A Fraud and Counterfeit Detection System Based on Supply Chain Inconsistencies

Asim Roy (Inventor)

Research output: Patent


The counterfeit drug problem:Counterfeit drugs are broadly defined as medicines that fall into these categories: Fakes containing no active ingredient A different drug than prescribed Real drugs that are diluted Unapproved foreign versions of a drug soldAt a 2005 international drug counterfeiting conference, CMPI (Center for Medicines in the Public Interest) projected worldwide counterfeit drug sales to reach $75 billion in 2010, a 92 percent increase from 2005. The following is from an article in WebMD on how the drug supply chain gets corrupted: Three major wholesalers in the U.S. handle about 90% of the pharmaceutical distribution. The rest are handled by "secondary-source" wholesalers, of which there are thousands. Some of these secondary wholesalers are perfectly legit. Others are less so, to varying degrees. It tends to be through them that counterfeit drug products end up on pharmacy shelves. Knowingly, or with eyes half shut, an unscrupulous wholesaler may buy counterfeit drugs or cheap drugs from an illegal source. The wholesaler profits by selling that product to another wholesaler, who sells it to yet another wholesaler. By the time the counterfeit drugs reach the pharmacy, the original source has been obscured.Many pharmaceutical companies and governments are reluctant to publicize the counterfeit problem to the public, apparently motivated by the belief that the publicity will harm the sales of brand-name products in a fiercely competitive business.It's also estimated that inventory worth $40 billion is lost or stolen somewhere along the pharmaceutical supply chain every year. The invention disclosed here will address both of these problems. So when put into practice, it can have a significant impact on the bottom lines of pharmaceutical companies.No current solution to the counterfeit drug problemThe counterfeit drug problem is still an unsolved problem for the pharmaceutical industry worldwide. One of the proposed solutions is to use some combination of various tags - serialization, RFID (radio frequency IDs) tags and so on - on pills, tablets, containers, boxes etc. to prevent counterfeiting. The belief is that these tags, along with drug pedigree information in electronic form, can be used in the supply chain to authenticate the drugs flowing through the system. However, these tools and technologies have yet to gain traction in the pharmaceutical industry. First, these proposed solutions will add substantially to the distribution cost of drugs and there is no certainty that it will have much of an impact on the counterfeiting problem without widespread adoption at every level, from the manufacturer and wholesaler to the retailers. Second, the counterfeit problem has a variety of forms that potentially can hide under or get around these track-and-trace systems. So the industry as a whole is not embracing these track-and-trace solutions. Overall, these conventional ideas of track-and-trace are vulnerable, costly and may not see widespread adoption by the industry in the near future. And the software industry that provides the supply chain software to the pharmaceutical industry has no better ideas to address this problem. This invention disclosed here proposes a simple and powerful solution to this complex and intractable problem.The new solution to the counterfeit drug problem:1. A Macro Level Counterfeit Volume Detection System: At the macro level, this system will monitor the drug supply chain and report to the manufacturer the degree of counterfeiting in a certain product type. This will provide the manufacturer with valuable information as to where they are losing money and where to take action. 2. A Counterfeit Source Detection System: The above macro level solution doesn't help that much unless a manufacturer can pinpoint the sources that are conduits for counterfeit drugs, such as wholesalers and retailers. Thus this part of the system will monitor every wholesaler and retailer in the drug supply chain on a real-time, ongoing basis to report unusual activities. Pattern recognition techniques will be used to detect such unusual activities in the supply chain.
Original languageEnglish (US)
StatePublished - May 10 2006


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