The document summarizes key points from a presentation by Daniel Bennett, CEO of Yellow Brand Protection, on anti-counterfeiting efforts in the pharmaceutical industry. It discusses the growth of the global pharmaceutical market and issues around counterfeit and substandard drugs. It also examines the evolution of online pharmaceutical sales channels like webstores, social media, and online marketplaces, noting challenges in regulating these channels, especially in China as it lifts its ban on online drug sales.

1. ANTI-COUNTERFEITING PHARMA 2015
11-12 March 2015
DANIEL BENNETT
CEO – YELLOW BRAND PROTECTION

2. ABOUT YELLOW BRAND PROTECTION
• Detection and eradication of online counterfeiting and brand abuse.
• Online investigation, evidence collection, online enforcement..
• Swedish company, with presence in the UK, Africa and China.
• All key online channels: webstores, social media, mobile apps, and 650+ online market places world-wide
• Global ‘hot spot’ focus – language skills: Mandarin, Russian, Arabic, Spanish and Brazilian Portuguese.
• Particular strength in China - strong local partnerships with site owners, ISP’s and others.
• Consistent enforcement rate - e.g. AliBaba, Taobao, Facebook - at least 95%. We Stop at Zero.
2

3. BACKGROUND

4. 4
STATISTICS ON PHARMA
The global
pharmaceutical
market is expected to
reach sales of nearly
$1.1 trillion in 2015
The NA market is
responsible for 41%
of the global spend
40% of global growth
in the industry comes
from China
China and India
control about 80%
of the worlds drug
manufacturing
Generic drugs share
of pharmaceutical
spending will rise to
39% in 2015, up from
20% in 2005

5. 5
COUNTERFEIT
The definition of “counterfeit” has, over the years, been questioned in the pharmaceutical industry.

6. 6
SSFFC DRUGS
• Counterfeit drugs may be contaminated,
contain improper ingredients, incorrect ratios of
the proper ingredients or contain no active
ingredients at all
• Different regulations for manufacturing and sale
of drugs in different countries
• China and India – 70-80% of world’s drugs,
also major hotspots for counterfeiting.
substandard/spurious/falsely-labelled/falsified/counterfeit

7. PHARMA ONLINE

8. • Pharmacies began to appear during the Middle Ages
• In the 1870s, prescription medications were being
sold via mail order
• 120 years later the first internet-based pharmacy
launched in UK
• By the end of 1999 – 400 websites were selling
medications
8
PHARMA ONLINE
Evolution of sales channels
Traditional
pharmacy
Postal
order
Internet

9. • The Internet has radically changed the approach
towards commerce – modifying buyers’ attitudes
• Cheap prices, anonymity, practical convenience
and a wider range of products
• Estimates as high as 700,000 deaths globally each
year are caused by fake drugs (see link)
9
PHARMA ONLINE
People will always want a good bargain – but are they willing to pay the price?
http://www.un.org/africarenewal/magazine/may-2013/counterfeit-drugs-raise-africa%E2%80%99s-temperature#sthash.Kfsh9NXT.dpuf

10. 10
PHARMA ONLINE
Canada
• It is common to state that pharmacies online are
Canadian due to the lower prices in Canada
• Only 1 out of 10 sites claiming to be Canadian was
actually Canadian
• Canada Pharmacy Med Online - Russian registrar,
IP address Czech Republic
- Fast and reliable shipping
- Quality medications
- No prescription required
- Affordable prices

11. • 111 countries participating in INTERPOL’s Pangea
sting operation
• 11,000 illegal online pharmacies being shut down
• The removal of 19,000 ads for fake drugs on social
media sites
• The seizure of 9.4 million doses of phony
medicines
• Great result, but much more work is needed..
Potentially millions of illicit online market place
listings..
11
PHARMA ONLINE
Action! Operation Pangea

12. ONLINE SALES CHANNELS

13. 13
Where it all started
SALES CHANNELS – WEBSTORES
• 1999 – the first UK pharmacy (webstore) on the
internet launches
• Historically the most common sales channel online
• Large volume of sales – but other sales channels
are potentially larger threat

14. 14
• The trend
• Infringers harder to catch
• Immature market
• Exploding with sales
SALES CHANNELS – SOCIAL MEDIA
On the rise

15. 15
• This is the source of stock for many webstore
owners
• B2B and B2C
• Predicted to become one of the major beneficiaries
of the amendment on prescription drugs online
• Have long been able to act undisturbed due to the
great focus on webstores
SALES CHANNELS – ONLINE MARKETPLACES
Ever growing..

16. 16
• Online marketplaces officially state that they have a
policy against prescription drugs
• A zero result is common when searching the sites.
• Other search techniques uncovered 800 results that
were ‘hiding’.
SALES CHANNELS – ONLINE MARKETPLACES
Banned or not banned?

17. PHARMA IN CHINA

18. 18
PHARMA ONLINE – THE CHINESE MARKET
China’s lifting of online drug ban – gaining online retailers
Yesterday
• Online pharmacies
restricted to selling
only over counter
medicines. Hospitals
account for 70 % of
precsription drugs.
Today
• China’s drug
regulator lifts a long-
term ban on
companies selling
prescription drugs
online.
Tomorrow
• No one knows for
sure. Estimated to
open up a whole new
market worth over 1
trillion yuan ($161
billion). Online only.
http://www.reuters.com/article/2015/01/09/us-china-pharmaceuticals-idUSKBN0KI0Y220150109

19. 19
PHARMA IN CHINA
Chinese chemicals – on the rise in the pharmaceutical industry
• Pharmaceutical ingredients exported from China
are often made by chemical companies, neither
certified nor inspected by Chinese drug regulators.
• About 70 to 80 percent of all active drug ingredients
originate in China and India
• Substandard formulations often end up in
pharmacies in developing countries and for sale on
the Internet, where western buyers are turning for
cheap medicine.
http://www.nytimes.com/2007/10/31/world/asia/31chemical.html?pagewanted=1&_r=3&

20. EXAMPLES

21. 21
• Hundreds of ads on the leading
marketplaces
• Free sample
• Supply ability; 10,000
kilograms/month
• Location; Shanghai
• Claim to be certified by the
FDA
Treatment of cancer, autoimmune diseases and medical abortions etc.
METHOTREXATE

22. 22
• 95 ads on Alibaba
• MOQ; 1 Kilogram
• Supply ability; 1 Metric Ton
• Location; Guangzhou
• Claim to be certified
Anorectic drug withdrawn from the market due to potentially serious side effects
.
RIMONABANT

23. 23
• An ad for empty bottles. “it is a
bottle especially for Viagra”
• Company name; Dongfang
Pharmaceutical Co. Ltd
• Have their own website
• ”Our products include raw
materials, preparations,
Chinese traditional drug, Health
products, chemical agents,
medical appliances etc”
Empty Viagra bottles..
PACKAGING FOR SALE

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DANIEL BENNETT
DANIEL@YELLOWBP.COM
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