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Arzneimittelfälschungen-Coronavirus

Coronavirus prognosis 2020: From fake news to counterfeit drugs

Fake news about the coronavirus is circulating as well as fake food supplements and the first counterfeit pharmaceuticals, which for example make claims of the sudden discovery of a miracle cure for the novel COVID-19 virus. They brazenly exploit the uncertainty and fear of many people in the current situation. But a much greater danger awaits us…

This forecast deals with the global problem of trade in counterfeit drugs: The marketability of the first coronavirus cures and vaccines, on which researchers and doctors are working intensively, will not only bring hope and healing, but will also open up an extremely profitable niche in the counterfeiting market.

Counterfeiters will soon find ways to imitate original coronavirus medicine and sell counterfeits both online and through the legal distribution chain. The following 3 facts support this forecast and more than clearly demonstrate the danger:

  1. Trade in counterfeit drugs has long been an established and highly professionalized organized crime, responsible for billions in losses and deaths.
  2. The fear and insecurity of people caused by the coronavirus pandemic is already being exploited by dubious online sellers.
  3. The first coronavirus-related counterfeits already became known: Counterfeit medical equipment is now among the top sellers online!

 

Arzneimittelfälschungen-Coronavirus

Coronavirus cure or coronavirus vaccine – when will they be ready for the market? And when will the first counterfeit drugs appear?

 

1. Trade in counterfeit drugs has long been an established and highly professionalized organized crime, responsible for billions in losses and deaths.

 

Trade in counterfeit drugs has become one of the biggest global problems: According to the World Health Organization (WHO), about 15 percent of all drugs worldwide are suspected to be fake, in Asia and Africa the figure is as high as 30 to 50 %. In German pharmacies and clinics, it is estimated that almost every 100th drug could be counterfeit.

In the EU member states, a considerable increase in trade in counterfeit drugs has been observed in recent years – despite strict regulations. In Europe alone, the pharmaceutical industry loses more than 10 billion euros a year, according to Europol and EUIPO (losses of retailers such as pharmacies not included):

EUIPO – The economic cost of IPR infringement in the pharmaceutical industry

Die EUIPO veröffentlichte diese Statistik:Die EUIPO veröffentlichte diese Statistik: Für die EU als Ganzes wird die Gesamtwirkung von Fälschungen auf 4,4% des Umsatzes oder 10,2 Milliarden Euro geschätzt. Dies ist eine direkte Schätzung der Umsatzverluste, die den rechtmäßigen Herstellern und Großhändlern von Arzneimitteln in der EU jedes Jahr aufgrund von Fälschungen entstehen.

EUIPO published these figures: For the EU, the total impact of counterfeit drugs is estimated at 4.4 % of sales or 10.2 billion euros.

 

For the criminals profits are much higher than in common drug trafficking. However, theft and resale of drugs and counterfeiting drugs are no longer the exclusive domain of dubious online providers. In German pharmacies, too, more and more stolen drugs, decanted, diluted and manipulated, are reappearing. In particular, more and more drugs are being stolen from Italian hospitals, such as the cancer drug Herceptin from Roche in 2014.

The manipulated Herceptin ampoules eventually turned up in German pharmacies. Counterfeiters were also able to smuggle these counterfeit drugs into Finland’s and Great Britain’s legal distribution channels seemingly without any difficulty. And this means huge sums were falling into the counterfeiters’ hands: 150 mg of the complex preparation against breast cancer is worth about 850 €!

The cancer drug has a biological half-life of 2-12 days and must be transported at a temperature of -20°C. It is rather inconceivable that the counterfeiters have paid attention to the correct storage temperature and corresponding transport conditions, so that the active ingredient contained will have lost most of its potency.

The counterfeiters have already built up a highly “professional” network – not only online – which seems to function smoothly. They also seem to be far ahead of the current, sometimes frighteningly outdated security systems of manufacturers and legal sellers. These experts will certainly not hold back in selling counterfeit coronavirus pharmaceuticals, because the estimated profit could exceed all previous prospects.

There is an enormous need for action at this point and it is precisely in relation to the coronavirus crisis that action must be taken NOW. Appropriate precautions must be taken as a matter of urgency even before the first drugs and vaccines against coronavirus will leave production, so that the counterfeiters cannot shamelessly exploit this situation and – in the worst case – lead to more fatal incidences.

In addition to the billions lost and the enrichment of the criminals at the expense of the health or even lives of victims, the companies’ reputation is affected as well. In the past, doctors and pharmacists often switched to preparations from other manufacturers as soon as cases of counterfeit drugs became known. The image damage caused by counterfeiters’ activity is clearly not the fault of these companies, but it takes years, perhaps decades, to rebuild their reputation usually with more investments in marketing and advertisements.

But in the meantime the counterfeiters do not sleep.

 

They will take one drug after the other for counterfeiting purposes and obviously it can hit the same company several times (and more certainly, it will, since counterfeiters will target them again and again thanks to their knowledge about how to steal products and reenter a company’s supply chain). Just take a look at the websites and landing pages of the big pharmaceutical companies (31.03.2020):

  • Bayer is warning of possible medical counterfeits in the legal distribution chain (in addition to counterfeit drugs sold through unauthorised distribution channels): 

“Warning about counterfeiting in the legal distribution chain:
Xarelto® 20 mg film-coated tablets in pack size N2 (28 tablets), lot BXHVHC3 in the Polish-Slovak style, are most likely counterfeit. If you have such a package, please contact us immediately.”

  • Pfizer does not provide information on counterfeit drugs on its German website. But it is no secret that the popular blue Viagra pill – Pfizer’s successful recipe for treatment of erectile dysfunction – is the most faked drug to date. Or at least one of them… The German newspaper BILD expresses it – as always – in a particularly radically way: “Rat excrements and lead paint in fake Viagra pills! That’s how dangerous the plagiarisms are.” Unfortunately, in many people’s minds, Pfizer has become the one big pharmaceutical company that represents the negative side of the pharmaceutical industry as a whole… The well-known company is struggling with massive reputation damage. Therefore, it is sometimes completely overlooked when the company is doing something good.
  • More current examples you will find among the Food and Drug Administration’s list: FDA alerts.

Both Bayer and Pfizer are on the front lines in the fight against the coronavirus. Bayer is already warning about criminals who are taking advantage of the current situation and the fear of the public on its landing page for counterfeit drug warnings. Pfizer outlines a five-point plan to battle COVID-19, calling on the entire pharmaceutical industry to cooperate in battling coronavirus instead of continuing to compete with each other. Together with BioNTech, they are also developing a vaccine against COVID-19.

The counterfeiters are unlikely to hesitate to take advantage of this… They have already had great success with Pfizer products and can easily go for it again!

2. The fear and insecurity of people caused by the coronavirus pandemic is already being exploited by dubious online sellers.

 

Apart from false reports on the coronavirus pandemic, that are based on political or religious interests, fake news have one intention in particular: to promote sales. Warnings of dubious health promises are also prominent online but these are few compared to the vast amount of sellers that are trying to take advantage of people’s fears.

Among others there is the false claim, that the “active ingredient chlorine dioxide” helps against coronavirus. This is a conventional bleaching agent, the oral intake of which can be very dangerous and harmful to human health.

The coronavirus market is booming for food supplements as well, as people are insecure and are looking for complementary preparations to support their immune system in its defence against the virus. Vitamin preparations and other products are being counterfeited. The new Golisan blog entry is mainly about dietary supplements that are aggressively advertised with the keyword corona.

“Other products are also aggressively advertised with corona hashtags
… from sweaters and socks to handmade Disney articles on Etsy – on this platform, for example, products relating to coronavirus have already been removed. The major marketplaces Amazon and Ebay are taking action against the corona traders as well. Amazon has already blocked and deleted tens of thousands of corona articles and sellers, that are trying to make a profit out of the uncertainty of customers by advertising their products with usurious prices.”

But the petty criminals, from food supplement counterfeiters to sellers on Social Media, Etsy and others, are far from being the real danger. These examples only show that all over the world there is a great willingness to engage in dubious online trading and turn a profit out of the crisis.

The real danger, however, is that the big counterfeiters will soon take the initiative. And this is only half a prognosis, because it’s a fact, that they are already doing so:

@europol.eu is posting about the current situation: thousands of online sellers and counterfeiters are trying to exploit people fears of coronavirus

Europol is posting about the current situation: thousands of online sellers and counterfeiters are trying to exploit people’s fears of getting sick and infecting loved ones. Unfortunately, there a only few such posts that are almost completely drowned in fake news and exploitative advertisements of face masks, disinfectants and a few weeks ago even pasta, that has been traded with like it was cocaine.

 

3. The first coronavirus-related counterfeits already became known: Counterfeit medical equipment is now a top seller online!

 

Coronavirus has already opened up this very profitable niche in the counterfeiting market: Criminals use the high demand in hygiene products driven by the coronavirus outbreak as a new business opportunity. The trade in counterfeit protective masks and other medical accessories has taken on radical, hardly scalable proportions in the past few weeks. According to Europol, about 34,000 counterfeit surgical masks were recently seized during a worldwide police operation.

The counterfeiters also fake antiviral drugs, for which, however, no effect against coronavirus has been proven so far. Europol has already seized 4.4 million units of illicit pharmaceuticals worldwide and 2.500 links have been taken down (including websites,  online marketplaces, adverts and social media).

But cybercrime doesn’t stop there. Many employees of large companies currently work on their less well-secured home computers and access employers’ networks from there. The lack of cybersecurity makes it much easier for counterfeiters to gain access to confidential data and valuable internal information during the coronavirus crisis, which can be misused in every conceivable way. This can be as easy as stealing the graphic designers’ coronavirus pharmaceutical packaging design.

The trade in counterfeit medical equipment not only demonstrates how fast counterfeiters can act, but also demonstrates the real danger: How many doctors in hospitals are unknowingly working with counterfeit masks that are permeable to the virus, at this very moment? How many medical assistants will infect themselves and others through fake equipment?

How many human lives are at stake?

Conclusion

 

What we need is a revolution in the fight against counterfeiting and an efficient solution that will enable us to detect counterfeit products such as counterfeit drugs, and, on the other hand, to verify the authenticity of original drugs and prevent major damage.

Arman Sarhaddar, CEO and Founder of Vault Security Systems AG and the new brand ivault, is sure that with the innovative application of blockchain we can drastically reduce the frightening numbers of counterfeit drugs. Many pharmaceutical companies already have QR codes on their packaging, but what is missing is the registration of their products in the blockchain, which offers the highest possible product safety and data security.

If Europe wants to be a blockchain pioneer, now is the time to implement a blockchain solution to solve this problem, because Blockchain technology does indeed provide the optimal solution.

 

iVault verified: Protect products against counterfeit

What are the consequences of piracy and trade in counterfeit products?

Counterfeit products: Here are some more insights from the event at Park Hyatt Hotel in Zurich following the question: Why do we need a product like ivault, that provides an even higher level of cybersecurity than any other technology can provide?

Our B2B product helps businesses secure their supply chain and protect their products from counterfeit and plagiarism. In addition, companies can track and manage their complete product life cycles easily through our application. In his presentation, CEO Arman takes a closer look at the counterfeiting market and the counterfeiters to assess today’s situation.

iVault verified: Protect products against counterfeit

ivault verified: Protect products against counterfeit and piracy.

Counterfeit products: the counterfeiting market is booming

 

Trade in counterfeit and pirated goods is an extremely dynamic and constantly changing phenomenon, as the OECD (Organisation for Economic Co-operation and Development) states. A study was conducted based on half a million seizures of pirated products, that shows: In 2016, 3.3% of world trade falls into the counterfeiting market, and almost 6.8% of EU imports. These figures emphasize once again the need for coordinated global action against piracy and trade in counterfeits.

In his presentation, CTO Martin Beyer explained how companies like Golisan can protect their products with ivault. The ivault blockchain makes it easy to detect counterfeit products that entered the supply chain before major damage may be done to costumers or companies’ reputations. The ivault verified label will thereby serve as an effective deterrent to counterfeiting and fraud (and then, of course, to theft as well, concerning our B2C platform to register and search for lost and stolen items via ivault.app).

So with growing brand awareness of ivault, more and more counterfeiters will avoid messing with companies that have their products labeled as verified by ivault, because – thanks to the benefits of blockchain technology – it can expose their criminal activity pretty quickly. For further information on how ivault works, you can read this article here.

But, returning to the figures mentioned above, how can it be that pirated products and fakes amount to that much of world trade and EU imports? In this video Arman explains not only why the counterfeiters’ market is growing so fast but who they are and what they do. Don’t forget to change the settings in the bottom right corner of the YouTube video to turn on English subtitles:

How can we take action against counterfeiters and prevent at the same time?

 

To summarize what Arman says, the counterfeiters do not pay taxes nor invest in research and development. That is what the big companies do. So, one can easily conclude, how the counterfeiters display more growth than Belgium or Switzerland. As a consequence, this will cause job losses and an increase in government social expenditure.

From producer to end consumer the supply chain usually comprises wholesalers and retailers. But there can be many parallel imports and traders as well as several other distributors in the network. Somewhere in between a counterfeiter can infiltrate this system and channel counterfeit products into the process. In the internet there are more and more sneaky methods used to sell fake products. In both cases, these products usually do not comply with safety standards or limit values for ingredients (of medicine for example) leading to fatal incidences at worst.

But how can we avoid this with the ivault blockchain? The solution is simple: The producer prints a QR code onto the package of his product. Wholesalers, retailers, parallel distributors and traders have to scan this code with the ivault app in order to check if it is the original product. The information, that the product has arrived and has been scanned will be stored in the blockchain. The producer is able to check for example whether the product has been successfully shipped to and scanned by the wholesaler.

Thus the supply chain is completely transparent and data, once registered on the blockchain, cannot be manipulated or tampered with anymore. If suspicion arises, for example when a product is scanned but there is no information about it on the blockchain, you can easily narrow down the search for where the error occurred.

Arman is convinced that ivault will already achieve something outstanding by gaining control of 10% of the counterfeiting market. Would you like to know more about how ivault.app works? Leave a comment in the comment section below. We are looking forward to answering your questions.

If you have not yet subscribed to our ivault YouTube channel, you can click here to find Vault Security Systems AG on YouTube. We will soon be uploading more video content of CEO Arman Sarhaddar. You can also subscribe to the ivault newsletter here.

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Arman Sarhaddar about Amazon Transparency and blockchain

In short: Amazon Transparency is far from being the ultimate answer to the global problem of counterfeit products. Arman Sarhaddar, CEO and founder of Vault Security Systems AG, wrote a guest article for Industry of Things about this explosive topic.

Industry of Things is a a German online platform for expert insights on topics we are all interested in like Internet of Things (IoT), Artificial Intelligence (AI) and Blockchain technologies.

This blog entry is giving you a translation of what Arman is talking about in his first guest article which is available only in German.

Arman explains, that Amazon Transparency is still not the ultimate answer to the problem of counterfeit products. But the fact that one of the world’s largest online retailers is announcing that it will provide more transparency when it comes to product authenticity shows the urgent need for action.

Arman explains, that Amazon Transparency is still not the ultimate answer to the problem of counterfeit products. But the fact that one of the world's largest online retailers is announcing that it will provide more transparency when it comes to product authenticity shows the urgent need for action.

Arman explains, that Amazon Transparency is still not the ultimate answer to the problem of counterfeit products. But the fact that one of the world’s largest online retailers is announcing that it will provide more transparency when it comes to product authenticity shows the urgent need for action.

The struggle with counterfeit products

 

A few weeks ago, the e-commerce giant Amazon announced that it was rolling out its the Amazon Transparency program in Europe. Manufacturers can then provide their authentic products with a QR code that provides retailers and customers with unambiguous proof of authenticity. In this way Amazon wants to counteract the flood of fake products and create more trust among its customers. The approach is basically welcome – but Amazon Transparency has limitations especially when it comes to some special groups of products.

With the Amazon Transparency program, the online giant is primarily concerned with improving its own image. The reputation of the US company has suffered from fraud, falsified valuations and product imitations, particularly among retailers.

But Amazon Transparency is not equally suitable for all products. It is a form of labelling that works for goods that are actually primarily about authenticity, such as clothing and bags. However, this is not enough for products with an elaborate supply chain where claims for damages play a role. Examples include medical products. Customers in this sector have to be sure that they have not purchased a counterfeit, that could in the worst case be harmful to health. This is why tracking ingredients is critical in the medical sector in particular.

3 reasons why blockchain can help

 

First, once fed in data is unchangeable, subsequent manipulation is excluded. Another blockchain characteristic is that all available information is stored and verified decentrally on all computers connected to the network.

Secondly, the blockchain is virtually unhackable, since changes always have to be made in the majority of nodes.

Thirdly, transaction costs can be significantly reduced by skipping middlemen. In particular, the use of Smart Contracts simplifies data management and automation.

An example of how tracking can be implemented on the blockchain is the ivault pilot case with the Swiss company Golisan GmbH. Golisan produces herbal extracts which are sold online – mostly via Amazon. In view of counterfeit products and in terms of quality assurance, it is important to the manufacturer on the one hand to guarantee the authenticity to the customer and on the other hand to be able to trace the origin of the ingredients completely.

Counterfeit food supplements are a lucrative business because they are less strictly monitored than prescription drugs. Fake products are sold via Amazon in particular, so the online giant recently sent a warning to affected customers.

Apart from the potentially serious consequences of taking counterfeit dietary supplements, the counterfeits have a negative impact on the business balance and reputation of the actual manufacturers. Beyond the authenticity guarantee, the manufacturer’s goal is to monitor the entire supply chain to provide maximum security for its customers.

For this reason, all suppliers have access to the blockchain and can store information on the ingredients: from the harvest of the plant raw materials to their further processing and the container in which the product is sold. For this application, it is advisable to use software that has been developed for this kind of collaboration so that data can be exchanged with other areas of technology. This also facilitates the integration of the blockchain into the existing supply chain management.

Blockchain solutions can be implemented in a resource-saving way

One of the biggest points of criticisms frequently voiced about blockchain technology is its comparatively high energy consumption. However, a distinction must be made between mining activities, which are necessary for crypto currencies and are actually very energy-intensive, and applications for companies, such as securing the supply chain.

The latter takes place in a private blockchain and without the computationally expensive proof of work. So the energy requirement is no higher than that for common web apps. Additionally, since fewer nodes are involved, the transaction speed can be increased.

Examples such as Amazon Transparency show that companies are concerned with the security of their goods against counterfeiting, but they are not yet exploiting the full potential that would be possible with blockchains. The technology has long since arrived in practice and simplifies processes beyond crypto currencies that were previously cumbersome or even impossible to carry out.

When selecting a technology partner, companies should consider whether the solution can be well integrated into the existing IT. This will lay the foundation for more transparent supply chain security and valid proof of authenticity.

Amazon Transparency: What do you think?

 

Industry of Things brings together experts from IT and industry to facilitate interdisciplinary exchange across boundaries. Not only more than 40 editors report on current developments in the Internet of Things and industry, but also experts whose proximity to practice offers a new perspective on applications, technologies or IT security as well as political and current topics. Arman Sarhaddar is from now on sharing his expert knowledge on blockchain and InfoSec on this high-ranking platform as well. We will keep you updated on a regular basis.

What do you think of Amazon Transparency and the potential of the ivault blockchain in this sector? Join in the discussion and leave a comment. We will respond as soon as possible.

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