White papers from V.L. Engineering, Inc.

Protection of Pharmaceutical Products

In a recent study, the World Health Organization determined global sales of counterfeit drugs to be $32 billion in 2003 — 10% of all medicines sold worldwide. The trend is spurred by lucrative opportunities, virtually anonymous distribution channels, and price-driven consumer demand. It not only costs the pharmaceutical industry about $46 billion a year but also endangers the lives of millions of people.

Although counterfeit drugs are most prevalent in developing countries, recent reports indicate an influx of counterfeit drugs in the U.S. Experts at the Partnership for Safe Medicines say Americans are increasingly likely to encounter fake medication due to a combination of more sophisticated criminal activity and border security overwhelmed by throngs of illegal drug traffic.

The Pharmaceutical Security Institute reported that the value of seized, counterfeit and diverted drugs in the U.S. alone was almost $200 million in 2003, a sevenfold increase from the previous year. In 2004, Food and Drug Administration counterfeit drug investigations rose more than 150% over the previous year.

The FDA and the National Association of Boards of Pharmacy see the rise in counterfeit drugs as a serious health concern that undermines the legal drug distribution system and erodes consumer confidence in the industry.

The FDA Task Force issued a report outlining a framework for public and private sector actions that could further protect Americans from counterfeit drugs. This framework called for a multi-layer approach to address the problem and included the following measures:

  • Secure the product and packaging;
  • Secure the movement of drugs through the supply chain;
  • Secure business transactions;
  • Ensure appropriate regulatory oversight and enforcement;
  • Increase penalties;
  • Heighten vigilance and awareness; and
  • International cooperation.

RFID technology was strongly promoted as a means for tracking and tracing the products. However, the 2006 Report also considered several technical issues related to adoption of electronic track and trace technology that were perceived as obstacles to implementation and are in need of resolution. These include:

  • Mass serialization and unique identification of each drug package;
  • Universal pedigree with national uniform information; and
  • Privacy issues and the need for consumer education about RFID and the labeling of RFID-tagged drug products in order to help prevent unauthorized disclosure of personal information.

In simple terms, the following drawbacks of RFID have surfaced:

  • High cost;
  • Insufficient security / vulnerability to compromise.

V.L. Engineering, Inc., proposes a secure and inexpensive technology that enables to authenticate pharmaceutical products, create tracking and tracing systems and implement customer loyalty programs.

This technology involves printing of either or both visible and invisible 2-D barcodes with the encrypted data content. The invisible barcodes can be inexpensively printed and read with the available scanners. The visible barcodes can be imaged by a doctor or pharmacist with the use of a common digital camera capable cell-phone. The cell-phone sends the image of the bar code to the centralized host computer and promptly receives report corresponding to the information encoded in the encrypted barcode. V.L. Engineering, Inc., has developed a special 2-D barcode symbology that guarantees the integrity of the heavily and uniquely encrypted data. The invisible barcode can be applied to the package, to the printed insert and to the vial or bottle. The covertness and unique photonic signature in the IR spectrum provide strong authentication capability.

Thus, this technology offers the following advantages:

  • Low cost;
  • Tamper proof;
  • Unalterable insignia allows to set up a track and trace system;
  • Security without compromising customer’s privacy;
  • Meeting the E-pedigree requirements.

V.L. Engineering, Inc., is ready to provide a demonstration.

Vadim Laser, Ph.D., President of V.L. Engineering, Inc.

Date: March 19, 2007