Combatting Counterfeiting in Medtech

Counterfeit medical devices pose a serious and escalating threat to U.S. patients. While the FDA has taken some action to remedy the situation through its Unique Device Identification (UDI) legislation, the move falls well short of what could and what is being done in other industries.
 
Globally, counterfeiting is thought to account for one to two percent of international trade. The covert nature of counterfeiting makes it impossible to accurately quantify the size of the counterfeit medical device problem in the United States. While some research indicates that up to eight percent of medical devices are counterfeit globally, it is highly unlikely that the figure is that high within the U.S.
 
While exact estimation is difficult, the documented seizures statistics from the Department of Homeland Security, FDA recalls, and highly publicized counterfeit discoveries, nonetheless provide evidence of widespread counterfeit proliferation within the legitimate supply chain.
 
Counterfeits in the Supply Chain
In recent years, counterfeit medical devices have been discovered across a wide array of categories and classifications—from bandages and gauze to contact lenses, spinal implants, and even parts of aortic pumps. The situation is troubling.
 
Each node in the supply chain represents a potential point of failure where an opportunity for illegitimate products to enter exists. All it takes is for a party with criminal intent to swap in counterfeits for authentic products.
 
Globalization, outsourcing, and e-retailing have significantly complicated the modern supply chain. As supply chains become more complex, a loss of control and visibility occurs.
 
The problem is accentuated by two factors. The extension of trade zones makes it easier for counterfeit goods to cross international borders and the increased sophistication of counterfeiters makes it more difficult to distinguish between authentic and counterfeit products.
 
Risk to Patients
While many of the counterfeits appear legitimate, they are, in fact, unregulated and lack FDA approval. At best, a healthcare provider could receive a product that is assembled from inferior quality components; at worst, one that contains toxic materials. In either scenario, as evidenced by incidents in the U.S. and the nature of the products involved, the risk to patients is the same—infection, injury, disability, and even death.
 
Beyond the patient safety impact, counterfeit medical devices have a wider, negative effect on industry and the economy, affecting patient trust, brand reputation, tax revenue, investment, innovation, employment, criminality, health, and even the environment.
 
Industry Response
Acknowledging the risk to patients, the FDA is implementing the UDI system as a means of facilitating the identification of medical devices through their distribution and use. UDI ensures both the packaging and the device include a unique device identifier. The final rule was published in 2013 and is to be phased in over a seven-year period.
 
While this legislation is a step in the right direction, it falls well short of what is necessary to safeguard patients. UDI only requires that the item contain a product identifier rather than individual production identifiers. It does not mandate tracking or tracing of product in the supply chain.
 
With these shortcomings, the UDI legislation is only bringing the medical device industry to a position that the pharmaceutical industry is already abandoning—batch-level identification—due to its inadequacies and inability to protect the patient.
 
Additional Safeguards Necessary
Stakeholders in the medical device market could take a number of actions to safeguard patients both at an industry and an individual brand level. At an industry level, the most evident solution would be for the FDA to mandate a full serialization and tracing model as they have done through the Drug Quality and Security Act (DQSA) in the pharmaceutical industry.
 
The serialization and tracing (ST) system is predicated on using a product’s provenance as a means of preventing counterfeits from entering the legitimate supply chain. The ST system is typically comprised of three elements—a method of marking products with a unique identifier, infrastructure to capture specific events at pre-determined points in the supply chain, and a means of analyzing and reporting on these captured events.
 
Serialization represents a departure from the normal manufacturing process and the recommendations of UDI. Through serialization, products are identifiable by each production-instance versus only being able to distinguish products on a batch or lot basis. The theory behind serialization is that by assigning unique numbers to each product and introducing authentication at various points, the potential for counterfeit products to get through the supply chain undetected is substantially reduced.
 
ST, however, is not a new concept and has known vulnerabilities. For instance, packaging and serial numbers can easily be reproduced.
 
The vulnerabilities of industry-wide approaches to anti-counterfeiting mean individual manufacturers should always consider deploying product-specific, covert security features. Brand owners are faced with a diverse choice of solutions to deploy when it comes to protecting their brands and they should seek a solution that is practical for the device they need to protect.
 
Examples of these covert technologies include invisible ink markings on packaging or taggants directly incorporated into the medical device material. The latter offers an extremely effective and secure means of ensuring product authenticity.
 
Whatever the measure, it must be economic to implement on a per unit basis, while acting as a sufficient deterrent such that the commercial return of counterfeiting that device is lessened or eliminated.