Pharmaceutical cargo theft is something the industry will always have to guard against, but the protections the industry has put in place has turned theft from a crisis to a concern in the U.S., with the value of losses last year being only about 4.4% of what they were just two years ago.
According to the 2012 FreightWatch International 2012 US Cargo Theft Report, the pharmaceutical industry last year saw 30 reported cargo thefts with an average loss of $168,219. That put it in the middle of the pack for the 14 categories monitored by the security firm. In 2011, the average loss was more than $555,500, and in 2010, losses were the highest across all categories, averaging $3.7 million per incident. Of the 30 pharmaceutical thefts in 2012, 7 (23%) occurred in Texas, primarily Houston; four (13%) occurred in Georgia; while Florida, Michigan and New Jersey had three thefts each (10% each), the report said.
Several years ago, the industry created the Pharmaceutical Cargo Security Coalition to figure out how to protect against a security problem that was causing large losses and putting patients at risk when stolen drugs found their way back to the market through the gray market. In one case in 2009, the burglary of an Eli Lilly ($LLY) warehouse resulted in $70 million worth of cardiovascular and depression medications being taken. With losses mounting, drug companies learned to find shippers that put security at a premium. Rigs were manned with two drivers, one always in the rig. Cooperation with law enforcement meant that within minutes of a theft, police were looking for stolen trucks and GPS tracking devices allowed them to be quickly recovered.
The FreightWatch report was released as the Pharmaceutical Cargo Security Coalition was holding its annual meeting at a Bristol-Myers Squibb ($BMY) facility in Wallingford, CT. Charles Forsaith, chairman of the group and director of supply chain security for Purdue Pharma Technologies, said, "We are very happy with the progress that has been made over the last few years. It is notable and there are other industries like jewelry and tobacco that are envious. We have more collaboration than ever and a lot more law enforcement cooperation and it is paying off."
The fruits of that work have paid off in other ways. Besides seeing losses fall dramatically, cooperation last year helped law enforcement track down the cargo theft gang they believe was responsible for many of the crimes, including the Lilly warehouse theft. Authorities arrested 23 suspects and recovered most of the drugs lost in that and some other burglaries.
- read the report (reg. req.)