It has been branded 'the emerging crime of the 21st century' - the counterfeit medicines business is now worth an estimated $50 billion a year, which is about 10% of the entire global pharmaceutical market.

It's the fastest growing threat to the industry and is a real and obvious risk to patient safety but how much of this is relevant to the UK? Perhaps we're all guilty -we've all come back from our travels with a little piece of fake Gucci or Hilfiger.

Rolex - no problem - after all, it's only a few dollars, isn't it? Counterfeiting is a risk in any successful business whether it is high performance cars or designer T-shirts, and the pharmaceutical market is no exception.

There has always been some counterfeiting around the world, but it is the increase in the threat and arrival of larger volumes of fake product in established US and European markets that is grabbing the attention of policy-makers and manufacturers.

In some instances, it is the increasing complexity of the supply chain - the distribution channels by which the manufacturer brings their product to the market and ultimately into the patient's home, that is making the counterfeiter's job easier. The increase in online prescription sales direct to the public in the UK, as in every country is another classic entry route for counterfeit products.

Lethal consequences

Counterfeit businesses are based in less regulated markets - India, China, Nigeria and the former Soviet republics. With less severe penalties and relatively low risk, counterfeiting pharmaceutical products is far more attractive to organised crime than illegal drugs or gun-running and often far more profitable.

In some of these countries, the majority of prescription medicines are either fake or diluted in their efficacy - the WHO figures are staggering, estimating that there are 200,000 malaria deaths a year due to sub-standard medication. A little closer to home - just across the borders from our enlarged EU - in Russia, it is estimated that 12% of all prescription drugs used are counterfeit and in Ukraine, that figure leaps to 40%.

The WHO's definition of a counterfeit medicine is: 'A counterfeit medicine is one which is deliberately and fraudulently mislabelled with respect to identity and source. Counterfeiting can apply to both branded and generic products and may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient ingredients or with fake packaging.'

In our local markets, 'cloning' is one of the most common forms of counterfeiting - a product that looks identical to the real brand and contains the active ingredient, but at much lower strength.

Online risks only?

The UK supply chain is pretty much secure: there have only been a handful of UK cases involving Zantac and Ventolin over the last few years.

It is the huge increase in mail order and internet purchasing that is allowing fake products into the UK market. The aggressive marketing of 'blush' products and treatment areas like erectile dysfunction and Viagra by online suppliers is driving up supply. In the UK in 2003, £2.3 million of fake sildenafil (Viagra) was seized by the Department of Health.

That was the picture until last summer, when two new breaches of the traditional supply chain caused a real headache for manufacturers.

The revelation in August that counterfeit Cialis had been detected by Lilly, after a patient complained of crumbling tablets, and the more recent case of Reductil, underlined the growing challenge. Neither of these cases posed a real danger to patients but showed the relative vulnerability of the traditional supply chain.

Talking to the BBC about the Cialis incident, Dr Richard Barker, director general of the ABPI, said: "This incident highlights the need for the greatest vigilance and scrutiny, especially when medicines are introduced into the system other than from their original manufacturers.

"The best protection against counterfeiting is to ensure that the products bought are those supplied by the authentic manufacturer.

"Only then can the industry feel confident that its products are reaching patients in the same condition as they left the factory, and that patients are receiving medication that they can trust absolutely."

The industry fights back

For an industry where the 'brand is king', there are few activities that are more damaging than the illegal copying of products. A recent MORI poll of financial analysts underlined the point - damage the brand and you inevitably depress the stock market value of the business by as much as 10%.

Loss of sales and reduced return on R&D investment both pale into insignificance against the risk of consumer confidence being knocked by branded copies.

An even greater financial pain is the risk of legal action by patients - it is virtually impossible to chase liability against the fake product, so the legitimate manufacturer will be in the firing line. It comes as no surprise that as counterfeiting has crept into the legal supply chain in the US, the major manufacturers and the FDA have moved swiftly to fight it.

Box clever

Packaging is the frontline weapon in this fight: Pfizer are rolling out a programme to put all their products, starting with Lipitor, in tamper-evident packs over the next three years. The new boxes will be sealed at point of manufacture, making it obvious if the carton has been opened or re-sealed.

"We believe that the security measures can become a key component of anti-counterfeiting and packaging integrity efforts in the long-term and will therefore help to protect patient safety," commented a Pfizer spokesman.

One of the issues to be dealt with here is the re-boxing that goes on in the current supply chain to allow legal parallel importation - obviously a huge issue with the EU.

In a survey into the re-packaging that goes on within parallel import logistics, Pfizer found a number of worrying safety breaches:

• A different dose of medicine inside the pack than that stated on the outside.
• A medicine pack containing capsules but the box stating tablets.
• The expiry date and batch number on the medicine box not matching the expiry date and batch number on the medicines inside.
• Patient information leaflets in the wrong language.

Unrelated to last year's Cialis cases, Lilly has also announced an aggressive programme to combat counterfeiting, involving packaging initiatives of tamper-evident cartons and other technologies, such as holograms. They are also piloting several studies using radio frequency identification (RFID) - innovative electronic tagging systems that allow packages to be constantly monitored as they move through the supply chain.

It's a war out there

RFID could soon become the new industry buzzword. It has a good track record in managing logistics in other industries - after the Gulf War, the US military 'wrote off' billions of dollars of hardware and equipment because they couldn't find it in the desert. In Iraq last year, the entire supply chain from tanks through to shipments of spare boots was tagged with RFID.

A different application is the 'Oystercard' from London Transport - a super-intelligent smart card. It is one of the biggest ticketing initiatives in the world and is a good example of what this technology can achieve, showing passenger purchases and movements as well as individual consumer profiles.

"Safeguarding the patient is at the heart of the issue," says Rob Whewell, a lead consultant with the PA Consulting RFID project for UK pharma.

"The real mission here is to provide authentication at the point of dispensing. Everything can be copied - asking the pharmacist to check each pack, match a hologram or a code is not fault proof. It is very difficult - current counterfeit products are very difficult to identify.

What's in it for me?

There is widespread interest in this project and RFID is one solution, but the issue is about mass serialisation - more advanced bar coding methods.

RFID has its attractions for a manufacturer - it means peace of mind at the point of dispensing, and the ability to track batches and packs in the supply chain has a lot of value in enhancing planning and manufacturing. From the NHS/government perspective, the opportunities are different - for example, if all generic packs were tagged, then reimbursement could be made a lot more accurate.

A number of manufacturers joined the pilot programme - among those involved or interested are Merck, Generics UK, Solvay, Schering Healthcare and Novartis.

John Peter, managing director of Solvay, says: "We were keen to take part in this project and take the view of the ABPI that we need to move forward utilising new technologies to protect patients from risk. There are no products in the current Solvay portfolio that face counterfeit risk, but we take a broader view - particularly within Europe, where products are routinely scanned in Belgium and Italy. There may well be other advantages in enhanced traceability, for example - let's see what the pilot shows us."

Richard Saynor, managing director of Generics UK is less convinced of the benefits, saying:  "I'm interested to see the results of the pilot but for us as a leading generics supplier, this looks like a perfect solution to a problem that we just don't have. There is no real risk of counterfeiting in generics - our costs and margins do not have the appeal that the targeted brands or more expensive products appear to have."

Mainline wholesalers are showing interest in the scheme - tagging offers more than just logistical information. By embracing this innovative technology, the major wholesalers can differentiate themselves from the short line players and PI stockists.

What about pharmacists?

What would it mean for the pharmacist? RFID would guarantee the integrity of the product dispensed and would also expose the true costs of the purchasing. It would mean scanning hardware in every pharmacy, something that has been used in Germany for many years. Across the EU, various countries - Italy, Belgium and Portugal - have introduced unique pack identifiers to help control pharmacy fraud.

Adrian Giles, a pharmacist at Kitson Pharmacy in Worcester, one of the 50-odd pharmacies in the UK pilot testing the scanner that reads the unique tabs, says:  "I joined the pilot group out of genuine interest in what the technology can deliver. As a pharmacist, the risk of mistakenly dispensing a counterfeit product while remote in the UK was made a lot more real with recent incidents in the summer." Giles has a scanner installed in his dispensary - the technology is supplied by Aegate, a spin-off PA Consulting company, working in partnership with BT.

"The scanner reads bar codes and the limited number of RFID tagged products being tested in the pilot - more than 20,000 items have been scanned so far. From a pharmacy perspective, the system is working well - it is quick, accurate and it sits easily alongside the label printer."

And what's in it for the marketer? London Transport do not view the RFID initiative as a 'cost', nor do Manchester United who have introduced the technology for their latest season tickets. The opportunities for direct marketing and more efficient supply chain management are obvious. The ability to track individual pack distribution and usage opens up whole new areas for consumer relationships.

"Again, cost is a real issue here for the generics industry - no single manufacturer would want to take on extra packaging or chip technology and put themselves at a competitive disadvantage. Extra manufacturing costs would be generated right down the line - adding complexity to manufacturing, packaging and the inevitable licence variations all add to the market prices," says Generics UK's Saynor.

Finally, the patient will be secure in the knowledge that their prescription is filled with a legitimate, high quality product. The balance between patient safety and confidentiality is always a fine one. One of the sensitivities in this whole issue is the scanning technology - a scenario to avoid would be accidentally 'reading' prescription packs carried by patients in pockets and handbags.

The initial pilot project was concluded in March - having processed more than 180,000 pharma products through the 44 pharmacy points it has been hailed as a major success.

Solvay's Peter says: "The Aegate trial has demonstrated to us that if we were to implement unique identification tagging, pharmacists would welcome it and it would protect the authenticity of our products."

Counterfeiting is a problem that is only going to grow - in the UK and everywhere else - given the value of the prize, the opening of EU borders and the relative ease of manufacture. The pharma manufacturers and enforcement agencies will work together to fight it - developing and securing the major brands will become more sophisticated.

As a direct result of the pilot's success, PA Consulting has announced that it intends bringing the service to market, by investing £15 million to roll-out a full commercial offering in the UK and further afield.

For more innovative marketers, counterfeiting may become an opportunity - if you identify your brand as efficacious and cost-effective but also more difficult to copy you will have a real winner!

In the drive to reassure the consumer or patient, innovative packaging and tracking technology will become much more of an issue, allowing marketers to increasingly differentiate their brands from the competition, whether it is other brands, legal generics or illegal counterfeits.