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article imageCounterfeit Drugs and Other Goods Hard to Swallow, So Big Business Responds With Hi-Tech Ideas

By David Silverberg     May 28, 2007 in Technology
From fake drugs to phoney purses, counterfeit products are spreading across the world. But wily businesses are fighting back with science and technology promising to protect their goods from criminal fakery.
Digital Journal — You’re sipping a glass of Bordeaux wine, revelling in the palette-perfect flavour and aftertaste. You assume the drink is French — after all, the label said so — but that bottle could be full of cheap wine courtesy of Chinese or Thai counterfeiters looking to fool distributors. Welcome to the world of fake products and the hi-tech science designed to keep everyday goods tried, tested and truly real.
For many years, companies and customers have been burdened by the scourge of counterfeit rings with a simple mission: create fake stuff that looks real. The money’s there to be stolen — according to the International Chamber of Commerce, businesses lose close to $600 billion (all numbers US) a year to counterfeiters, a figure that’s predicted to grow to $1.2 trillion by 2009.
In a comprehensive piece in Business Week, the authors found how businesses are not taking these losses lying down. Anti-counterfeiting has become more popular than ever before, and more sci-fi than you’d imagine. The authors wrote: They’re applying the latest advances in molecular science and nanotechnology: injecting their products with nanotracers, dyeing them with invisible DNA markers, and engraving them with microscopic laser etchings.In an ideal world, every handbag, plastic container, pill bottle or pair of sneakers will carry their own unique code logged in an electronic database and scanned with a handheld reader. As Business Week explains:When the code is scanned, the information embedded in it, including a random serial number, is instantly matched against a database. A match can only occur once. If any serial number pops up a second time, investigators are alerted.One of the leading companies pushing for this overhaul is pharma giant AztraZeneca PLC, whose ulcer medicine Nexium contains hidden molecular tags and holograms. This tactic may not completely deter counterfeiters, but it does the raise the cost for these criminals to try to mimic a pack of Nexium. Even measures like these go a long way to curb the global tide of counterfeit drugs.
That issue has reached such a tipping point there’s even a conference targeting it: The 3rd Global Forum on Pharmaceutical Anti-Counterfeiting recently took place in Prague.
And as the New York Times reported
, the Food and Drug Administration has found counterfeit Lipitor, Viagra, Botox, Zyprexa and birth control pills, among others.
Criminal fakery can also take a heavy toll on makers of cellphones (phoney batteries can cause explosions), automakers (brake pads can be duplicated with compressed grass trimmings) and airplane manufacturers — the Federal Aviation Administration currently estimates that two per cent of the 26 million airplane parts installed each year are counterfeit.
Businesses in America lose close to $600 billion per year to counterfeiters. - Photo illustration by Digital Journal
With all the malicious bootlegging comes an authentication industry hoping to reassure companies with their technology. It’s become an oft-overlooked sector that’s now reaping the rewards of a $500 million a year industry. There are many signs of success: for the past five years, Texas-based Authentix has helped weed out 20 wholesalers suspected of mixing their Shell-branded gas with a cheaper mix before passing it along to filling stations.
Business Week reports on innovative tech used in the luxury-brand market:
Florence-based Solos bonds minuscule tags to fancy leather goods. Israel’s Advanced Coding Systems Ltd. weaves a magnetic filament into high-end apparel. A Belgium-based European consortium called Naginels offers a laser engraving technique that etches code so tiny each letter or number measures just 3.5 microns in height.Many penny-pinching consumers might be disheartened to learn a Prada purse won’t be able to be faked. Buying knock-offs can be the goal of many shopping missions, but anti-counterfeiting measures will curb the spread of wannabe sneaks or coats. When it comes to clothing, no one is suffering any physical harm, just enduring a moral quandary.
Purchasing counterfeit goods supports terrorist activities, some experts claim. “Illegal profits from the sale of these goods have been traced to organized crime and violent extremist groups, which use the money to fund terrorism,” says Michael G. Kessler, president and CEO of Kessler International, a corporate investigations firm.
The determination to fake the fakers is fuelled by the rise of RFID chips, a new “bar code” the size of a grain of rice that can track a product’s progress through the supply chain. For instance, every bottle of the painkiller OxyContin bound for Wal-Mart is tagged with an RFID chip so retailers can scan the bottle and find the product’s exact origin. Any reject that couldn’t be traced properly is sent back to the manufacturer.
Turning to the bottle of Bordeaux wine you thought was real, how can you be sure the vino is veritas? If the wine came from one of two dozen Bordeaux producers working with Geneva-based Algoril, you can rest easy: Algoril prints labels that give each bottle its own code, which customers can match against a database using their cellphones. How’s that for insurance?
When counterfeiters have free reign to copy products at will, and suck money from hard-working businesses, capitalism is hurt incurably. But what smart companies can start to do, much to benefit of every customer, is learn how technology can help them retain corporate credibility by releasing their products as they’re meant to be: safe, authentic, reliable.
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