Producing and selling falsified medicines—fake drugs deliberately labeled as real and sold to consumers—has been described by the Institute of Medicine as “the perfect crime.” The industry tops $200 billion annually and in Africa alone is responsible for 100,000 deaths each year. The WHO identifies corruption as one of the biggest challenges to keeping these drugs off the market, but the number of access points all along the supply chain—at the point of manufacturer, in customs offices, at distribution centers or individual pharmacies—make reining in corruption a gargantuan task. Governments may squeeze one area—say stricter regulation of customs offices—only to find distribution centers being turned into drug swap shops.
We may, however, be witnessing a shift in how governments approach these issues, moving from confronting corruption head on—which has met with mixed results—to simply circumventing it. The Nigerian experience is noteworthy. Nigeria’s National Agency for Food and Drug Administration (NAFDAC) has teamed up with Sproxil, a product verification company, to allow consumers to individually verify the authenticity of their drugs. NAFDAC is effectively crowdsourcing its falsified medicines anti-corruption efforts, and with some very positive results.
It’s a simple idea. Sproxil affixes a scratch-off panel to individual drug packets. After purchasing the drug, consumers scratch off the panel to reveal a unique, single-use code and text the code, free of charge, to the country office. Within seconds they receive a reply letting them know if the product is real or fake, and providing additional information if necessary. While not the only company offering crowdsourcing verification technologies (mPedigree and PharmaSecure are other examples), Sproxil’s exponential growth is indicative of the buy-in this approach is garnering. It took Sproxil two years to hit one million text-in verifications, one year later they were at five million, less than a year after that ten million (real time number of verifications can be found here). Nor is the idea’s buy-in limited to patent-holding Western pharmaceuticals or countries frequently on the receiving end of falsified medicines. Companies in China and India—each major sources of fake drugs but also home to legitimate generic manufacturers providing affordable drugs to much of the developing world—are starting to partner with companies which use product verification technologies similar to Sproxil’s.
Individual verification systems are proving so effective for two reasons:
- They empower the right people—authentic manufacturers and consumers—and cut out the rest. Every fake pill purchased is lost revenue for authentic manufacturers; every fake pill consumed puts the consumer’s health at risk. Both groups have a strong incentive to participate in the system. Furthermore, the costs of participation are distributed to incentivize broad participation (i.e. consumers text-in for free).
- Implementing the system does not require direct suppression of corrupt activities–which can be difficult, resource-intensive, and politically sensitive. Product verification simply circumvents the customs officials who take bribes, the wholesalers who divert drug supplies, and the pharmacists who switch pills.
It is important to recognize, however, that while consumer verification systems are proving an important tool in the fight against falsified medicines, they are still basically a rear-guard action; they only come into play after falsified drugs have already invaded the market. Governments can and should use the success of these crowdsourcing technologies to build their capacity to fight corruption head on. I have three recommendations:
- First, NAFDAC and Sproxil (or similar partnerships) are gathering a lot of information that could be used to figure out which drugs are easiest to fake, and which are in the highest demand. This information could be used by law enforcement authorities and authentic manufacturers to allocate resources to the highest-priority risks.
- Second, and building on the first point, if verification systems become widespread enough, and there is enough public buy-in, in addition to texting in the scratch-off code, consumers could be encouraged to text in their region, town and the pharmacy from which they purchased the medicines (along with any other pertinent information). This data could be used to generate a real time “heat map” of fake drugs, which could be used both for law enforcement purposes, and to design better regulatory regimes to cut out the supply of fake drugs.
- Third, and this is more controversial, aggregated information collected through crowdsourcing technologies should be made available to the communities which text-in. Releasing this information is tricky because, so the argument goes, knowledge of the prevalence of falsified medicines within a community may lessen confidence in all available medicines, which may in turn erode public health overall. In a nutshell, the concern is that if people think the medicines they purchase may not be effective, when they get sick they may decide not to bother seeking treatment at all. Despite this risk, I would argue, making this information available at the community-level is important because it incentivizes change. If consumers are aware that a particular retailer and/or town has a higher incidence of falsified drugs, they’ll shop somewhere else. It’s possible that the final retailer had no knowledge of the falsified drugs (and so would be punished for a harm for which they bore no responsibility), but retailers are better positioned vis-à-vis consumers to maintain supply chain integrity. Releasing this information to the public incentivizes those with the ability to restrict access points and/or ensure that medicines entering at all points are authentic to do just that.
GAB | The Global Anticorruption Blog 
Really useful review and analysis. I had seen references to, and news accounts of, the effort but nothing approaching this in thoroughness. Thanks much.
By the way, same technique will be useful in monitoring the quality of nutritional supplements, a critical part of the effort to improve maternal and child health.
NAFDAC hasn’t teamed up with Sproxil. NAFDAC has endorsed a number of companies, that includes sproxil (as well as m-pedigree and pharmasecure) to run this program in Nigeria. And of those sproxil probably has the smallest pedigree. check your facts! Or better still even call nafdac before pontificating on a subject you really dont know about.
Thanks for your comment. I confess, though, that I don’t think I quite understand what facts the post got wrong, or the reason for the condescending, hostile tone. Numerous sources report that the Nigerian agency endorsed the Sproxil platform in 2010. The post specifically mentions that other firms, including the two you mention, provide similar verification services in Nigeria. So I’m puzzled as to what you think the post got wrong. Is it anything other than the implication that Sproxil’s share of this market is larger than it is? That seems pretty minor. Is it something more substantive? If you could clarify, that would be helpful.
it seems someone has also done their research and reached out to these firms:
“Sproxil is by far the biggest company in the mobile verification business, with more than 9 million verifications so far.”
via http://opinionator.blogs.nytimes.com/2014/06/04/the-fight-against-fake-drugs/?_r=0
NAFDAC hasn’t “teamed up with Sproxil”. NAFDAC has endorsed a number of companies, that includes sproxil (as well as m-pedigree and pharmasecure) to run this program in Nigeria. And of those sproxil probably has the smallest pedigree. check your facts! Or better still even call nafdac before pontificating on a subject you really dont know a whole lot about.
You seem to have submitted this comment twice, perhaps because of the delay before the first was posted. To keep the threads manageable, why don’t we ignore this one, and you can post any further replies in the thread above.
This article claims that nafdac has ‘teamed up’ with sproxil to offer this service. This is simply UNTRUE. It also appears to suggest that Sproxil is the biggest provider of the service in Nigeria and elsewhere. That is also UNTRUE. It is written like an advertisement for sproxil and appears uninterested in the actual facts. It does not quote anyone close to the project in Nigeria. Not the pharma industry or nafdac. What kind of article is that? It is shoddy writing. You cannot write on authority on a subject like this when you know nothing about the issues. Not a single independent source? Whoa! Is that the quality this blog is aiming for? Everything written here is just speculation. Next time talk to the official agency involved or the industry actually using the service. Sitting in the armchair and speculating from 5000 miles because the context is Africa, so you think no one will call you out for wrong facts, is weak scholarship. At least start with some googling. http://www.vanguardngr.com/2013/02/anti-counterfeiting-technology-nafdac-enlists-pharmasecure-ubqt/
And by the way it is really sad that the only thing that looks like an actual reference – “It took Sproxil two years to hit one million text-in verifications, one year later they were at five million, less than a year after that ten million (real time number of verifications can be found here)” – simply accepts claims of a company with no independent checks. How does the writer know how many verifications have actually been done? Because the company says so? And this is acceptable for this blog? Really?
I get the sense that the author of this piece is less interested in the details of Sproxil’s market position than she is in analyzing the efficacy of it (and any other analogous organization or technology) from an anti-corruption perspective.
I think what is most fascinating to me about the idea of using scratch-off codes to check the veracity of drugs is the way it renders whole layers of corruption impossible. As the author puts it: “product verification simply circumvents the customs officials who take bribes, the wholesalers who divert drug supplies, and the pharmacists who switch pills.” This may shift patterns of corruption to other areas of drug manufacturing and distribution, like squeezing a balloon, but I think it is nevertheless a worthwhile endeavor to eliminate corruption at least _somewhere_ — to establish and secure trust in _something_. This is the promise of technological anti-corruption efforts, and this promise is echoed in waves of anecdotal successes like those of Sproxil et al. To cite another example, the Bill and Melinda Gates Foundation funded an effort in Afghanistan to use mobile payments to carry out government payroll functions called m-Paisa, modeled after the famous m-Pesa system in Kenya. Afghani police started receiving their salaries in digital cash on their phones through m-Paisa, sent directly from central payroll to the individual police officers. The first time they received their salary in this way they thought they had gotten a 33% raise — but in fact their bosses had simply been cut out of an opportunity to skim their salaries.
These happy stories are a result of the rapid decline in the cost of technological means of transparency and verification. From what I understand of the the Open Government movement, the kind of trust that scratch-off verification gives us in drugs and mobile payments gives us in payroll can be scaled up to whole government functions. My biggest fear is that the process of “squeezing the balloon” is never-ending, and that even in the wildest dreams of Open Government advocates there will be cracks in which corruption can thrive. Stated differently: when we delight in the success of technology to combat corruption, are we being blind to the inevitable shift of corruption to other avenues? Is this a zero-sum game for anti-corruption activists? My intuition is no… but doubts persist.
I’m getting beyond the purview of this very informative post but I am also drawn to the fact that this technology has the capacity to pull off an end run around corrupt officials. Making direct connections between money/products and final beneficiaries is a fascinating and effective way to reduce corrupt payments. But I would emphasize an additional externality that tempers your highly optimistic view of technology, Chris.
Technologies like m-Pesa (and, perhaps one day, scratch-off medicines) drastically shorten supply chains, removing the discretionary points where bribe solicitation occurs. I agree that this sounds incredible. But facilitation payments supplement (or entirely replace) woefully insufficient/non-existent salaries for many government employees. As unfortunate as it is, corruption is an economy. What will happen when the graft payments disappear?
Now, maybe that’s the point. Anti-corruption activists have to put pressure somewhere and corruption in all forms should be eradicated. Although petty corruption is often tolerated in the anti-graft world, it essentially brings about death by a thousand cuts.
Is it better to shock the system, push for gradual change, focus first on grand corruption, etc.? There are no easy answers but I think researchers, entrepreneurs, and developers should contemplate what their products’ success means in the short-term.
Without using a number of independent sources to corroborate the FACTS used in the article hoe can anything said here be taken serious. The only data used here seems to have come from the PR department of one company involved in this ecosystem. That is a very major weak point of this whole article. To know how mobile authentication is changing the game you need to use multiple sources not just take the PR claims of one startup company and run with it.
Are the other players doing something markedly different from what the author describes? Please fill us in!
It is not about what any startup technology company is doing. It is about factual integrity of the whole analysis. We can’t take any of the claims here seriously because even the basic facts are wrong! Maybe that doesn’t matter for bloggers but for real journalists the facts matter than the opinions!
This is a pretty fascinating example of technology being used to create a decentralized mechanism to bring about accountability. That said I have a few questions about how the technology works and how the ecosystem of fake drugs functions. First we are assuming that a drug has been brought into the country disguised as something that has a brand name. It ignores the fact that developing countries are flooded with off brand generics made in India, China, and Southeast Asia because poor people can’t afford the patent protected products. Though I’ve never imported drugs I have imported other products into East Africa and as far as I can tell you can get anything through customs and “standards bureaus” if your willing to pay. So if the standards bureaus certify the drugs and provide the approved information to the contractors that are checking for authenticity how would the consumers get protected? Perhaps a few big brands would be able to protect their consumers from counterfeits and this is a worth wile effort, but my fear is it also implies that we can bypass the harder work of creating a qualified regulation system to check the quality of all drugs coming in. Also once you get down to the consumer all sorts of variables are in play. As pointed out by this excellent article in the NYT, “The Fight Against Fake Drugs” http://opinionator.blogs.nytimes.com/2014/06/04/the-fight-against-fake-drugs/?_r=0 which mentions Sproxil amongst others, but also says there can be many other complications: “Malaria treatments are a good example. A study in Western Kenya found that only 38 percent of people who sought treatment for malaria actually had the disease. What people believed to be malaria, then, might have been another fever that resolved on its own — “cured” by a counterfeit drug with no active ingredient. Conversely, a medicine’s failure is not proof that it is counterfeit or substandard, as real drugs don’t always work. Legal medicines can also be substandard, and they can spoil. And there is always the question of whether patients take them correctly.Nations with a serious counterfeiting problem can resolve it by acquiring effective regulation, strong institutions, working courts and well-designed liability laws. Rwanda, Africa’s positive outlier in so many aspects of health care, seems to be on its way.”
Perhaps a more effective solution, one that is advocated by our organization, Not In My Country, is that individuals in positions of responsibility need to be held accountable for their actions. One way of doing that, would be to upload a database of everyone that works NAFDAC to a website, and then allow, in a yelp like fashion, for the importers that deal with them to rate their performance and report them for acts of corruption. So when they demand payoffs to allow a shipment of counterfeit goods to pass through, or a shipment of life saving medication has been held up because an officials hasn’t showed up for work. Or when its clear that tests aren’t being conducted because funds for technicians and or equipment has been embezzled, then there will be a way for the information to be submitted, and sent to civil society, the media, and perhaps also donor agencies and nations.
Ultimately the only true solutions to corruption are those that focus on individual accountability, discovering that a bottle of pills is counterfeit is useful so you don’t take the pills, but to make sure it doesn’t happen again someone has to stand for their crimes.
Thanks for your very insightful comments, and apologies for the delay in response time! You highlight two broad issues: 1) that the companies responsible for administering the anti-counterfeit technologies are themselves susceptible to corruption, which for obvious reasons could easily erode the programs utility; and 2) the medicines that the most vulnerable can afford to buy are less likely to be protected with these technologies, making them effective only along the (richer) periphery.
For the first issue, the brilliance of the scratch-off/text-in technologies is that they do not try to stop any corrupt activity; they focus rather on getting important information to the consumer, allowing them to, they then can seek out effective medicine. Any tampering or approvals given to falsified drugs at the border (or wherever) only work if they are verified by the official anti-counterfeit technology. That is the make-or-break question, and is where market forces come into play. The companies providing and administering the technology sell one thing: the promise that infiltration will not happen. If it does happen, they have nothing left to sell. The stakes for a single breach are incredibly high, and while I’m not naïve enough to say it could never happen, everyday bribes at the border (even substantial everyday bribes) probably won’t accomplish it. You’re right that this could be these companies’ Trojan horse, but I have not found any evidence of breaches and the companies, at least for now, do enjoy the confidence of various governments, IBM, the Acumen Fund, and others.
To your second point, as you note, the technologies do favor more expensive medicines as it is either patent holders or governments who work with anti-counterfeit companies, whereas a fair amount of medicines found on the market in poorer countries are neither branded nor government-procured. The question that follows is: if someone cannot afford to buy a drug with scratch-off technology, but can afford a cheaper, unverifiable version, how do these technologies help?
I think your observation is an astute one, but also worth parsing a bit more. Anti-counterfeit technologies do not directly aid the large swaths of populations which cannot afford to purchase protected medicines, but the technologies do do the following: 1) incentivize those who could afford to purchase the more expensive medicine, to do so, even though it would be a further drain on their finances. In some situations this would be heartless marketing, but in situations where up to 50% of the drugs on the market at fake, it’s also a legitimate health goal; 2) encourages those at the bottom of the supply chain (i.e. local community pharmacies) to try to ensure their supplies are not tainted; and 3) in situations where there is only one drug on the market (as can happen with some HIV anti-retrovirals), the technologies provide protection for all consumers purchasing the drug.
That being said, the usefulness of these technologies will always be limited to some extent; your overall observation is spot on. These technologies do not—and cannot—make up for the need for ‘effective regulation, strong institutions, working courts and well-designed liability laws.’ I would add to that a sufficient and well-trained medical staff. Scratch-off/text-in systems provide a stop-gap. They give consumers and producers of real medicines, whether branded or generic, a bit of added protection during the period when governments are (theoretically) working to develop effective regulatory regimes.
I very much agree that accountability is key to rooting out corruption, and think your idea of using a public database in which individuals can report on the misdeeds of government employees could be a good starting point. I do think, however, safeguards of some sort would be necessary to prevent members of the public from shaming agencies for the wrong reasons (for example, campaigns carried out by manufacturers of falsified drugs to remove employees who refused to approve the importation of the drugs). Also, counter-intuitive as it may seem, making all allegations public may not serve the public in the long term. As I noted in my post, I am in favor of releasing information on the location and type of drugs that have been verified as fake, but I would be less enthusiastic about making public allegations of suspiciously imported drugs or allegations of corruption in the public health sphere; the tricky thing about maintaining public health is the importance of keeping public confidence. I’m not an expert and do not know where the line should be drawn, but there’s a balancing of interests that should be done.
The Rwandan example is unique and impressive in many ways, but I think that one of the key aspects of its success is that the government prioritized reform and a zero-tolerance policy at all levels, including the very top. Figuring out a way to tie any public database of individual, lower-level misdeeds to the agency’s top brass would, I would posit, be crucial to true reform.
BTW, so I can be accountable for my own comments. The author of the above text is one Roey Rosenblith, Executive Director of Not In My Country.