Digital Health in Action - Fighting Counterfeit Drugs with mHealth Technology

Digital Health is a broad term which encompasses overlapping technology sectors across healthcare—as evidenced by our Venn diagram representing the Digital Health Landscape. In this “Digital Health in Action” series, we’ll focus on specific examples from each domain to show what an impact the digital health movement is making on healthcare across the world. Here, we take a look at how mhealth technology is being used to fight against counterfeit drugs in the marketplace.

Counterfeit medications are any drugs which are not what they purport to be, and mhealth technology is being used on the Digital Health Landscape to decrease their flow. They could be medications without active ingredients or with incorrect quantities of active ingredients. They may contain wrong ingredients or, in some cases, high levels of impurities and contaminants. They may be copies of other original products or may come with fake packaging.

The High Cost of Fake Drugs

The full scope of the problem of counterfeit medicines is difficult to investigate due to underreporting in many countries and because of inherent difficulties in detecting, investigating and quantifying counterfeiting. But what is certain is that the delivery of genuine and quality health services is severely undermined by fake medicines.

A 2003 factsheet by WHO quotes the estimates of the US Food and Drug Administration that,

“counterfeits make up more than 10% of the global medicines market and are present in both industrialized and developing countries. It is estimated that up to 25% of the medicines consumed in poor countries are counterfeit or substandard.”

The World Customs Organization calculates that the global fake drugs market could be as large as $200 billion each year.

Counterfeiting is Killing People

In 2009, the International Policy Network reported that fake anti-malarial and anti-tuberculosis drugs alone cause nearly 700,000 deaths each year in developing countries. The report also states that 46 per cent of drugs sold in Angola, Congo and Burundi are substandard, 68 per cent of anti-malarial drugs sold in Laos, Myanmar, Cambodia and Vietnam do not contain sufficient quantities of active ingredients, and most of these fake drugs originate from China and India.

The dangers from fake drugs are threefold:

• They fail to treat a condition because of no or insufficient active ingredients.
• They cause direct harm due to the presence of impurities and contaminants.
• They promote drug resistance in harmful microorganisms due to their overall inefficiency.

Some of the important factors hindering the fight against fake drugs include:

• Lack of political will
• Absence of appropriate drug legislation
• Poor regulation and law enforcement
• Corruption
• High prices of medicines
• High profit margins in counterfeiting
• Insufficient coordination among stakeholders in the healthcare community
• Inadequate global coordination

mHealth Technology Can Help Combat Counterfeiting

The ubiquitous presence of mobile phones, even in low and middle income countries, provides an opportunity to enable consumers to check the authenticity of medicines using SMS text messaging services.

The advantage of this method is that it bypasses bureaucratic lethargy in regulatory authorities and poor law enforcement situations prevalent in many countries. The manufacturers and distributors of genuine medicines also have a strong incentive to adopt this technology—to prevent potential loss of business due to fake drugs and to preserve their brand reputations.

This SMS-based product verification method relies on printing a unique one-time identification code—usually a series of numbers—on product packs and then concealing them. When a purchaser scratches off the concealing panel at point-of-purchase and texts the revealed code to a central registry, a message is sent almost instantly specifying whether the product is authentic or suspicious.

Unlike the previous methods used by the pharmaceutical industry—such as trademarked brands, tamper-proof packaging, and holographic images—this end-to-end SMS system is believed to be more effective. Printing millions of unique codes using mass serialization systems, it’s complex enough to make any counterfeiting efforts by fake drug syndicates less profitable.

The first SMS-based anti-counterfeit program was launched by mPedigree in Ghana in 2007. Sproxil, a Cambridge, Massachusetts-based company, also launched a similar system in the United States in 2009 and has since expanded its operations in Ghana, Nigeria, Kenya and India.

Sproxil’s award-winning Mobile Product Authentication (MPA) is the most widely used SMS-based anti-counterfeit system. So far, the company has processed more than 11 million verifications. This is a very impressive achievement because the number of times consumers choose to verify codes is a better indicator of the technology’s social impact than the number of unique codes printed on medications.

SMS-Based Drug Verification is Scalable and Sustainable

The critical success factors behind Sproxil’s business model need to be understood so as to replicate and geographically expand similar usage of mobile technology to fight counterfeit medication.

Sproxil engages economic buyers—pharmaceutical manufacturers and distributors—who suffer most from counterfeiting efforts, and also benefit most from countering them. Supply chain visibility and recovered sales revenue from the reduction of fake medicines in the marketplace are strong incentives for these players to adopt this technology.

Sproxil also increases the net utility for these buyers by aggregating across many drug manufacturers, which makes the costs of implementing SMS-based verification cheaper because of economies of scale. By selling the same technology to other industries—such as automotive, agribusiness and FMCG—Sproxil further strengthened the financial sustainability of the business model.

Using mobile technology for product verification bypasses government and bureaucratic layers and lessens the need for complex partnerships in the healthcare ecosystem. Sproxil, however, carefully engages governments, too. All countries where it operates have endorsed the service because of an increased awareness of the problems posed by fake drugs.

Mobile network operators—another important stakeholder in the model—also have an incentive of being able to earn more revenues from SMS services without having to do anything outside their core competencies. Sproxil is also diversifying from anti-counterfeiting by moving towards providing market intelligence and analytics services based on the data obtained from the use of its service.

All of these factors have enabled SMS-based verification to overcome scalability and sustainability issues—two common obstacles in leveraging the full potential of many promising mHealth technologies.

Robust expansion of SMS-based verification technology would create a positive impact on health outcomes by decreasing fake drugs, improving communication between various stakeholders in the drug supply chain, and reducing stock-outs of essential medicines.