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Donfucius Says: April 23rd, 2014. Random Bits Of Wisdom.

  1. “As a child my family’s menu consisted of two choices: take it or leave it!” — Buddy Hackett
  2. “Nature gave men two ends – one to sit on and one to think with. Ever since then man’s success or failure has been dependent on the one he used most.”Donfucius
  3. Preach the Gospel at all times, and when necessary use words.” — Aaron Rogers Quoting Francis of Assisi
  4. “Diplomacy is the art of saying “Nice doggie” until you find a rock.” — Will Rogers
  5. “Before they invented drawing boards, what did they go back to?” –Patti Molloy
  6. “The way we’re going… if I called up another pitcher, he’d just hang up the phone on me.” — Any Brewers Manager
  7. “When someone is impatient and says I haven’t got all day,” I always wonder, “How can that be? How can you not have all day?” — George Carlin
  8. “We’re fools whether we dance or not, so we might as well dance.” — Old & Wise Japanese Proverb
  9. “Blessed are the cracked – for they are the ones who let in the light.” — Donfucius
  10. “Good judgment comes from experience, and a lot of that comes from bad judgment.” — Will Rogers
  11. “I don’t mind how much my Ministers talk, so long as they do what I say.” — Margaret Thatcher

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Posts Tagged ‘counterfeit’



Operation Spring Cleaning. Anti-Counterfeiting Stings From Around The Country.

April 28th, 2010

Samples of News Clips from April Counterfeit Goods Sweep “Operation Spring Cleaning”.

COUNTERFEIT PRODUCTS WORTH $263 MILLION SEIZED IN TWO MAJOR INVESTIGATIONS. The Washington Post (4/27/2010) reports on the announcement Monday of the seizure of “$263 million worth of counterfeit products — much of it smuggled through Baltimore — following two long-term investigations. The National Intellectual Property Rights Coordinator Center, a partnership among several government agencies, spearheaded the so-called Operation Spring Cleaning, which resulted in more than $44 million in seizures of fake products, including DVDs, circuit breakers, luxury goods and medications, from ports across the country over the past three weeks. In addition, 45 people were arrested on federal and state counterfeiting charges as part of the operation. Immigration and Customs Enforcement officials also seized $219 million in counterfeit merchandise made in Asia and shipped through Baltimore this month as part of a separate investigation over several months.”

U.S. Seizes Big Batches of Fake Goods. Wall Street Journal (4/26/2010) notes U.S. law enforcement “made their biggest-ever seizures of counterfeit goods this month in two operations that netted more than $240 million in total as part of a broader federal offensive against the trafficking of pirated products. Federal, state and local law enforcement officials, part of the National Intellectual Property Rights Coordination Center, confiscated about $40 million worth of counterfeit goods, including fake Rolex watches, Coach handbags, and Nike shoes, as well as pirated DVDs and fake pharmaceutical products, in a sweep of more than 30 U.S. cities. And as part of a separate, long-running investigation, federal officials confiscated $200 million in fake goods made in Asia and smuggled through the port of Baltimore. “Intellectual property theft steals a whole lot. It steals jobs, creativity, it funds organized crime, and it’s a serious risk to public safety,” said John Morton, assistant secretary for U.S. Immigration and Customs Enforcement, or ICE, at the Department of Homeland Security.”

Pirated DVD Salesmen Busted. The McAllen (TX) Monitor (4/27/2010) reports, “Three pirated DVD salesman arrested at a Starr County flea market are among 45 people netted in a nationwide dragnet against counterfeiting operations, US Immigration and Customs Enforcement announced Monday. Agents detained Mauro Bazan Jr., Esteban Trevino Ramirez and Rodolfo Sanchez Vela on April 17 after finding them in possession of nearly 6,700 forged DVDs. Legitimate DVDs would be worth an estimated $127,000.” The men were arrested “as part of the nationwide ‘Operation Spring Cleaning’ which resulted in the seizure of $263 million in fake merchandise in cities such as San Antonio, Houston, Dallas, Seattle, New York, Miami and Detroit.”

Fake Rolexes Bulldozed In Philadelphia. The Philadelphia Daily News (4/27/2010) reports on the bulldozing on 7,000 counterfeit Rolex watches marking “the grand finale of an international multimillion-dollar federal counterfeiting case some 20 years in the making – unveiled on World Intellectual Property Rights Day.” Counterfeit Rolex manufacturer Binh Cam Tran “started as a legitimate watchmaker on Jewelers Row on Sansom Street near 7th, then got into the counterfeit world, said John Kelleghan, special agent in charge of the Office of Investigations for US Immigration and Customs Enforcement here. He ended up manufacturing the watches in his North Philadelphia rowhouse and kept moving to better quarters – ending up in Elkins Park, where he owned a fleet of Lexus cars.” WCAU-TV Philadelphia (4/27) and KYW-AM Philadelphia (4/27, Glovas) cover the bulldozing on their websites. WCAU-TV Philadelphia (4/26) aired a report on the bulldozing, as did WTXF-TV (4/26/2010).

KRGV-TV Rio Grande Valley (4/27/2010) reports approximately “$1.1 million of counterfeit merchandise was seized from two locations in the South Texas area in April. It was part of a nationwide seizure announced by the federal partners of the National Intellectual Property Rights Coordination Center (IPR Center). In total, more than $263 million worth of counterfeit merchandise was seized around the country.” DHS Assistant Secretary for ICE John Morton “revealed these results at an observance of World Intellectual Property Day at the IPR Center in Arlington, Virginia.” KABB-TV San Antonio (4/26/2010) also aired a report on the results of Spring Cleaning.

Counterfeit Nikes Seized In New Jersey. The AP (4/27/2010) reports ICE officials announced the seizure of “15,000 pairs of fake Nike shoes at Port Elizabeth as part of a nationwide sweep of counterfeit products. … They say more than 700,000 fake items were found in 30 cities during Operation Spring Cleaning. The counterfeit goods included medicines. … ICE spokesman Harold Ort said the Nike sneakers found in two shipping containers in New Jersey were worth $1 million.”

7 Mile Fair Seizures Noted. WITI-TV Milwaukee (4/26/2010) aired a report on ICE’s bust of counterfeit goods at 7 Mile Fair as part of Spring Cleaning.

Recent Counterfeiters And Their Illicit Deeds – Leonardo DiCaprio In “Catch Me If You Can!”

January 24th, 2010

I am amazed when people look at a problem and choose to do nothing. It is very similar to talking about the heavens and stars. Why is it that when you tell a person that there are 400 billion stars in the sky – he will believe you? But tell this same person a bench is wet and he will have to touch it. The same holds true for counterfeiting. Most people know it’s a big problem, yet most people stay in denial, hoping the problem will not affect them (when in reality it already has). To help give you a perspective on the huge scope of the counterfeiting problem, I have chosen to tell you five stories about counterfeiters:

Counterfeiting History – Part 1: Frank William Abagnale Jr worked under 8 identities during the 1960s, including his first as Pan American Airlines Pilot Frank Williams. In 5 years, he passed over $2.5 million in counterfeit checks. This fraud was in 26 countries and all 50 states. He was arrested in France at an Air France ticket counter when an agent recognized his face from a wanted poster. In the movie based on his life, “Catch Me if You Can”, the real Abagnale made a cameo appearance as a French policeman (photo above). Leonardo DiCaprio and Tom Hanks were the stars.

Counterfeiting History – Part 2: Anatasios Arnaouti is a criminal from Manchester who led one of the most ambitious forgery operations in history. He and his accomplices were jailed in 2005. The total amount of counterfeit money they printed is unknown as their forgery operation had been in production for several years, and was capable of producing tens of thousands of counterfeit notes each day. The extent of the crime was considered so severe that it could have driven the United States and UK economies into panic.

Counterfeiting History – Part 3: In 2004, French police seized fake 10 euro and 20 euro counterfeit bank notes worth a total of around 1.8 million (pounds) from two laboratories and estimated that 145,000 counterfeit notes had already entered circulation.

Counterfeiting History – Part 4: In 2006, a Pakistani government printing press in the city of Quetta was accused of mass producing huge quantities of counterfeit Indian bank notes. The “Times of India” reported this scandal, based on Central Bureau of Intelligence investigation. The money was allegedly used to fund terrorist activities inside India. It is believed that bombings in Mumbai were funded using this fake currency.

Counterfeiting History – Part 5: Today the (hardest to detect) counterfeit notes are claimed to be US dollar bills produced in North Korea, called “Super Dollars” because of their high quality. The US government believes they have been circulating since the late 1980s and that they serve two purposes: as a source of income and to undermine the US economy. The United States has taken steps to “Mix & Rotate” the production of dollars. For more details, please reference “The President’s Corner” from October 7th, 2008.

How To Fight Back
Detecting counterfeit bills often isn’t easy by eye. A bogus $100 bill (believed to have been made in North Korea), would be nearly impossible for a novice to identify as a fake. The paper it is printed on contains no starch and doesn’t reflect ultraviolet light, which is one sign of a counterfeit. It has the security strip on the left side of the bill and a watermark of Ben Franklin (whose portrait is on the bill) on the right-hand side, as well as replicating other security features.

There is now a scanner that searches for missing covert features in bogus “Super Dollars”. The device looks at several aspects of the bill to confirm its legitimacy. U.S. paper money is printed with magnetic ink, but that’s also used for many fraudulent bills. On real bills the ink is distributed in a consistent pattern whose magnetic resonance can be mapped. The magnetic map is stored in the scanner, as well as three other maps containing ultraviolet, infrared and other measurements taken from legitimate bills. Scanning a bill takes less than one second. If there’s any spike, any anomaly in any of the threads of data, the scanner rejects the dollar.

What I have just described is a “Layered” approach in anti-counterfeiting. You may not be the government fighting “super dollars”, but then again, you are fighting to protect your brand from counterfeiters. The money you save in brand protection and litigation should be considered as “super dollars” to you. In the process (of saving money) you will be protecting the public.

Here How Forensic Authentication Works: (1) A unique digital code, “ATL 12-IDGJ”, is set-up for your brand; (2) Your digital code is incorporated into the label through multiple entry points (Inks, Varnishes, Adhesives) (This is a “mix and rotate” “layered” approach); (4) The digital code is also incorporated into (or linked to) the Pedigree Documentation; (5) If the scanner indicates “ATL 12-IDGJ” then the established digital code allows traceability; (6) This uniqueness cannot be duplicated; (7) Thus it is impossible to counterfeit.

It only takes a second to authenticate your product anywhere in the world (scanner photo above). This is because the invisible, non-degradable forensic digital code is virtually impossible for the counterfeiters to duplicate. This amazing technology is from ID Global, the leader in scientific identification.

Counterfeiters are attacking us on all fronts. Protect yourself and your brand. Benjamin Franklin said it best: “Even a tiny leak can sink a great ship.”

“To Counterfeit Is Death: Y2K+10 Version”. The Bucket Shops. How Counterfeiters Harm The Public.

January 23rd, 2010

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

Faking It. Nothing Phony About Profits In The Knockoff Business.

January 21st, 2010

President’s notes: The IACC (International Anti-Counterfeiting Coalition) is an organization dedicated to fighting counterfeit goods. This article courtesy of Ambrose Clancy, Long Island Business News.

A couple of years ago a building inspector in North Hempstead was checking out a warehouse when he noticed something was wrong with the back gates. As he walked in to inform the owner about the problem, several Asian women bolted past him, piled into a van and sped off.

Faking It

Photo above. Fake goods. Bad quality and very bad for the economy. Why? Counterfeiters do not pay taxes, but you do.

Inside were boxes of Timberland boots. Well, the label said Timberland. Actually they were cheap knockoffs manufactured in China and smuggled into the Port of New York/New Jersey.

“They were moving thousands and thousands of boots out of there,” said Detective Sgt. Thomas Riley of the Nassau County Police Department.

Trademark counterfeiting is ” where a brand name is essentially stolen and slapped on a cheaper and vastly inferior copy”. This is big business. On Long Island, fakes are sold at nearly every flea market, in carwashes, delis, mom-and-pop stores and at kiosks in the malls. They change hands at shopping parties in people’s homes and from the trunks of cars by so-called “bag ladies.” These are not homeless women but crooks hawking what on first glance looks like a Louis Vuitton bag for a quarter of the price, but in reality is a inferior product, doomed to fall apart in six months.

Figures on the size of the counterfeit market are murky. More than $600 billion has been mentioned as the amount of cash generated by worldwide counterfeiting of apparel, luggage, handbags, sunglasses and other designer goods.

But Susan Scafidi, a law professor at Fordham University and an expert in intellectual property law, said all figures are suspect, since counterfeiters don’t file with the Internal Revenue Service.

“The $600 billion is a vague number taken from estimates that something like 7 percent of world trade is counterfeit,” said Scafidi, who also runs the up-to-the minute blog Counterfeit Chic, tracking the fashion industry’s battle against fakes.

Bob Barchiesi, president of the International Anti-Counterfeiting Coalition, had no problem with the $600 billion global figure, adding that the total for the United States is a quarter of a trillion dollars. Formed in 1979, the IACC works with investigators and law firms, lobbies politicians and gets the word out.

“This is a serious problem and not getting any better,” said Barchiesi.

Photo below. Counterfeits are a world wide problem, including fake baby formula. Hong Kong’s two biggest grocery chains removed all milk made by the leading Chinese dairy after traces of a chemical that killed and sickened babies was found in products in mainland China. (AP Photo/Kin Cheung)

Above: Logo Of Product Being Removed From Chinese Stores

Above: Logo Of Product Being Removed From Chinese Stores

The criminal enterprises began in the late 1960s when fashion designers figured out that copyright and patent laws don’t protect designs, Scafidi said. As a response, designers placed visible logos on garments and bags, in part because the logos were copyright protected, even if the designs were not.

But then the counterfeiters moved in, copying those logos in an effort to trick buyers into believing their wares were the real thing.

Fifteen years ago when China became a manufacturing powerhouse, the illegal trade boomed, said Barchiesi, who estimated that 85 percent of trademark counterfeiting comes from China.

The goods are moved in shipping containers, mislabeled from electrical equipment to actual clothing, Riley said. Some clever importers recently moved winter coats with a Chinese label and when the New York contact picked them up, the Chinese labels were peeled off to reveal a North Face logo, he added.

The classic crime success story is very low risk and very high reward. Trademark counterfeiting is all of that, said Barchiesi, adding that the illegal trade is safer and more profitable than importing heroin.

“The low risk is the judicial system doesn’t levy out significant penalties for this type of crime,” he said.

Trademark counterfeiting law in New York has two degrees of felony offense, with a second degree charged if more than $1,000 worth of merchandise is sold, according to Deputy Inspector James Burke, commanding officer of the Suffolk County Police Department’s District Attorney Squad.

“But the real rub is that a first-degree offense is only when $100,000 worth of illegal goods are sold,” Burke said. Stay below $100,000 and if you’re convicted, you can expect one to four years in jail. Cross the line and it’s five to 15.

Another low-risk factor for criminals is diminishing resources in law enforcement, Burke said. There is no trademark counterfeiting squad in any Long Island department. “Violent crime trumps trademark counterfeiting every time,” Burke added.

Law enforcement mainly works with companies, trade associations and private investigators to fight the fakes, he said.

Investigator Andrew Oberfeldt has been ferreting out counterfeiters on Long Island since 1991 for the Manhattan firm Abacus Security & Investigation. He works mainly on tips from jealous competitors.

“Informants are motivated by greed and envy,” Oberfeldt said.

He’s seen fake goods in beauty parlors, gas stations, small clothing and shoe stores. Bag ladies go to Manhattan’s Chinatown twice a month and load up on bogus handbags, he said. “They drive around the Island with stuff in their trunk and sell it where people work,” he added. If they know the receptionist at a doctor’s office, for example, they will drop by and hustle the bags in the waiting room.

It has become so commonplace that many people don’t consider it a crime. Oberfeldt had a friend in the Nassau County Police Department who was approached by a secretary at headquarters offering to sell designer clothes. He said, “Sure, lead the way,” the investigator said. “Out in the parking lot, he took one look at the stuff and locked her up.”

To those who say trademark counterfeiting is a victimless crime, all experts beg to differ. Not only do legitimate businesses suffer, but taxes are never paid on the goods sold. (Estimates on annual unpaid taxes approach $1 billion.)

Buying these goods supports violent criminals. Buying a knockoff pair of designer jeans also supports Third World sweatshops, where children labor for slave wages in appalling conditions.

Going for an illegal bargain can also be physically dangerous, Sgt. Riley said, referring to the brisk trade in fake electronics products.

“Buy a replacement cord for your coffee maker and if it’s counterfeit you’ve got a fire hazard,” he said.

game-boy-exploding

Photo above. Fake goods can hurt you. Here is an exploding counterfeit battery from a hand held video device. Cell phones are also at risk.

Another hazard could be related to knockoff Major League Baseball items. Jerseys and caps for adults and children are often processed with toxic chemicals and contain no flame-resistant elements.

According to MLB spokesman Matt Bourne, in the past five years organized baseball has seized more than four million pieces of counterfeit goods.

On a slow morning last week at the mammoth indoor Attitas Flea market in Sayville, Mets home jerseys were going for $35, more than half off the MLB price.

Genuine MLB merchandise is identified by a hologram attached either to the product or to a hang tag. Some jerseys at Attitas had the hologram, most did not. When someone brought the lack of holograms to the merchant’s attention, he said, “All I know is these are official.”

He then wasn’t interested in continuing the conversation.

zp-005-fake-and-real-hologram

Photo above. Fake and real hologram. Once a counterfeiter targets a product, a fake hologram can be made within 24 hours.

Rip-off artists

A crime related to counterfeiting trademarked goods is music piracy, which is swamping the recorded music industry. The Recording Industry Association of America said pirates cost the music industry $12.5 billion annually and that 71,000 jobs have been lost over the past five years. Thieves have also cost the government $422 million in unpaid taxes.

Although it’s a worldwide problem, there are homegrown illegal manufacturers as well, mostly involved in pirating music with CD “burner factories” set up in office parks on Long Island and funded in some instances by organized crime, said Bob Barchiesi, president of the International Anti-Counterfeiting Coalition.

The music pirates have made the music makers change strategies. Since 2003, music companies sued 35,000 individuals for copying music online. Last December, however, they waved the white flag.

This was a combination of ineffectiveness and disastrous public relations. The practice of suing teenagers and single moms came across as bullying.

Instead, the RIAA asked for help from the Internet service providers to stop music piracy and a preliminary agreement has been reached. When file sharing is discovered, RIAA will inform the provider and the provider will then tell the offending customer to stop. If the customer is unwilling to do so, the provider can then cut off access to the offender.

Til Death Do You Part?

March 12th, 2009

We would like to give you a glimpse of the counterfeit drug issues as they exist today. The simple fact is that your life may be at risk, or the life of someone close to you. As you read of the startling facts, please look for the words “ATL Security Note”. At this juncture we will recommend a solution that will inhibit (or eliminate) the counterfeiters ability to provide you (the public) with fake or diluted medicines.

Photo Above: Illicit drugs that were gathered during a law enforcement raid.

Counterfeit Medications – History

First documented cases of counterfeit medicines date back to 4th century BC. For more than 2,000 years, issue of fraudulent production of medicines has mostly been ignored.
Today it is multi-billion-dollar worldwide trade. Fake drugs are estimated to lead directly to the deaths of more than 500,000 people a year across the globe.

WHO (World Health Organization)

Definition of a Counterfeit Medicine

“A counterfeit medicine is one which is deliberately and fraudulently mislabelled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with correct ingredients, wrong ingredients, without active ingredients, with insufficient quantity of active ingredient or with fake packaging.”

Counterfeit Medications

The illicit business is worth $18 billion. It is estimated that it will double in the next two years. It represents about 10% of all pharmaceutical sales worldwide.
30% of medicines in Russia and some countries in Africa, Asia and Latin America are counterfeit. In wealthy nations this figure is approximately three percent.
In the United States this equates to eight million packs of medicines worth approximately $975 million a year.
Approximately 25% of all emails – 15 billion messages a day – are spam advertising drugs. 50% of medicines offered by websites that conceal their physical addresses are fakes. Counterfeited, diverted, and diluted medications make more illicit money than cocaine and heroin.
In 2005, more than 500,000 single doses of fake medicines were discovered across Europe. In 2006 this number had shot up to 2.5 million. Only because fake drugs have spread from local markets to more global outlets, aided by the rise of the internet, has the world recognized the magnitude of the problem.

Photo Above: This machine is manufacturing fake drugs.

WHO & IMPACT

In February 2006, WHO created first global partnership known as International Medicinal Products Anti-Counterfeiting Taskforce (IMPACT). It is made up of all 193 WHO Member States on voluntary basis. The goal is to improve coordination and harmonization across and between countries so eventually production, trading and selling of fake medicines will cease.

IMPACT focuses on following key areas:
Looks at existing laws in countries.
Provides effective models countries can use.
Develops set of principles for establishment of appropriate legislation and penal sanctions.
Coordinates action at local levels between health authorities, police, customs, and judiciary institutions to ensure proper regulation, control, investigation and prosecution.
Helps countries with weak regulatory systems to strengthen them.
Comprised of five working groups to combat the spread of counterfeits:
- legislative and regulatory infrastructure
- regulatory implementation
- enforcement
- technology
- communication

The United States and Fake Medicines

The US is a lucrative market for counterfeiters of medicines and medical devices. This is because of high prices, a large market, widespread internet connectivity, and complex supply chain. Counterfeits are not normally manufactured in US. They are distributed through online pharmacies, most of which are outside the United States.

50% of medicines sourced from websites that conceal their physical address are counterfeit. These websites advertise and supply medicines illegally, with no prescriptions.
The fake drugs are discovered in the regulated supply chain, through licensed wholesalers, parallel traders, and pharmacies.

Thus, counterfeit medicines reach patients necessitating batch recalls. Fake medicines found in US regulated supply chain are designed to deceive pharmacists and patients into believing that they are genuine. Often only laboratory analysis reveals counterfeit product.

ATL Security Note: the need for lab analysis can be reduced by the use of a mixed and rotated “layered” security approach in labels and packaging. Invisible forensic digital markers can authenticate the product as genuine from virtually anywhere in the world.

Counterfeit medicines discovered in US typically contain reduced amount of active
pharmaceutical ingredient, or wrong ingredient, or no ingredient.

All counterfeit medicines are dangerous.

There are also reports of counterfeit medical devices discovered in US, or seized on their way to US.
Drug counterfeiting occurs less frequently in the US due to strict regulatory framework that governs production of drug products and distribution chain, and enforcement against violators.
The FDA works to ensure overall quality of drug products that consumers purchase from US pharmacies remains high.
The FDA advises pharmacists, physicians, and other healthcare professionals on drugs most likely to be counterfeited and how to identify them.

A suspect patient may have received counterfeit drug if:
He has unexplained worsening of medical condition or unexpected side effect.
He reports drug tastes or looks different, tablets chipped or cracked.
He experiences unusual burning at injection site.

Photo Above: Are you willing to keep taking drugs that are not authenticated as genuine? Will you do this until “death do you part?”

The Internet

Online pharmacies offer benefits of convenience, privacy, and (often) cheaper prices.
Many online pharmacies appear reputable and similar to legitimate retail pharmacy websites BUT sell fake pills that:
- do not contain medicine approved by regulators.
- have doses that are too strong or too weak.
- contain dangerous ingredients.
- aren’t manufactured using safe standards.
- aren’t labelled, packaged or shipped properly.
- are out of date.

Online pharmacies flourish because the public cannot get many new medicines for cancer, dementia, or influenza from publicly funded services. Many sites connected to other sites and have multiple links making investigation difficult. There are jurisdictional challenges as regulatory and enforcement issues cross international lines. The system is difficult to regulate – but governments can do more to warn public of the dangers.

India

India accounts for approximately one-third of counterfeit (fake, diverted, or diluted) drugs.
The EC claims India largest source of 2.7 million counterfeit drugs was seized by its customs in 2006.
India is the number one source of counterfeit medicines, followed by UAE and China.
India’s existing regulations pose little deterrence to unscrupulous drug vendors.

India is to introduce the death penalty for sale and manufacture of fake and counterfeit medicines that cause grievous harm. The minimum prison sentence is to be increased from five to ten years. There will be higher fines for those convicted for trading in fake drugs.

Drug regulatory officials are often in collusion with manufacturers of fake medicines.
It is against the law to sell fake drugs for domestic use, but no regulatory requirements apply to India’s export market.
Common fake drugs are antibiotics, drugs for tuberculosis, malaria, and cough syrups, as well as ingredients for lifestyle drugs.
Exportation of Active Pharmaceutical Ingredient (API) plays integral role in the manufacture of counterfeit medicines.

ATL Security Note: the use of a mixed and rotated “layered” security approach in labels and packaging works just the same when protecting the public for the purity of API (Active Pharmaceutical Ingredients). Invisible forensic digital markers, color-shifting inks, and other covert features can protect the public by ensuring the API are genuine. This is commonly known as maintaining the “pedigree”.

During first six months in 2005, more than 250kg of sildenafil citrate, Viagra’s active ingredient, were exported from India to Europe. Out of one kilogram sildenafil citrate, approximately 14,000 tablets of counterfeit Viagra-pills can be produced. If sold at normal market price of genuine Viagra a profit of up to 2,000% could result.

Photo Above: Real and fake drugs, side by side. Which would you take?

China

In China, between 200,000 and 300,000 people are estimated to die each year because of counterfeit or substandard medicines. The current baby formula incidents are a sad reminder of the human pain and suffering.

China has 80,000 chemical companies, and the FDA does not know how many sell ingredients used in drugs consumed by Americans. China exports “drug ingredients” to customers in 150 countries.

China’s State Food and Drug Administration is not responsible for regulating pharmaceutical ingredients manufactured and exported by chemical companies.
Corruption and lack of protection for whistleblowers undermines China’s attempt to establish a more rigorous drug regulatory system.

In 2007, a series of scandals involving counterfeit pharmaceutical exports led to intense international pressure on the Chinese government. This resulted in conviction and subsequent sentencing to death of the country’s two top drug regulators for accepting bribes.
Some counterfeiters have the same equipment used by pharmaceutical companies.
Cases have occurred of pharmaceutical laboratories that manufacture genuine drugs during business hours and produce counterfeits at night.
Counterfeiters have set up companies that provide service of disposing of expired medicines, thus they obtain real expired medicines that they repack and re-label.

ATL Security Note. Repackaging and relabeling (as described above) could be detected if an invisible forensic code was used in security packaging for the pharmaceuticals. If this covert technique was used, the break in the pedigree could be discovered before the consumer is harmed.

Photo Above: Fake hologram (left), and genuine hologram (right).

ATL Security Note. The following is a portion of the FDA’s conclusions from 2006: “The FDA’s vision of a safe and secure prescription drug supply chain is based on transparency and accountability by all persons who handle the prescription drug throughout the supply chain. With the implementation of the pedigree regulations in December 2006, the FDA expects that supply chain stakeholders will move quickly to adopt electronic track and trace technology, implementing RFID or an alternative track and trace technology in a phased-in approach. Although there are important issues that still need resolution, these issues should not hinder the forward progress and momentum toward widespread adoption. In the meantime, the FDA believes that public health would be better protected if all stakeholders work cooperatively to enable all distributors to pass pedigrees.”

The 2006 Report also considered several technical issues related to adoption of electronic track and trace technology that were perceived as obstacles to implementation and are in need of resolution. These include:
Mass serialization and unique identification of each drug package; and Universal pedigree with national uniform information.

As a brand owner ATL believes that you can protect the public by maintaining a record containing information regarding each transaction that results in a change of ownership of a given drug or pharmaceutical ingredient. This includes its sale by the manufacturer, through the wholesalers, distributors, and pharmacies.
As a brand owner, ATL can work with you to develop:

Lot or batch codes;
Integrated Mass Serialization;
2D DataMatrix Codes;
Forensic (invisible, non-degradable, nano-molecular markers);
Many other covert techniques.

In the 1950′s, when W. Edwards Deming tried to teach U.S. Manufactures about statistical quality control, he was not listened to. At the time, the stigmas of the past (as well as arrogance and ignorance) lived within the powerful decision makers in this country. Dr. Deming went on to huge success in Japan. He believed in quality before it was a buzzword.

“We are here to make another world.” W. Edwards Deming

Photo Above: W. Edwards Deming.

I believe that U.S. pharmaceutical manufacturers (and other brand owners) must protect the public from harm by providing safety and security for the genuine purity of their products. The citizens of the world must demand this.

“We must not inhibit our forward thinking by the comfort levels of the past. If something is not working, you must fix it, repair it, or invent a new paradigm. If you don’t, how many people are you willing to harm for the sake of a few dollars?” Donald J. Dobert, President, ATL.