¶ … anti-counterfeit technology be used to yield economic benefit to the company and mitigate any negative social impact on society? The Sustainability Challenge

Business Case Analysis

Emerging Trends, Policy Frameworks, Literature and Strategy

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The organization, Cure Pharmaceutical (Cure), belongs to the pharmaceutical industry's drug delivery technology sector. Cure is considered a small size pharmaceutical company with revenues of one hundred and fifty million. A technique, designed by the firm, enables patients to take medications without water. This patented Oral Thin Film Technology (OTF) is small, light and occupies much less space after packaging. The technology can be shipped in single dose form or in bulk rolls to the site of patient care. Cure's core business integrates generic drugs that are an effective treatment for a multitude of diseases into its proprietary OTF technology. Cure's main emphasis is to expand its distribution channel into emerging markets particularly in Latin America, India, and Africa for the treatment of Malaria, HIV and other infectious diseases. These markets are known for the highest incidence in counterfeit drug infiltration (WHO, 2011).

Since Cure has a unique delivery system, it distributes OTF both in bulk form and in individual dosing units utilizing authorized and private brokers, the implementation of anti-counterfeit technology becomes a greater challenge. In addition, since some product is cut into dose form from bulk rolls at the site of patient care, simple tracking devices in packaging may not suffice. Furthermore Cure is a small size company with not much redundancy in its manufacturing process, thus finding a solution to protecting against counterfeit drugs without disrupting in its operations so that it can continue to supply medicines to the needy is crucial. It is also pertinent to adapt a strategy that allows for Cure's mission in keeping medicines affordable for everyone in need. Counterfeit drugs have a tremendous impact on not only business sustainability but social sustainability as well. When patients do not receive the appropriate medications, it can result in secondary infections, loss of work and increase risk in death. According to the Western Australia Council of Social Services (WACOSS) "Social sustainability occurs when the formal and informal processes; systems; structures; and relationships actively support the capacity of current and future generations to create healthy and livable communities"(AUSPA, 2012). As Chief Executive Officer (CEO) of Cure Pharmaceutical, I believe that it is the company's responsibility to address these social sustainability issues that potentially impact our stakeholders and the communities we serve.

As CEO of Cure, I have been tasked to research how implementing anti-counterfeit technology can protect our products as well as how it may help our overall mission of delivering affordable quality therapeutics for life threatening diseases thereby creating a socially responsible sustainable value chain within our organization. I will report my findings to the board of directors representing all stakeholders within our organization and later present a proposal to facilitate the appropriate plan of action.

The Sustainability Challenge

The company has had numerous internal debates on social sustainability and how it relates to protecting our value chain, especially in the fight against counterfeit products in the pharmaceutical sector. The fight against counterfeit medicine is not only a business sustainability issue; it is an inherent social sustainability issue. Counterfeit medicine not only can cause death and prolonged illness in a patient population, but also can have a severe impact on the economy due to loss of work, increased health cost because of secondary illness and increased morbidity (WHO 2011). Stakeholders can lose faith in medicines and the company's brands that have been counterfeited. As such, the need for more steadfast approaches or initiatives to tackle the issue of counterfeits has led to the need for the development of stringent and effective measures (Robson and Mccartan 2016).

In addition, certain anti-counterfeit technologies require modifications in existing production processes and present operational challenges to the manufacturers. Some of these operational challenges can cause disruption in the supply chain and create a shortage in some of these essential medicines for the population in need. This can have a grave impact on the overall goal of our social sustainability program and have wide negative implications on the population we serve. Amid some of the concerns about the entry cost associated with the implementation, there are additional concerns about overall effectiveness. The effects of counterfeiting are hard to measure, in both human impact and financial loss. Unless baseline data are established the effects of an anti-counterfeiting program are therefore often difficult to demonstrate and it is impossible for a company to develop a successful and coherent anti-counterfeiting strategy (Davison, 2010).
As we continue to grow in these emerging markets, the threat of counterfeit infiltration of our brand and value-chain increases. For Cure to continue to grow in these markets, the company must use independent brokers and secondary wholesalers often controlled by small private entities with little security and control over their distribution chain. Since entering the emerging market sector, Cure has seen a five percent increase in counterfeit products infiltrating its distribution channels over the last eighteen-month period. Despite the risk, the emerging markets offer strong growth potential and it is critical to Cure's overall mission of distribution of affordable essential medicines to populations in need. Figure 1 below depicts the future growth in the emerging markets.

FIGURE 1. Future Growth in Emerging Markets

Although the company has taken many measures to create a sustainable value chain such as auditing our suppliers, validating material, green packaging, and efficient energy use during manufacturing process, water use reduction and testing all components, we have not yet addressed the issue of counterfeit infiltration into our supply chain. Multiple options exist -- from RFID, coding/printing, holograms, security-labels to track and trace, tamper evidence features and end-use design (Markets & Markets 2016). As discussed, Cure faces extreme vulnerability in its distribution chain due to the heavy reliance on private or independent brokers and secondary wholesalers to help effectuate distribution into the emerging markets, specifically the rural hospitals and clinics. In an interview with Wayne Nasby the Chief Operating officer and head of logistics for Cure he pointed out that, "most independent brokers and wholesalers have no way of determining if a product in the distribution chain is counterfeit and in fact some of the brokers are bad actors themselves." Figure 2 below depicts Cure's current distribution component of its value chain utilizing private brokers and secondary wholesalers without any anti-counterfeit technology. The flow from secondary wholesaler to private brokers is the most vulnerable component for counterfeit infiltration into Cures distribution chain.

Figure 2. Cure Pharmaceutical Distribution Arm of Value Chain

Business Case Analysis

Emerging Trends, Policy Frameworks, Literature and Strategy

The challenge of overcoming counterfeiting in the pharmaceutical industry has wider sustainability relevance due to the degree to which counterfeiting impacts all sectors of markets all around the world, undermining the social order, causing consumers to feel insecure in their purchases, loss of work for poor treatment and possibly death (Hamid, Ramish 2014). Just as Norton Guarantee in conjunction with Symantec technology has become popular for eCommerce firms in recent years (promoting the concept of secure Web transactions), the pharmaceutical industry stands to benefit from addressing the issue of security when it comes to delivering an authentic product to consumers wherever they may be in the world.

Firms like Cure must be creative in combating activities that are hard to root out. One way to do that is to implement anti-counterfeit technology in the delivery and distribution process. Bringing positive change for sustainable development is the key factor here, and anti-counterfeit technology is a variable that can make an enormous difference in the way that firms control their products during the shipping process. It is in the company's, and the client's interest that these protections be implemented as the firm is responsible for not only producing a product that works but also for getting it to the shelves and into consumers' hands untouched and uncontaminated in the exchange (Hamid, Ramish 2014). It is true that counterfeiters can duplicate measures usually within 12-18 months of implementation, which requires deliverers to implement a rotation strategy; however, the overall assessment of researchers is that this strategy is imperative because without it there is no guarantee that products are arriving as advertised on the box (Bansal, Malla, Gudala, Tiwari 2013).

Abel (2010) reports that anti-counterfeiting measures are on the rise in the pharmaceutical industry, which is actively engaged in reducing counterfeit drug cases. Estimates given by the World Health Organization show that "10% of all pharmaceuticals in the global supply chain today are counterfeit and that sometimes the fake drugs contain toxic substances and chemicals that could cause death" (Abel 2010:1). The risk of not addressing this issue, therefore, is that consumers face a 1 in 10 chance of purchasing a…