Reportlinker Adds Impact of Counterfeits on Parallel Trade & Pharmaceutical Distribution: Issues, initiatives and insights for supply chain integrity

Thursday, November 5, 2009 General News
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NEW YORK, Nov. 3 announces that a new market research report is available in its catalogue.

Impact of Counterfeits on Parallel Trade & Pharmaceutical Distribution: Issues, initiatives and insights for supply chain integrity


Parallel trade is a legitimate method of pharmaceutical import and export within the EU zone. Although previously recognized in North America as illegal, cross-border reimportation is now permitted following legislation allowing drugs to be imported into the US from Canada. However, counterfeit drugs have been shown to be increasingly introduced into the global supply chain, which threatens patient safety, ethical pharmaceutical sales, and undermines the integrity of the distribution channels. Parallel trade is regarded as a major contributor to counterfeiting and this is explored in the report.

Furthermore, the report provides a comprehensive account of the route of market access for counterfeits and shows how companies and governments in Europe and North America are tackling the problem strategically. It also updates the reader on the latest parallel trade and anti-counterfeiting initiatives adopted globally and whether current efforts to stem the practice have been successful or not. The report discusses further action plans and recommends which strategies are likely to best curtail the practice.

This report also evaluates the extent of parallel trade in Europe and counterfeiting globally with an analysis of major counterfeit-producing countries and the anti-counterfeiting efforts currently in place.

Key findings

-- Parallel trade is an expanding global sector of industry now that reimportation is permitted in the USA. European parallel trade is set to grow based on accession countries providing new markets in which to trade multiple products in multiple markets.

-- Counterfeiting is prevalent in higher priced drug markets of developed nations and also in lower priced markets of essential drugs in developing countries.

-- The drug distribution routes are the market access points for counterfeits. Parallel traded and non-parallel traded routes are vulnerable to counterfeiting.

-- Anti-counterfeiting technologies are being deployed in westernised countries but there are issues that need to be resolved before widespread implementation such as standardization of protocols, technology reliability and validity, and stakeholder funding.

Key features of this report

--Analysis of parallel trade and counterfeiting in European Union, North America, Asia and Africa. Country-by-country analysis including France, Germany, UK, USA, Spain, Netherlands, USA, Canada, China, India, and other countries.

--Evaluation of the drivers behind parallel trade and counterfeiting in context of drug distribution.

--Coverage of recent regulatory and legislation changes relative to parallel trade and counterfeiting in Europe and North America.

Use this report to

--Understand how the international markets are affected by parallel trade and counterfeiting.

--Information on the scope of parallel trade and counterfeiting in key European territories and how importation has affected pricing in North America.

--Evaluate the impact of importation on the US market and how counterfeits can penetrate the drug supply-distribution chain.

--Shows the routes of market access for counterfeits and why they are increasingly being produced.


-- What is the process of parallel trade in Europe and North America and why is it associated with counterfeiting?

-- What is the extent of parallel trade and reimportation in Europe and North America?

-- How has recent regulation and legislation changed the parallel trade sector?

-- What is the impact of online pharmacies on parallel trade and counterfeiting?

-- How are countries dealing with counterfeiting and what efforts have been implemented?

Table of Contents

Impact of Counterfeits on Parallel Trade &

Pharmaceutical Distribution

Executive summary 10

PT in Europe: A legitimate mechanism for redistribution 10

PT in North America: A cross-border growth industry 11

Counterfeits and the global supply-distribution chain 12

Anti-counterfeiting strategies: current perspectives 13

Global initiatives to combat counterfeiting 14

Chapter 1 PT in Europe: A legitimate mechanism for redistribution 16

Summary 16

Introduction 17

The parallel trade process 18

Driving factors for profitable parallel trade 20

Drug price differential 20

Exchange rate fluctuations 21

Government price controls 22

Pharmacoeconomics as a price control measure 24

Multiple importation markets driving profit margins 24

Supportive legal and regulatory free trade framework 25

Selection criteria for parallel-traded drugs 26

Disease incidence and type 26

Drug formulation 26

Transport and distribution 27

Advantages and disadvantages of parallel trade 29

Key advantages of parallel trade 29

Key disadvantages of parallel trade 31

Quality and safety concerns: the risk of counterfeiting 32

Parallel traders: building bridges for portfolio services 34

Extent of parallel trade in European markets 35

Denmark 37

Germany 38

France 38

Netherlands 39

Norway 39

Spain 39

United Kingdom 41

Direct-to-pharmacy distribution 42

Pharmaceutical Price Regulation Scheme 2009 43

Recent legislation on parallel trade in Europe 44

Importance of stakeholder support 46

Chapter 2 PT in North America: A crossborder growth industry 48

Summary 48

Pharmaceutical importation in the US 49

The legal framework: past and present 49

2003 Medicare reform bill and Canadian imports 50

Recent legislature on importation 53

Scope of parallel importation in the US 54

Online pharmacies and parallel distribution 56

Unapproved imports in Canada 61

Chapter 3 Counterfeits and the global pharmaceutical supply distribution chain 64

Summary 64

Introduction 65

The extent of counterfeiting - a global analysis 66

Factors driving counterfeit trade 67

Counterfeits in developed countries: recent evidence 70

European Union 70

United Kingdom 71

France 72

Germany 73

Italy 73

Netherlands 73

Recent enforcement action in the EU 74

North America 76

USA 76

Canada 77

Counterfeits in developing countries 78

Counterfeiting in Africa, Asia, Middle East, and South America 79

Africa 81

Middle East 82

Asia 82

Types of drugs targeted by counterfeiters 83

Counterfeits and the pharmaceutical distribution chain 86

Access points for counterfeits 86

Repackaging, wholesaling, and counterfeiting: recent issues 89

Repackaging and counterfeiting 89

Wholesaling and counterfeiting 90

Online pharmacies 90

Unauthorized Internet pharmacies and counterfeits 91

Major producers of counterfeit drugs: China and India 94

China 95

Domestic counterfeiting: recent evidence 96

Contract manufacturing and the risk of counterfeiting 97

The counterfeit route: going West 99

India 99

Factors contributing to copycat & counterfeiting activities 100

The legitimate distribution pathway: problems going West 102

Chapter 4 Anti-counterfeiting strategies: current perspectives 104

Summary 104

Anti-counterfeiting strategies 105

Technical strategies 105

Non-technical strategies 105

Non-technical strategies and counterfeiting: current initiatives 106

Anti-counterfeiting technologies in developed countries 107

Current focus: track-and-trace technologies & mass serialization 109

European Union 109

United States 110

Mass serialization: main technology types 112

Barcodes 112

Radio frequency identification 112

Radio frequency identification in developed countries: recent activities 116

Chemical authentication technologies in developed countries: recent activities and initiatives 117

New packaging technologies 119

Anti-counterfeiting technologies in developing countries 120

Radio frequency identification in developing countries: recent activities 120

Chapter 5 Global initiatives to combat counterfeiting 122

Summary 122

International anti-counterfeiting initiatives 123

Government efforts 123

European Commission 123

United States Department of Health & Human Services 126

World Health Organization 127


Non-government efforts 129


Medecins Sans Frontieres 130


Anti-counterfeiting initiatives in Asia 131

India 131

China 132

Taiwan 134

Pharmaceutical trade and industry organizations 135

Pharmaceutical Security Institute (PSI) 136

International Federation of Pharmaceutical Manufacturers Associations

(IFPMA) 136

European Federation of Pharmaceutical Manufacturers Associations (EFPIA) 137

The European Alliance for Access to Safe Medicines (EAASM) 139

New initiative: Rx-360 139

Stockholm Network 140

Considerations for parallel trade and counterfeiting 140

Key points and recommendations 140

Chapter 6 Appendix 143

Primary research methodology 143

References 143

Websites 144

Glossary 145

Index 147

List of Figures

Figure 1.1: Generalized parallel trade process for pharmaceuticals in Europe 19

Figure 1.2: Major factors contributing to parallel trade in the EU 28

Figure 1.3: Advantages & disadvantages of parallel trade 32

Figure 1.4: Estimated market penetration of parallel imports by value in key European destinations (%), 2001 & 2009 37

Figure 2.5: Key opposing issues on parallel importation from Canada 53

Figure 2.6: Prescription drugs typically imported into the US 56

Figure 2.7: Typical savings offered by a Canadian online pharmacy, 2009 58

Figure 2.8: Lowest price guarantee offered by Canadian online pharmacy, 2009 59

Figure 3.9: Therapy areas with largest increase in incidents y-o-y (%), 2008 67

Figure 3.10: Key factors driving counterfeiting in pharmaceuticals 69

Figure 3.11: Increasing trend of counterfeiting, illegal diversion and theft of pharmaceuticals, 2002- 2008 70

Figure 3.12: Counterfeit access points in the drug distribution chain 87

Figure 4.13: Non-technical and technical anti-counterfeiting strategies used in the drug supply and distribution chain 107

Figure 4.14: Advantages & disadvantages of RFID & EPC anti-counterfeiting technologies 115

List of Tables

Table 1.1: Common pharmaceutical pricing controls 23

Table 1.2: European stakeholder support initiatives 46

Table 2.3: Key Provisions of the H.R.1 [108th] Medicare Prescription Drug, 51

Table 2.4: Key Provisions of the H.R.1 [108th] Medicare Prescription Drug, 52

Table 2.5: Popular online pharmacy brands, 2009 57

Table 2.6: Popular full service online pharmacies in the US 60

Table 2.7: Drug price savings offered by Canadian pharmacies in 2009 61

Table 3.8: Results of IMPACT-INTERPOL anti-counterfeit initiatives in developing countries 80

Table 3.9: Lifestyle drugs potentially targeted by counterfeiters 84

Table 3.10: Products susceptible to counterfeits in the US, 2004 85

Table 3.11: Authorized online pharmacies in the US 92

Table 4.12: Anti-counterfeiting technology types 109

Table 5.13: Key European Commission anti-counterfeiting proposals, 2008 124

Table 5.14: World Health Organization guidelines to combat drug counterfeiting 128

Table 5.15: EFPIA policy initiatives on parallel trade to maintain supply integrity 138

To order this report:

Impact of Counterfeits on Parallel Trade & Pharmaceutical Distribution: Issues, initiatives and insights for supply chain integrity

More market research reports here!

Nicolas Bombourg Reportlinker Email: US: (805)652-2626 Intl: +1 805-652-2626

SOURCE Reportlinker

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