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Counterfeiting has long been a concern for manufacturers of high-value products. Criminals see the benefit of copying successful products and selling them to buyers who either knowingly or unknowingly purchase the counterfeit materials. As a result, brand owners that have invested substantial resources into research and development, product approval processes and marketing initiatives, find that counterfeiters reduce the brand owner’s market share. It can be costly, too.
Counterfeit items negatively impact revenues and can damage a brand when they are mistaken for legitimate products and are of sub-par quality. For manufacturers of products or substances that can be potentially hazardous if improperly formulated, such as pharmaceuticals, alcoholic beverages, and chemicals, counterfeit materials can ruin more than a reputation—they can injure or even kill unwitting consumers.
Recently, health and safety concerns have driven companies to reevaluate the security measures they are integrating into their product packaging, and no group has been more affected than the pharmaceutical industry. Whether through tampering with existing products or the creation of replica products from scratch, counterfeiting in this industry is growing at an alarming rate. The statistics are staggering:
• The World Customs Organization estimates that up to 7% of all world trade may be counterfeit.
• Approximately 10% of the world’s pharmaceutical supply has been estimated to be counterfeit or adulterated, according to the World Health Organization (WHO), though the percentage of counterfeits on the market vary substantially in different parts of the world.
• WHO states that counterfeit drugs comprise as much as 70% of the drug supply in some countries and have been responsible for thousands of deaths in the world’s more impoverished nations.
• According to a former U.S. Food and Drug Administration (FDA) associate commissioner, trade in counterfeit prescription drugs likely generated $75 billion in 2010 and is expected to increase at an annual rate of 20%.
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