Counter Counterfeiting

One responsibility of government is to protect its citizens (and businesses) by policing the marketplace for fraudulent and harmful products.  In the developing world, studies have shown that possibly one-third of the pharmaceuticals provided through the public health system or bought by patients are either fake or adulterated (SciDevNet editorial,, that protection can be a matter of life and death.  To the extent possible, governments register and approve products, inspect factories, and verify quality along the distribution chain. But for many countries where the annual per capita spending on health care overall is less than $10, the ability and motivation for governments to police the market place is low.  At the highest level, the multinational pharmaceutical companies, international organizations like the WHO, and governments are working together to share information and increase regulatory programs (e.g., WHO Taskforce, WHO Taskforce and Pfizer Counterfeiting).  To verify product quality in distribution, a UK-based non-profit called the Global Pharma Health Fund (GPHF) is assisting regulatory authorities by designing and freely distributing “mini-labs” for testing drugs.  The GPHF is funded by the pharma company, Merck KGaA of Germany, and has placed more than 500 labs in 80 countries.  And new technologies are being developed. Locally, BU professor Muhammad Zaman, has a prototype fluorescence-based detector to test the potency of anti-malarial drugs and has recently received a grant to increase its capabilities (BU Today article).

At the consumer level, two companies are using the near-ubiquity of cell phones to enable purchasers to verify of the authenticity of drugs.  And a glance at both provide some insight on the difficulty in starting up a company to address a developing world health problem.  Sproxil (Sproxil) is a Cambridge-based startup that began in 2007, has 25 employees, and is funded by about $2 million in grants and investment money (MassHighTech article).  Their solution is for companies to apply unique codes to each product package that are then verified by purchasers who check the code via a no-cost text message.  The appeal to Sproxil’s customers are that they offer assurance of quality to consumer and can gather data on the occurrence of fraud, and the company has had two pilots with two pharma companies, but deployment has been slow, according to Ashifi Gogo, Sproxil CEO, due to the need to cut deals with multiple local cell phone carriers (Sproxil press release).  To date, Sproxil is operating in Ghana, Kenya, Nigeria and India, and more than 1 million verifications were performed by the start of 2012 (Another Sproxil press release).  Deployment may be more rapid in the next years.  The company recently partnered with Bharti Airtel, an Indian telecom with operations in 20 companies in Asia and Africa with a potential use by its 450 million subscribers in Africa alone (FierceBiotech article).  The company is also broadening its customer base by pitching its services to all “brand owners in emerging markets” (Sproxil Solutions) and has done deals with hair and skin-care product companies (Financial Times blog).

mPedigree (mPedigree) is a Ghanaian company that is also using text-message verification but using the manufacturers’ already-assigned product package codes (Wikipedia article).  mPedigree has been working with the regulatory agencies and companies in Ghana, Nigeria, and Kenya and recently signed its first Indian client, Themis Medicare ( article).  To date, the company has apparently been prize- and grant-funded with a major part of its support being provided through the electronics giant, HP, who donated hosting infrastructure, as well as the security and integrity systems, through a data center in Germany for the mPedigree network in 2010 (HP press release).  Key to its future is the company’s successful marketing to multiple clients.

I see two problems with Sproxil’s and mPedigree’s business models.  First, they rely on individual companies as clients meaning that they must market to the biggest pharmas and not the many smaller generics companies.  Second, verification requires purchase and therefore education of consumers on the value of the specially-marked packaging, not an easy task.  Alternatively, the companies could be working with national regulatory agencies to verify and certify the overall distribution system from factory to warehouse to pharmacy or hospital dispensary with the agencies affixing or recording the package tags.  In an early posting (“SEAMs Right”), I wrote about a pilot program that Management Sciences for Health, a contract consulting firm over in Cambridge, conducted with the Tanzania Food and Drugs Authority, called the “accredited drug dispensing outlet” program, through which proprietors of retail drug shops were trained and certified, leading to substantial improvement in the quality, availability, and affordability of medicines, and improved financial stability of the shops.  I’m not sure if this approach has been adopted outside of Tanzania but it looks like a good test bed for a program of drug authentication using either companies’ technology.