Across the globe, the pharmaceutical and chemical industry is confronted with product-related crime. Counterfeit medicines in particular pose a major challenge, while also representing a serious threat to public health. According to the World Health Organization (WHO), a considerable proportion of the medicines for sale in developing health care systems are illegal, counterfeit or substandard. Interpol estimates this at up to 30%. This issue is aggravated by a lack of adequate quality control in the protection, security and drug approval systems. Due to the sale of products through unlicensed internet pharmacies and online underground business-2-business platforms, the percentage of substandard and/or counterfeit medicines is growing rapidly in industrialized nations as well.

Because criminal organizations are becoming increasingly professionalized, pharmaceutical manufacturers are facing ever-growing requirements to track and monitor their products. Effective protection systems and market monitoring are becoming increasingly important for both the products themselves as well as the distribution channels.

Merck KGaA, Darmstadt, Germany develops and manufactures products of the highest quality. We take action against product-related crime to prevent harm from coming to customers and patients, as well as to protect our reputation as a company. Here, we are developing a strategy of collaborating with law enforcement, fostering internal and external networks, and establishing product security measures. We have created policies, standards and processes that cover all businesses of the company worldwide.

Group-wide network

The Group function Corporate Security is the internal and external point of contact for all anti-counterfeiting activities of the company and is also in charge of steering and coordinating these activities. Corporate Security follows the company's internal “Crime relating to products” guideline, which describes the goals and strategy for handling product-related crime. All activities to fight product-related crime take place under the supervision of the Chief Security Officer and the Head of Environment, Health, Safety, Security and Quality. Furthermore, at all the biopharmaceuticals business sites we have deployed local anti-counterfeiting correspondents; these employees act as the interface between local regulatory and law enforcement authorities, domestic associations, Group functions, and our businesses. We gauge our measures according to the number of incidents reported, the severity of the incidents, and the rollout of product security features.

The Merck KGaA, Darmstadt, Germany Anti-Counterfeiting Operational Network (MACON) is headed by Corporate Security and is responsible for monitoring and implementing all global anti-counterfeiting measures for our products. The network consists of experts from various units such as Legal/Trademarks, Product Security, Export Control, Supply Chain, and Quality Assurance. Its tasks include coordinating preventive measures, sharing information, securing evidence, conducting investigations and developing and implementing security systems. Where appropriate, the network collaborates with the relevant regulatory authorities and law enforcement agencies.

MACON reviews and handles approximately 70 cases of product-related crime per year, including inquiries from authorities that arise during backtracking investigations. In 2013 and 2014, we focused our activities on the internal coordination and support of two major criminal investigations conducted by law enforcement against major organized crime groups.

Educating our employees and business partners

The fight against product-related crime and counterfeit products is an integral part of our risk management system. In order to minimize risks, we provide training to employees of our subsidiaries, as well as to business partners in the countries in which we lack our own legal entity. In 2013, we held multi-day workshops and training seminars in China and Germany. During a global workshop, our security personnel from the United States, Mexico, Latin America, and eastern Asia were brought together to develop ideas to continuously improve our internal control measures. Product-related crime also featured as a topic during our Africa Conference 2014. During 2013 and 2014, we conducted security audits at partner companies in Brazil, Mexico, India, Russia, Italy, and Germany.

Authenticity and tracking

Besides implementing internal quality control systems and strictly adhering to all export and trade guidelines, we also combat counterfeit products through innovative solutions tailored to specific markets and target groups. These measures aim to help our customers and patients determine for themselves the identity or authenticity of a pharmaceutical product. Here, we are applying multiple approaches in parallel.

• We use security markings with protected color travel pigments of our own manufacture on our product packaging and labels. Called Security-M, this enables users to easily verify the authenticity of our products. These security features are considerably harder to counterfeit than the holograms that are frequently used. In 2013, our Quality Council decided to further roll out Security-M on our products.
• We employ identification and shipment tracking systems such as Track and Trace, which has already been fully implemented in the United States and is currently being expanded to other markets.
• Since December 2014, the biopharmaceuticals business has been serializing all of its major brands in the United States, which thus allows physicians, pharmacists and patients to verify their medicines. Furthermore, the biopharmaceuticals business has launched Check My Meds. By using this free smartphone app, patients in the United States can verify the serial number of their medicines.
• In the Mobile Anticounterfeiting System (MAS) project in Nigeria, we are partnering with a supplier to detect counterfeit medicines through a mobile phone/text message-based identification system. Patients scratch off a barcode that is affixed to the product packaging and send it to the MAS via text message; they then immediately receive a message telling them whether the number on the product is authentic or not. These projects have fostered public and patient awareness on the issue of counterfeit medicines and further increased the trust in our products.

We have made strong progress in systematically implementing the requirements of the EU Falsified Medicines Directive , such as the application of a unique serial number to our pharmaceutical packaging. Furthermore, we are participating in corresponding pilot initiatives of the German and European pharmaceutical industries. Similar efforts are underway in the U.S., where the Food and Drug Administration (FDA) requires drug companies to include a unique serial number on each package of drugs dispensed by 2017.

In addition to this, a comprehensive auditing system for distributors and contract manufacturers ensures that Good Manufacturing and Good Distribution Practices (GMP/GDP) are adhered to. This system is based on the EMA ICH Q10  pharmaceutical quality assurance standard.

For our customers in the pharmaceutical industry, we offer Candurin^® pearl effect pigments, which feature unique color properties that make tablets and capsules more difficult to counterfeit.

We have established an internal control system to monitor and track chemicals that can be misused to produce illegal weaponry, explosives, and narcotic drugs, collaborating closely with regulatory and law enforcement authorities. Our system flags suspicious orders and/or orders of suspicious products. We will only release products once we have verified the existence of an end-user declaration. Furthermore, we also proactively report suspicious orders to the relevant authorities. In doing so, we are adhering to a commitment made by the German Chemical Industry Association (VCI) and to the “Guideline for Operators” published by the EU Commission. We also participate in export control proceedings and, in certain cases, provide reports to law enforcement agencies.

Minilab for on-site testing

Merck KGaA, Darmstadt, Germany funds the non-profit Global Pharma Health Fund (GPHF), which supplies a portable analysis kit (the GPHF-Minilab^TM) to check the quality of medicines on 75 drug compounds. With the Minilab, counterfeit medicines can be detected quickly, easily and cheaply, even in developing health care systems. Further information can be found under Society.

Multifaceted engagement and stakeholder dialogue

We are fighting product piracy in partnership with organizations such as EFPIA, IFPMA, and VFA. We also support industry-wide initiatives and collaborate closely with regulatory authorities and law enforcement at a national, regional, and international level.

A particular area of emphasis is our work with the Pharmaceutical Security Institute  (PSI); this organization is dedicated to protecting public health by sharing information on counterfeit pharmaceuticals as well as initiating enforcement actions through the appropriate authorities. When product-related crimes are committed, we collaborate with the law enforcement agencies and customs authorities in the respective countries, with Interpol, with the World Customs Organization, with health authorities, and with our peer industry. Merck KGaA, Darmstadt, Germany is also a member of Rx-360 , a consortium of global pharmaceutical manufacturers and suppliers that aims to prevent counterfeit products through the introduction of global quality control systems.