Keep tabs on the genuine article

The pharmaceutical sector is a target for counterfeiters, with the World Health Organization estimating the global trade in counterfeit drugs at £75 billion and growing 13% every year.

The EU directive on falsified medicines could help the situation when it becomes law on 2 January 2013, but how can the packaging industry step up to the challenge in this market and others?

How much of a potential problem could plain cigarette packaging pose – could this end up flooding the UK with fake products?

What technology is available to make sure that the product is genuine and does it require a high level of investment in machinery and software?

Q: How much demand is there from brands and manufacturers for systems to combat counterfeiting? Is this an issue they are taking seriously?

A: All industries are looking for solutions for track and trace. They need identification on products so it is possible to say whether they are a genuine product or not a genuine product. This is important for pharmaceuticals as well as cosmetics and perfume, and high value products.

Q: Will this follow in other sectors?

A: Yes, and for several reasons – pressure of a brand’s own distribution channel and pressure for distribution to markets requires a proper track and trace solution for products such as perfume or high value goods. Pharmaceutical and cosmetic markets have to be able to track a product and answer technical problems. And if there are any problems for the consumer they have to be able to react quickly, and on maybe a small selection of products – say removing 1 to 500 from the market.

Q: So track and trace doesn’t just tackle counterfeiters, but any problems that can be rectified quickly for consumer confidence?

A: Absolutely, then there is the internet where you can buy from anywhere in world – although many are aware of the risk of buying medicines from the internet. But there are other issues, for example countries from western Europe sell so many million pharmaceutical products to Africa at special prices. Some people buy these and try to sell them back into the West to make money. You can avoid this with track and trace.

Q: Is it likely that the EU directive will make a difference in the pharmaceutical market? Could the directive be extended to other markets and would that make much of a difference?

A: Yes. The cosmetic sector follows the pharmaceutical market all the time, and it moves down through the industries. One of our customers has suffered in countries like the Philippines and Pakistan with products looking very similar and confusing customers – so brand owners need to find a way to react quickly. The same approach can be used by many industries, such as automotive when addressing the issue of counterfeit spare parts.

Q: So do some sectors decide to react in different ways?

A: Some customers have track and trace the whole life of the product with a unique ID to be able to do all that. Consumers don’t know what they’re buying sometimes, or where it comes from, and this helps with that identification.

Q: With plain cigarette packaging law coming into effect in the UK, could this lead to an increase in the number of illegal products on the market?

A: We have a major project with the cigarette industry using unique codes and security labels. We are able to print codes on boxes that no-one can extract. This preserves the integrity.

Also, we have decades of experience in the market of security printing for tax and excise labels. Especially within the tobacco industry we have some solutions where official printers for governmental authorities and tobacco companies print tax labels for cigarette packaging. One of the most recent solutions was installed in a country in south-east Europe. On such tax labels we print coding numbers and barcodes and other variable data.

Q: Can that make a significant difference?

A: The best example is the perfume industry. A lot of money is spent on marketing products, with film star endorsement. To preserve that they have to have a select distribution channel. They have been fighting the grey market for many years, so know this works.

The same goes for high-end branded goods that keep hold of their price by selling through the right channels rather than a hypermarket or supermarket where the value goes down. Brand owners can then be sure they know who they are dealing with and that they won’t sell undercover to other people.

Q: So they should sell via more specialist stores rather than supermarket and hypermarkets?

A: Yes. It is very important to keep the price level high. You can only do that by having a premium brand value. And premium brands will be sold in specialist stores. For example, no one will pay a premium price, let’s say for a Rolex watch, if you know you will be able to get it in a hypermarket in the future.

Q: How difficult is it for any brand to protect its products? Are there basic systems they should have in place?

A: We sell full solutions to customers, from software generating unique codes or QR codes to print systems producing 2D Datamatrix barcodes. Then the cover information is added. This can either be done by the brand owners themselves or by printers adding the process into their production and packaging lines. Or at the end of the packaging process with connected track and trace units.

Q: Can counterfeiting be combated with simple print technology? Can smart phones and QR codes on packaging also assist?

A: The advantage of 2D Datamatrix and QR codes is they can be placed in a small area to help the fight against counterfeiters. Customers using our comprehensive software architecture can place cover information in a way that can be read on a smart phone. The core technology is simple high quality inkjet printing, which can adapt to variable data and layouts.

Q: Is it realistic to expect every part of the supply chain to have this kind of technology? Does this require a high level of investment?

A: It requires some investment but in some places this is being driven by regulations, for example in the pharmaceutical industry where 2D Datamatrix information is printed on packaging in France, Germany in 2013, the UK, Belgium and all over Europe.

The industry needs to have solutions to comply. There is no alternative to having a coding and serialisation solution in place by 2015 at the latest, to meet the legal EU requirements and the market needs of track and trace options.

With the right equipment, printing over with security features is not too expensive. Also QR codes can be used in marketing to give access to websites and promotions. You can also put security features in QR codes so companies don’t need to spend so much time and money. The coding can be put on in the factory or sub-contracted to cartonboard printers.

Q: Is print technology for helping to combat counterfeiting quite simple and straightforward?

A: Yes, we can go to a cosmetic company and just integrate a coding module. Using files and data we can do all the coding you want. From 1D to 2D Datamatrix and QR codes. And if the technology is not developed by us, but other suppliers, we can still integrate it.

Q: It is not a massive upheaval then – it can just be put right in the chain?

A: Yes, for example carton printers can insert track and trace inline after the product is packaged and before the outer wrapping is applied.

Q: Clearly, counterfeiting is a problem and will remain a problem. Playing catch-up with counterfeiters is a tough job that brands and retailers have no choice but to do.

A: The only way to fight counterfeiters is to know what is going on with your product in the market. Using track and trace you can verify quickly in the field. For example they can have encrypted data so end-users can take an image with a smartphone to see if it is a real product or a copy.

Previously, people had to buy a product and go back to the company to check. Now we have solutions to know in real-time whether these products are in the right place, or also identify counterfeit products. If you can prove when in shops that the product is fake you can even call the police.

Also brand owners complain that governments do not do enough, but governments have asked for the tools. This is why we try to work to find verification that is easy and as quick as possible.

Q: Would like to add anything more?

A: As our company began numbering, coding and security printing in 1955, we are experts in this field. A lot of people claim to offer track and trace but only have parts of, and not the whole solution. This is why some companies have had bad experiences. They have the best technology but are not able to use it. We offer the complete answer – high quality and versatility, by managing variable data, production speed and verification.