from fake medicines and recommending unique identifiers as well as anti-tampering devices for packaging. The FMD’s final implantation stage was completed in 2019, with industry stakeholders initiating the European Medicines Verification System (EMVS) under the directive’s framework. Encouragingly, the EMVS has incorporated emerging technologies to identify falsified medical products, while the European Commission has highlighted the adoption of the unique identifier and EU logo to certify legal online pharmacies, as well as the inclusion of counterfeit medicines in the Digital Services Act, as important regulatory achievements.
Nevertheless, significant implementation issues remain, undermining this nascent progress. According to Pharmaceutical Executive, the EMVS’s regulatory potential remains hindered by national-level challenges, with member-states including Italy and Greece not yet compliant, creating the risk of a fragmented system. Moreover, experts have criticised Brussels’s excessive focus on legal channels, leaving the bloc exposed to the ever-expanding digital illicit market and sparking calls for stronger online consumer safeguards, such as common pharmacy domain names for each EU member state.
Combining digitally-orientated regulatory innovations with the private sector’s cutting-edge technological solutions will offer European and national authorities the best chance to meaningfully curb the illicit medicines trade. The success of Operation SHIELD IV has provided a much-needed spotlight on this public health menace and showcased an ambitious collaborative model that should be replicated to restore public trust in Europe’s health systems.
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EU’s counterfeit medicine plague calls for cross-sector innovation to restore public trust
