In August last year, India’s Central Drugs Standard Control Organisation raided an unauthorised warehouse in the eastern city of Kolkata. What they found was striking: drugs worth over $240,000, apparently manufactured by some of the biggest names in pharma. Yet if the hoard supposedly included medication from Sun Pharma and Alkem, among other industry luminaries, what was really remarkable was that all the drugs were fake. As the single person arrested in the swoop may soon have to explain in court, he was likely part of a vast illegal enterprise, one where counterfeit medications, boasting plausible packaging but otherwise, make criminals millions of dollars a year.

Nor is the subcontinent especially unique. According to work by the Pharmaceutical Security Institute, for instance, 2021 saw almost 6,000 pharmaceutical crime incidents, up from less than 2,000 a decade before. It’s a trend echoed in specific regions, with up to 50% of all the drugs in sub-Saharan Africa apparently manufactured illicitly. It goes without saying, moreover, that if all this activity makes criminals rich, there are serious dangers here too. Most notable is the impact counterfeits could have on patient health, either because they simply fail to cure an illness – or because of the nasty side effects. From there, the consequences rumble right across the sector, with physicians, manufacturers and regulators all potentially facing financial and reputational damage from fake drugs.

Not, of course, that the situation is helpless. By investing in robust supply chain traceability, physicians and patients alike can rest assured that their tablets or pills are kosher. Digitalisation is predictably important here, with AI and other technologies allowing users to quickly check if drugs or packaging are genuine. Yet it’d be wrong to imagine that logistical clarity can be gained from big data alone. Rather, the path to genuinely modern pharma traceability requires change across multiple areas, from engaging external expertise to liaising with regulators. To put it differently, developing truly dynamic pharma traceability requires both technical sophistication and strong professional relationships – especially as the risks of counterfeiting are only set to rise.

Bitter fake

Few experts are better placed to consider the depressing impact of counterfeit pharmaceuticals than Max Kabalisa. A supply chain manager in UNICEF’s supply division, he’s dedicated his career to keeping children safe from illicit drugs. And as Kabalisa explains, the impact of such medications can be devastating. “Counterfeit and falsified medicines are estimated to cause the death of 169,000 children under five every year,” he says. “For the individual child, not only do counterfeit medicines often fail to treat the diseases for which they were intended, but they can also cause additional harm, such as poisoning.” Nor are kids the only ones at risk here. Adults, it hardly needs saying, are susceptible to counterfeit drugs too – even as fake products can make users sceptical of doctors and their wares.

Once you factor in the financial cost of counterfeiting – one 2019 report found that fakes result in lost sales of €16.5bn, affecting some 80,000 jobs – and it’s little wonder industry experts are so focused on ensuring that they can trace drugs from factory floors to patients. Yet if the pharma track and trace solutions market was worth some $3.5bn in 2022, and could yet enjoy CAGR of almost 20% through 2030, traditional techniques have suffered from significant drawbacks. For Anil Suresh Kumar, these problems basically stem from a lack of serialisation. As the pharma compliance expert and SAP product manager explains, that meant there was “no visibility” into where a product had come from. “Now looking at the bottle – or even at the package – you couldn’t really say where it actually originated from.”

With that in mind, it makes sense that regulators the world over have invested heavily in serialisation. Typical here are the rising demands of the US. First introduced under the The Drug Supply Chain Security Act (DSCSA) of 2013, a 2023 update states that prescription drugs must be serialised with a unique product identifier. Just as importantly, every partner in a particular supply chain must verify the prescription drugs they receive – and maintain strict records. Not to be outdone, European lawmakers have made similar moves, with manufacturers expected to first serialise products, then send the relevant data to a central repository and leverage network for country submissions. Mandar Paralkar, SAP’s global VP, product marketing, life sciences and healthcare, adds that apart from the predictable challenges of organising shipments across borders, simply understanding localised regulations written in a range of different languages can be difficult too.

The approximate percentage of drugs in sub-Saharan African that may be counterfeit.

Tools of the trade

Unsurprisingly, these demands put immense pressure on operators up and down the supply chain. A good example comes from industry surveys, with one recent poll suggesting that 72% of pharma distributors believed ‘technical challenges’ were a major hindrance around DSCSA compliance. Fortunately, however, help is at hand. In the broadest sense, that’s apparent in terms of the pharma databases now available in the market. One prominent example is SAP Advanced Track and Trace for Pharmaceuticals (ATTP). A SaaS solution, this powerful tool digitises the arduous serialisation process. “Every time a drug is produced,” Kumar explains, “SAP ATTP basically generates these unique serial numbers that need to be imprinted on the pharmaceutical product.” From there, another product called the SAP Information Collaboration Hub kicks in, which helps aggregate the varied comings and goings in a single place and which can then be shown to regulators or patients concerned about a product’s provenance.

The number of children under the age of five who die due to fake medicines each year.

As a commercial player, predicated on providing efficiency for customers and profit for itself, SAP might be expected to have integrated cutting-edge technology into its platform. It’s, therefore, a testament to the importance of such systems that Kabalisa and UNICEF should have developed a public sector alternative. The Traceability and Verification System (known as TRVST) allows drugs to be traced, in Kabalisa’s phrase, “from the manufacturer to the end-user” – leading to a range of practical advantages. For one, the UNICEF representative envisages a world where healthcare providers can authenticate vaccine packs on the fly, bolstering health and assuaging doubts about a drug’s effectiveness. That’s shadowed, he continues, by the potential for real-time data exchange between TRVST and the serialisation platforms of drug manufacturers. If, after all, the latter can keep track of distribution records or expiry dates, they may be able to tweak production lines accordingly.

The size of the pharma track and trace solutions market in 2022, with the sector expected to enjoy CAGR of nearly 20% through 2030.
Grand View Research

Kumar, for his part, sees the advantages of such systems in even broader terms. With unscrupulous operators sometimes taking expired drugs that were meant to be removed from the supply chain, then reselling them illegally, he says that using photographic data to prove a batch really has been destroyed can be a real boon. And if this work is obviously predicated on new technology, Paralkar emphasises that the digital fight against counterfeits extends far beyond mere recordkeeping. Consider, he says, a drug’s packaging. As the bust in Kolkata implies, bad actors make an effort here too, creating boxes that mimic genuine products – even if what’s inside isn’t legitimate. But what if, Paralkar says, stakeholders could take a photo of a package on their smartphone, then use an AI to model the likelihood that it’s real? Already integrated into SAP’s Information Collaboration Hub, Paraklar suggests that figuring out ways to “leverage our repository data” is a constant preoccupation.


It’s clear, in short, that data and digitalisation can revolutionise the fight against fake pharma. But listen to the experts and it’s equally clear that computers can’t do the work all alone. If nothing else, says Kabalisa, that’s obvious around ensuring technology is there for everyone who needs it. “The success of TRVST,” he argues, “requires the participation of governments and the engagement of manufacturers to serialise their products in emerging markets and register them in the global repository. It is, therefore, important that the national regulatory systems and supply chain management ecosystem can handle the serialised data.” More generally, Paralkar suggests that the internationalised nature of regulation is complex – but platforms like SAP’s can certainly help. Translating preliminary guidance is only a starting point: if you try too early, he warns, you may have additional work by the final version.

At any rate, these considerations are only likely to become more urgent. With counterfeiters themselves becoming more sophisticated – criminals are increasingly adding some of the active ingredient to their concoctions, making them harder to spot – Kabalisa says that the need for pharmaceutical tracing is likely to become “more critical” over the years ahead. Given the potentially dire consequences of counterfeits to both health and reputations, it’s hard to disagree.