According to the World Health Organization (WHO), a considerable proportion of the medicines in developing countries are illegal, counterfeit or substandard. In industrialized nations, however, such products are also becoming increasingly available on the market through unlicensed Internet pharmacies and dubious online platforms, posing a risk to public health. Moreover, chemical products can also be used for illegal purposes such as the manufacture of illicit drugs.
Our approach to product-related crime
Our company develops and manufactures products of the highest quality. In order to protect both customers and patients, we secure our products against counterfeiting and are resolutely committed to fighting product-related crime by, for instance, collaborating with health, regulatory and law enforcement agencies at the regional, national and international level. In taking preventive action, we cooperate with industry representatives, Interpol and the World Customs Organization. Our guidelines, standards and processes apply to all our business sectors and markets worldwide.
How we define product-related crime
1. Counterfeit products: In line with the relevant WHO standard, we define a counterfeit product as “a product that is deliberately and fraudulently produced and/or mislabeled with respect to its identity and/or source to make it appear to be a genuine product.”
This includes products
- with incorrect active ingredients or concentrations thereof
- without any active ingredients
- with dangerous impurities
- with modified/altered packaging and/or incorrect brand names
- with an authentic active ingredient, but not one produced under GxP conditions
- that have expired
- that were diverted from the legal supply chain
2. Illegal diversion of products: This term refers to the diversion of either pharmaceuticals or chemical substances from within the legitimate supply chain either to sell or export them through illegal channels to produce narcotics, weapons or explosives, or to use them for other illegitimate purposes.
3. Misappropriation of products: This refers to theft from production sites and warehouses, or while in transit.
How we are tackling product-related crime
Our Group Corporate Security function coordinates all our anti-counterfeiting activities, all of which are overseen by the Chief Security Officer and the head of Environment, Health, Safety, Security, Quality (EQ). Furthermore, all our sites have a product crime officer who is responsible for investigating potential cases of counterfeiting, acting as the interface between local regulatory and law enforcement authorities, national associations, our Group functions, and our sites. In 2019, conference calls with all product crime officers were held every two weeks to discuss strategic matters along with local issues and suspected cases of criminal activity.
Integration of Versum Materials and Intermolecular
As part of integrating Versum Materials and Intermolecular into our organization, we are examining the structures and processes in place to prevent and prosecute product-related crime, making changes as needed.
Group-wide anti-counterfeiting network
Our Anti-Counterfeiting Operational Network (MACON) is responsible for globally monitoring and executing all anti-counterfeiting measures for our products. Along with coordinating prevention and the development of security systems, this organization is also responsible for investigations. Comprising experts from various units such as Legal/Trademarks, Product Security, Export Control, Supply Chain, Patient Safety, and Quality Assurance, this network is coordinated by our Corporate Security unit.
To investigate suspected cases, MACON collaborates with the competent law enforcement agencies and regulatory authorities. In 2019, MACON investigated and pursued numerous incidents that primarily involved counterfeits within the legitimate and illegitimate supply chains as well as theft and illegal diversion.
Our commitment: Group-wide guidelines and standards
Our guideline entitled “Crime Relating to Products of Merck KGaA, Darmstadt, Germany” describes our goals and strategies for combating product-related crime. The Group-wide Product Crime Investigation standard sets out mandatory requirements and defines the procedures we follow within the Group. Moreover, it ensures that cases are processed efficiently and creates a clear legal framework for dealing with illicit products.
Enhanced monitoring and reporting systems
We analyze and document all counterfeit product incidents using a Group-wide reporting system. This approach provides us with a complete picture of the security situation, enabling us to identify possible links between different cases and effectively tackle them. Introduced in 2018, our standard operating procedure entitled Data and Documentation Quality Management details the corresponding process, making the risks more transparent and the processes more efficient.
Tracking system for chemical substances
We monitor chemicals that could be misused to produce illegal weapons, explosives or narcotics, tracking them through an internal system that flags suspicious orders or orders of sensitive products. These are only released once we have confirmed the existence of a (verified) end-user declaration.
In addition to fulfilling the duties stipulated by statutory provisions on export control, we also report suspicious orders, inquiries and requests to the competent authorities. Through these efforts, we are honoring a voluntary commitment of the German Chemical Industry Association (VCI) and meeting the terms of the Guideline for Operators published by the European Commission. In 2019, we reported 1,519 orders placed for relevant substances, which represents 1.8% of the overall order volume. In addition, we received six inquiries from the authorities regarding specific suspected cases that we helped to resolve.
We evaluate the effectiveness of our measures based on the number of reported, investigated and solved cases, as well as their severity.
Supporting customers and patients
To protect patients, the identity and authenticity of pharmaceuticals must be verifiable. We ensure this by rigorously implementing the requirements of the EU Falsified Medicines Directive. In February 2019, we started applying a unique serial number to the packaging of all the prescription medicines we commercialize in the European Union (Track and Trace). We also use this system in Colombia, Russia, the United States, Turkey Egypt, and other parts of the Middle East. In the coming years, we intend to roll out this system in all African countries as well as the rest of the Middle East. Plans are in place to implement it in Malaysia and Indonesia as well.
In addition, we also pursue our own initiatives:
- We apply the Security M label to some of our products, enabling users to easily verify authenticity. We take a risk-based approach to identifying the products to be labeled in this manner.
- In our Mobile Anti-Counterfeiting System (MAS) project in Nigeria, we are working closely with one of our suppliers on a text message-based identification system. Patients scratch off a barcode that is printed on the product packaging then text this code to a number that has been specifically set up for this purpose. They immediately receive a response telling them whether their code is authentic.
- We sponsor the non-profit Global Pharma Health Fund (GPHF), which supplies the GPHF-Minilab®, a compact laboratory used mainly in low- and middle-income countries to test the quality of 90 different active ingredients quickly and inexpensively. You can find more information on this project under Pharmaceutical supply chain.
- We offer our customers in the pharmaceutical industry Candurin® pearl effect pigments with unique color properties. When used to coat tablets and capsules, these pigments make it more difficult to create counterfeit copies.
Industry-wide exchange
In an effort to fight product-related crime, we actively participate in various associations and industry-wide initiatives. For instance, we work in very close partnership with the Pharmaceutical Security Institute (PSI), a non-profit organization dedicated to protecting public health. It both promotes the exchange of information on counterfeit products and helps the authorities to implement sanctions against the counterfeiters. You can find more information on our efforts under Stakeholder dialogue.
Raising awareness of product-related crime
We aim to raise awareness of product-related crime among our business partners and employees, educating and training our employees Group-wide on the subject.
All staff involved in security, such as product crime officers, participate in appropriate training programs aimed at building their capacities and promoting best-practice sharing. We are continuously evolving these programs and adapting them to new trends. In 2019, for instance, we held 35 training courses for our product crime officers covering incident reporting, case management, and cooperation with the authorities.
Security audits for contract manufacturers and distributors
We regularly check whether our distributors and contract manufacturers are complying with GMP and GDP (Good Manufacturing Practice/Good Distribution Practice). These audits are based on the EMA ICH Q10 pharmaceutical quality assurance standard. They also allow us to ascertain the extent to which our security requirements are being met by contract manufacturers and distributors. In addition, we conduct special security audits if a concrete need is identified. We also perform these audits as standard practice when we certify external service providers for our Security M label. This applies to both pharmaceutical contract manufacturers as well as companies that print packaging. Defects that we deem as critical must be rectified either before we enter into a contract, or a detailed corrective action plan must be submitted for our approval. In 2019, we conducted this type of security audit in Russia, which found two critical, eight significant and two minor defects. Corporate Security is monitoring the implementation of the necessary corrective actions. As soon as these have been completed, we can start the planned business endeavors.