Point Number 1: Counterfeiters are perfectly willing to eat a legitimate brand owner’s lunch. Anti-Counterfeiting measures take patience and wisdom. Just as “shoplifting is stealing”, counterfeiting is not a victimless crime, “it can be (and is) murder”. — Donfucius

Point Number 2: “Diplomacy is the art of saying “Nice doggie” until you can find a rock.” — Will Rogers

Point Number 3: “My father said there were two kinds of people in the world: givers and takers. The takers may eat better, but the givers sleep better.” — Marlo Thomas

Counterfeiters are copycats.

Point Number 4: “No matter how much cats fight, there always seem to be plenty of kittens.” — Abraham Lincoln

We, as a nation, must take positive action against the counterfeiters.

Point Number 5: “Don’t talk about what you have done or what you are going to do. Do you want to know who you are? Don’t ask. Act! Action will delineate and define you.”
Thomas Jefferson

Point Number 6: “First ask yourself: What is the worst that can happen? Then prepare to accept it. Then proceed to improve on the worst.” — Dale Carnegie

Tough Laws are needed to fast track anti-counterfeiting systems, and stiff fines and jail terms are necessary for those that place the public at risk.

Point Number 7: “I have wondered at times what the Ten Commandments would have looked like if Moses had run them through the US Congress.” — Ronald Reagan

Above: Anti-Counterfeiting measures require tough and decisive actions. We’re not in Mayberry anymore.

Point Number 8: “Wise are those who learn that the bottom line doesn’t always have to be their top priority.” — William A. Ward

The counterfeiting problem is not insurmountable.

Point Number 9: “Don’t let the fear of the time it will take to accomplish something stand in the way of your doing it. The time will pass anyway; we might just as well put that passing time to the best possible use.” — Earl Nightingale

The only thing we have to fear is not doing anything.

Point Number 10: “You never change the existing reality by fighting it. Instead, create a new model that makes the old one obsolete.” — R. Buckminster Fuller

Mindsets. Counterfeiters have the mindset that they can break the laws, provide fake or diluted products, and they do not care if they place the public in harms way. We (you and I) have to have the mindset that says, “No, you can’t do this“. — Donfucius

Today’s Topics – FDA Q&A. Counterfeit Prescription Drugs.
In the fight against counterfeited prescription medicines, don’t bury your head in the sand. Expect the unexpected. Listen for evil, look for evil, and blow the whistle when you encounter evil.

FDA Questions And Answers. Q. What is the definition of a counterfeit drug? A. U.S. law defines counterfeit drugs as those sold under a product name without proper authorization. Counterfeiting can apply to both brand name and generic products, where the identity of the source is mislabeled in a way that suggests that it is the authentic approved product. Counterfeit products may include products without the active ingredient, with an insufficient or excessive quantity of the active ingredient, with the wrong active ingredient, or with fake packaging.

Donfucius Note: As they dilute or divert legitimate products, counterfeiters also make false and wild claims. In the illustration below, would you rather go camping at a three star campground, five star campground, or fourteen-star campground? There is an old phrase that says: “Let the buyer beware”. In most cases, you will get what you pay for: “The bitter taste of poor quality lingers long after the sweet taste of price has evaporated” (Donfucius).

Q. What risks are involved with taking counterfeit drugs?
A. An individual who receives a counterfeit drug may be at risk for a number of dangerous health consequences. Patients may experience unexpected side effects, allergic reactions, or a worsening of their medical condition. A number of counterfeit products do not contain any active ingredients, and instead contain inert substances, which do not provide the patient any treatment benefit. Counterfeit drugs may also contain incorrect ingredients, improper dosages of the correct ingredients, or they may contain hazardous ingredients.

Q. What can consumers do to protect themselves from counterfeit drugs?
A. Consumers can protect themselves from the risks associated with counterfeit drugs by purchasing prescription medications from state-licensed pharmacies in the U.S. Consumers must be vigilant when examining their personal medications, paying attention to the presence of altered or unsealed containers or changes in the packaging of the product. Differences in the physical appearance of the product, taste, and unexpected side effects experienced should alert the patient to contact their physician, pharmacist, or other healthcare professional who is providing treatment.

Donfucius Note: Ortho Biotech Products issued a warning to health care professionals about the existence of counterfeit vials of its anti-anemia drug Procrit. The concentration of the active ingredient was 20 times lower than what was listed on the label. The two photos (below) show the boxes of the authentic (top) and counterfeit (bottom) product. The counterfeit boxes could be identified by the text running off of the right side of the box. The average consumer would probably not notice this. ATL Pharma Security Label Systems is cGMP compliant. We operate under the strict regulations of 21 CFR 210 and 211. This means we must hold tight registration for both commercial pharmaceutical labels and clinical trials. It is our suggestion that you always buy your brands from reputable companies with anti-counterfeiting protection.

Q. How does FDA work with domestic and foreign government agencies to combat counterfeits?
A. FDA is currently working with various U.S. government agencies, such as the Department of Homeland Security (Customs and Border Protection) and the Department of Justice, to combat counterfeit drugs. FDA is also very active in WHO’s International Medical Products Anti-counterfeiting Task Force (IMPACT) which is a public/private effort to develop regulatory, legislative, enforcement, communication, and technological tools to combat counterfeit drugs around the world. FDA also works bilaterally and multilaterally with individual countries and regions.

Q. Are there any promising technologies that have the capability of preventing counterfeiting?
A. There are several technologies that may prove helpful, including radio frequency identification (RFID) chips and taggants. For example, radio waves are used to automatically read RFID tags that are contained on items, such as pharmaceutical products. These tags could have individual serial numbers on each product, thus allowing the product to be tracked and traced through the supply chain. Appropriate implementation and use of this technology can help decrease the opportunities for diversion and counterfeiting by allowing wholesale distributors and pharmacies to authenticate that the product was handled by legitimate, licensed entities in the drug supply chain.

The fight against counterfeited drugs. Below are two photographs of counterfeited drugs. The average consumer will have a very difficult time telling apart the real from the fakes.

You (as a brand owner or as a consumer) must be able to rely on the labeling/ packaging integrity to identify (thus stop) counterfeiting. ATL has nine trademarked products that provide a mix and rotate (M&R) approach (during sequential production runs) for anti-counterfeiting protection. These include: SecurLock: Tamper-Evident breakaway closure; SecurDetek: Invisible, Hidden Page Marker; SecurMark: Anti-Counterfeiting holograms; SecurStretch: Tamper-Evident Unit Closure; SecurPly: Booklets for soft squeeze tubes; PharmaVoid: Security Closure/ Destructible Tapes; Triple-Ply: Three-Tier overt and / or covert levels of anti-counterfeiting; D2 WAO: Wrap-Around style (up to 35 panels) that fit most cylinders – (U.S. Patent Applied For). Below is an example of ATL’s SecueDetek. This label features an invisible, non-degradable (to 3,000 degrees centigrade) digital forensic code. With this system you can authenticate (anywhere in the world) in one second.

Thus far, the counterfeiting targets discovered in the United States have been largely the popular and expensive “high-value pharmaceuticals”-cancer drugs, performance-enhancing growth hormones, drugs used to treat AIDS, and Viagra. In other parts of the world, however, anti-malaria drugs, antibiotics, and even common analgesics have become counterfeiting targets.
According to the international police agency Interpol, at least 5% of the world pharmaceutical trade involves counterfeit drugs, and up to 60% of medicines in the developing world may be counterfeit. Not only has this cost the drug industry more than $12 billion annually, but it has also resulted in an untold number of deaths. This vulnerability was illustrated when 109 Nigerian children died after taking counterfeit paracetamol (acetaminophen) syrup.

Although many-if not most-counterfeit drugs are manufactured and distributed in India, China, Brazil, South Africa, and Russia, they are poised to make their way to the U.S. market. That is because they are increasingly turning up at pharmacies in Mexico and other intermediary countries and through difficult-to-trace online pharmacies. As a growing number of Americans attempt to save money by purchasing their medication in Canada, Mexico, and other foreign countries or through the Internet, the number of counterfeit or adulterated drugs making their way into the U.S. market is potentially staggering.

ATL strongly suggests that you protect your brands. In so doing you will be protecting the public. Coach Pat Riley said it best: “There’s no such thing as coulda, shoulda, or woulda. If you shoulda and coulda, you woulda done it.”

What is a Y2K+10 (year 2010) bucket shop? How does a bucket shop affect the manufacturer of legitimate brands? Look at the two photos below, one of a counterfeiter’s equipment (the bucket shop), and one of a counterfeiters press (also a bucket shop). These facilities can be in a basement or garage, and are usually filthy.

If you are a regular visitor of “The President’s Corner”, then you know that counterfeiting has been around since the birth of our nation. Early United States currency had “To Counterfeit Is Death” printed on the notes. This was a serious crime in the years 1759 – 1777 (and beyond). But let me try and get you to think about a new paradigm: “To Counterfeit Is Death – Y2K+10 Version”. The counterfeiters of the new millennium (Y2K) really do kill people. Diluted vaccines, tainted baby formula, prescription drugs with very little (or no) active ingredients at all – these are the lowest of all possible crimes. The counterfeiters seldom see their victims. If they get caught, their fines are minuscule, no more than just a “slap on the wrist”. How do the criminals attack your legitimate products? And more importantly – how do you fight back?

Counterfeiters rip you off by reformulating (dilution or complete fakes) and re-packaging – the replacement of labels with copies. This is huge problem at all levels of the supply chain. Fraudulent labels are used to change the dates of expired product, make false claims or misrepresentations, and inflate pricing. (Pricing can be inflated because a 5 mg dose can be reprinted to claim a 40 mg dose). Quite often these (counterfeited) prescription drugs are administered to very weak cancer or aids patients, and the doctors think the drugs are not working because of the advanced state of the disease. Little do the doctors realize they may be giving their patients diluted or fake medicines. This is why I say “To Counterfeit Is Death”.

Brand Owners Can Fight Back. Tamper Evident Labels (ATL Secur-Lock or Pharma- Void) use substrates that effectively deter re-marking and counterfeiting fraud. This helps prevent a negative economic impact on your brand. The label face stock combines a tamper evident feature with covert authentication. Labels using this substrate are very difficult to remove (they destroy themselves when removed) . . . and can be easily distinguished from a fake.
When combined with ATL’s covert printing, tamper evident substrates can be your cornerstone of a highly protective labeling solution. Tamper evident substrates features include:
- Destructible, paper-based face stock
- Non-reproducible covert security fibers
- Distribution limited to approved secure suppliers

Tamper Evident Substrates Benefits
- Label cannot be removed without visible damage
- Effectively deters re-marking
- Assures product authenticity, or provides or provides simple in-field authentication
- Secure chain of custody
- Covert Authentication
- Tamper Evidence

Twelve Elements Of A secure Supply Chain/ Cold-Chain. Quality Management of the distribution channel begins and ends with the brand owner. Below is the first slide of a presentation I recently made to “Cold Chain Distribution Professionals” at the Philadelphia Convention Center.

I recommended a 12 step approach to strengthen their cold-chains (the logistical system of safely delivering their products). My advice to them is detailed in “The President’s Corner” published October 4th, 2008.
If you would like to discuss your anti-counterfeiting needs, please contact ATL for a no obligation conversation” about your supply chain. We feel that we have solid experience in anti-counterfeiting. I’ll say this over and over – our main focus is not that you buy something from ATL, rather that you learn from knowledgeable people about the perils of counterfeiting.

I will end this segment with the following words of wisdom: “Believe it is possible to solve your problem. Tremendous things happen to the believer. So believe the answer will come. It will.” — Norman Vincent Peale

Criminals around the world have found that they can maximize gain with relatively little capital outlay through product fraud. It could be pharmaceuticals, baby formula, toothpaste, brake pads, or toys. The more fraud that we allow to take place, the more patients will be put at risk for counterfeit medicines, or, the more chance that your children (or grand-children) will have toxic lead paint on their toys. The problem goes beyond violation of intellectual property rights. Counterfeiting is not a victimless crime. People die each day from unsafe counterfeited items. The problem is as old as mankind.

Early currency was plainly labeled “To Counterfeit Is Death”. The example below is a 4 Pound Note issued by Pennsylvania in 1777.

The theory behind such harsh punishments was that one who had the skills to counterfeit currency was considered a threat to the safety of the state, and had to be eliminated. Far more fortunate was an earlier practitioner of the same art, active in the time of the Emperor Justinian (527 A.D., mosaic shown below), who got the nickname “Alexander The Barber”. Rather than executing the counterfeiter when he was caught, the Emperor decided to employ his financial talents in the government’s own service.

Modern U.S. Currency has changed many times over the past few years:

With the exception of the one-dollar bill (above), all of these notes are obsolete. This is because the United States Government “Mixes & Rotates” (M&R) its overt and covert techniques to stay one step ahead of the counterfeiters. Shown below are examples of anti-counterfeiting “layered levels” of the “ever-changing” “face” of U.S. notes. You will notice the different colors when compared to the notes that are now obsolete:

Overt and Covert M&R (Mix And Rotate) anti-counterfeiting measures include fine detail with raised intaglio printing on bills. This allows non-experts to easily spot forgeries. As a side note, on coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, this does not detect sweating, or shaking coins in a bag and collecting the resulting dust. Since this technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold.

For paper bills, in the late twentieth century advances in computer and photocopy technology made it possible for people without sophisticated training to easily copy currency. To combat this, national engraving bureaus began to include new (more sophisticated) anti-counterfeiting systems such as holograms, multi-colored bills, embedded devices such as strips, microprinting, and inks whose colors change depending on the angle of the light. New technology also includes the use of design features such as the “Eurion Constellation” which disables modern photocopiers.

This is very similar in concept to the “Canada Green” overprint on the U.S. 1862 note (used almost 150 years ago). The tint made it very difficult to photograph (complete story and photo are in the President’s Corner dated October 6th, 2008).

To protect your intellectual property, ATL recommends that you educate yourself about overt and covert anti-counterfeiting (anti-piracy) technologies. We also recommend that you take a long look in the mirror. You, as a brand owner, have the power to do the right things. You have the power to protect the public against diversion, dillution, and counterfeiting. By taking these extra steps you will find out something very surprising in the journey – you, in all likelihood, will be saving money in the process.

Bill Cosby said it best: “A word to the wise ain’t necessary – it’s the stupid ones that need the advice.”

THE $1 LEGAL TENDER NOTE OF 1862

The face of the 1862 Legal Tender Note has the portrait of Salmon Portland Chase (1808-1873), secretary of the Treasury under Lincoln. Anti-counterfeiting features included two printers, the American and National Note Companies. The very distinctive signature on the front was that of F.E. Spinner. This dollar featured a patented “Canada Green” overprint controlled by ABNCo. (American Bank Note Company). The tint made the bill almost impossible to photograph, because the image would come out too dark.

This was in sharp contrast to CSA (Confederate States of America) currency. The CSA currency was usually plain, and could easily be counterfeited. To combat this, the CSA tried to “enhance” their bills by adding fine artwork.

Between the two notes shown, it would be harder to counterfeit the first note (above) (entitled “Navigation Seated”, year 1861), because the art design was more detailed than the second CSA note shown (below) (entitled “Columbia Capitol”, year 1862). The CSA notes were commonly hand signed and serialized when they were issued. This reduced the chances of fraud.

Article Break – Todays Donfucius quote of the day: “If a pig loses its voice, is it disgruntled?”

2009 – New Year, New President, New Packaging?
(Article courtesy Pharmaceutical & Medical Packaging News)

President-elect Barack Obama will expect manufacturers to take immediate action to protect the drug supply chain, or else face regulation. This prediction comes from two members of the Partnership for Safe Medicine’s board of directors, Marvin D. Shepherd, Ph.D., and Bryan A. Liang, M.D., Ph.D., J.D. Shepherd is president, Partnership for Safe Medicines, as well as director, Center for Pharmacoeconomic Studies, College of Pharmacy, University of Texas-Austin. Liang is vice president, Partnership for Safe Medicines. He is also executive director, Institute of Health Law Studies, California Western School of Law; and co-director, San Diego Center for Patient Safety at the University of California, San Diego School of Medicine. The Partnership for Safe Medicines is a coalition of more than 50 organizations and individuals dedicated to protecting consumers from counterfeit medicines.

“As president, Obama won’t have the patience that President Bush had waiting for industry,” explains Liang. “The onus will be on industry, and the message will be, ‘If you don’t do it, we will make you do it.’ ”

Shepherd believes that Obama will see to it that FDA mandates both serialization and authentication. “A layered approach will be favored, and companies will get to choose what technologies are employed. But the number of layers to be used may be dictated.”

Photo Above: New laws may prevent consumers from buying “fake” drugs. A layered approach (multiple anti-counterfeiting levels) protects the public and is an excellent loss prevention tool.

Efforts to increase supply-chain safety could go further than Obama and vice-president-elect Joe Biden had originally foreseen. On the Obama-Biden Web site, www.change.gov, the team suggests that “allowing the importation of safe medicines from other developed countries” is one way the United States can reduce healthcare costs. However, Obama is reevaluating his long-standing support of drug importation programs in light of tainted medicines and other goods made in other countries, according to the Partnership for Safe Medicines. “People may be backing away from reimportation after safety concerns arose from China,” says Liang. “Expect to see a greater regulatory role, similar to what Obama is supporting in the Food Safety Bill.”

Shepherd expects that unit-of-use packaging will be favored for safety reasons. The ideal scenario would be “a bottle or blister package from the manufacturer with 30- or 60-day supplies and security devices for the pharmacist and for the patient each to use. The security code could be linked somehow with the product’s expiration date. If pharmacists aren’t counting pills, they will have time to verify each package.”

Such changes demand collaboration among manufacturers and their packaging partners, distributors, and pharmacists, says Shepherd. “We need a coordinated, voluntary effort. Without it, the government will step in with dictates.”

Increase in Drug Tampering Reports & Loss Prevention Spark New Security Considerations

Photo Above: Your profits and consumer loyalty can explode and literally “go up in smoke”, just as these defective (fake OEM) batteries did. Take simple steps in loss prevention through security packaging.

Efforts to identify and intercept phony medications are taking on a greater urgency amid increased concerns that tampering and counterfeiting may become an attractive vehicle for organized crime rings and even terrorists. Very few companies treat these events as viable loss prevention opportunities.

The profitability of expensive new drugs used to combat cancer and other diseases along with the growth of Internet and cross-border purchasing has raised the potential for exploitation motivated by greed.
Over the last decade there’s been a huge increase of tampering with or copying high value drugs that were largely injectables; now the trend seems to be more in changing labels-buying low potency materials then affixing high potency labels.

For example, vials of the anti-anemia drug Epogen were discovered with phony lot numbers. After analyzing the contents, the drug’s manufacturer sent letters alerting pharmacists and distributors that the vials each contained 2,000 units of the drug-far less than the 40,000 claimed on the labels.

A month later, manufacturer Ortho Biotech Products issued a warning to health care professionals that counterfeit lot numbers of their anti-anemia drug Procrit had been uncovered in Texas. In the process of the Epogen investigation, the Procrit vials were also found to contain concentrations of the active ingredient 20 times lower than the amount listed on the labels. How does this affect you, the consumer? How does this affect you, the brand owner? Simple: as a consumer, any fake drug can kill you. As a brand owner, lawsuits can cripple your company, and loss of public faith in your product could be devastating.

Photo Above: Security Label. Where is the covert feature? In the ink? In the adhesive? In the varnish? Just on page three? As a brand owner, only you will know, and this can be changed from production run to production run.

Consider the following loss prevention steps.

Secure your packaging against counterfeiting, tampering, fraud and diversion. This requires collaboration with someone who has the expertise and resources to provide a solution that is tailored specifically for your brand. ATL is one of the most respected security solutions providers. We offer a wide variety of technology, and we have the engineering capability to design, manufacture, and implement a security packaging solution that makes sense for you.

Photo Above: Security Labels can be “tracked and traced” all over the world, in a matter of seconds. This is a very valuable attribute for inventory controls and loss prevention.

Our printing, holographic, and overt/ covert layering production experience allows ATL to customize a security solution that can incorporate a combination of security layers such as holography, forensic digital codes, micro text, serialization, bar-coding (including 2D), track and trace, and tamper evident materials. We can combine these techniques to develop an effective security packaging solution that can work in combination with each other, or as a rotated defense (different features with varried production runs).

Photo Above: Jim Stiglich and Jeff Lord (ATL Security Label Specialists) travel the globe educating consumers and brand owners alike in anti-counterfeiting loss prevention.

Many of these solutions add a decorative dimension to your package – adding brand authentication and brand protection to your design. These same solutions reaffirm to your customers that you care about their safety and well being. And here is the kicker….

Loss Prevention. As a brand owner you can solicit your insurance company to reduce your rates. You can prove to them that you have the necessary security features that will aid law enforcement agents in the field. You will also have the evidence in place that will stand up in court. At pennies per unit, isn’t preventing a loss worth your time and effort?

Photo Above: Donald Dobert, President, ATL, speaks at the Pennsylvania Convention Center (Cold Chain Conference). The subject was anti-counterfeiting and loss prevention. Other speakers included Phil Viggani (ID Global Corp.), Nathaniel Lipkus (Gilbert’s LLP, Lawyers, Patent & Trademark Agents), and Craig Thurber (United States Department of Homeland Security).

Earl Nightingale said it best: “As Ye Sow, Ye Shall Reap…..”
“We will receive not what we idly wish for but what we justly earn. Our rewards will always be in exact proportion to our service.”

Defeating the counterfeiters is almost as good as winning the World Series. It’s a matter of your hard work paying off.

ATL’s Twelve (Cold-Chain) Anti-Counterfeiting (Loss Prevention) Tips
- Reprinted By Popular Demand From October 4th, 2008

Recently, in Philadelphia, I spoke to pharmaceutical and bio-technology companies (the makers of life saving vaccines). I recommended a 12 step approach to strengthen their cold-chain (the logistical system of safely delivering their products). My advice to them was that they understand the following:
1. Cold chain system weaknesses;
2. Quality System Management of the cold chain;
3. Risk Management Tools (including FMEA – Failure Modes & Effects Analysis);
4. Cold chain variation (Mean & Standard Deviation);
5. The “68-95-99.7 Rule” (and the law of large numbers);
6. Out of specification “assignable causes”;
7. Packaging and equipment validation (including IQ-OQ-PQ);
8. The risks of measurement error (Repeatability & Reproducibility);
9. Layering of anti-counterfeiting techniques;
10. How counterfeiters attack, their use of bucket shops;
11. M&R (mix and rotate) overt and covert anti-counterfeiting measures;
12. Forensic Codes (invisible, digital, and non-degradable) for “fail-safe” authentication.

Why not contact ATL for a free “honest to goodness, no obligation conversation” about your supply chain? We feel that we have solid experience in anti-counterfeiting. Our main focus is not that you buy something from ATL, rather that you learn from knowledgeable people about the perils of counterfeiting. We consider it our mission to help you protect the public. We would like to consider it your mission to take a leadership role and do the right thing.

Penn State football coach, Joe Paterno, said it best:
“Success without honor is an unseasoned dish; it will satisfy your hunger, but it won’t taste good.”

Donald J. Dobert – President, ATL

Recently, in Philadelphia, I spoke to pharmaceutical and bio-technology companies (the makers of life saving vaccines). I recommended a 12 step approach to strengthen their cold-chain (the logistical system of safely delivering their products). My advice to them was that they understand the following:
1. Cold chain system weaknesses;
2. Quality System Management of the cold chain;
3. Risk Management Tools (including FMEA – Failure Modes & Effects Analysis);
4. Cold chain variation (Mean & Standard Deviation);
5. The “68-95-99.7 Rule” (and the law of large numbers);
6. Out of specification “assignable causes”;
7. Packaging and equipment validation (including IQ-OQ-PQ);
8. The risks of measurement error (Repeatability & Reproducibility);
9. Layering of anti-counterfeiting techniques;
10. How counterfeiters attack, their use of bucket shops;
11. M&R (mix and rotate) overt and covert anti-counterfeiting measures;
12. Forensic Codes (invisible, digital, and non-degradable) for “fail-safe” authentication.

Why not contact ATL for a free “honest to goodness, no obligation conversation” about your supply chain? We feel that we have solid experience in anti-counterfeiting. Our main focus is not that you buy something from ATL, rather that you learn from knowledgeable people about the perils of counterfeiting. We consider it our mission to help you protect the public. We would like to consider it your mission to take a leadership role and do the right thing.

Penn State football coach, Joe Paterno, said it best:
“Success without honor is an unseasoned dish; it will satisfy your hunger, but it won’t taste good.”

Donald J. Dobert – President, ATL