With sales ranging from €150 billion to €200 billion (US$163 billion to $217 billion) per year, according to industry estimates, counterfeit pharmaceuticals are the most lucrative sector of the global trade in illegally copied goods. Fraudulent drugs harm or kill millions around the world and inflict serious damage on the brand names and bottom lines of major pharmaceutical manufacturers. Although less developed markets have long been their stronghold, pharma counterfeiters are now using digital channels to penetrate developed countries, where traditional physical drug distribution networks are well protected. Companies have plowed billions of euros into defensive measures, but their efforts haven’t slowed counterfeiters. Common anti-counterfeiting tactics block about half of the fake drugs, at most. New regulatory initiatives, meanwhile, leave large gaps for criminals to exploit.
Yet a new survey by Strategy&, PwC’s strategy consulting business, finds that pharmaceutical executives generally aren’t inclined to spend more to fight fakes, despite their awareness that current measures don’t go far enough. Not only do these executives misjudge their own vulnerability, but they also overlook the opportunities awaiting those that capitalize on rapidly evolving anti-counterfeiting technologies that do more than improve on existing supply chain safeguards. Companies that adopt these technologies will reap a range of new benefits, and gain an edge over rivals relying on yesterday’s solutions.
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