OpSec Security Identifies Latest Market Trends in the Online Sales of Prescription Drugs by Internet Pharmacies and B2B Trade Boards
Part 2 of Study Shows Increased Illicit Behavior on Internet Pharmacies and Expanded Sales of Counterfeit Bulk Pharmaceuticals on Trade Boards
BOSTON--(BUSINESS WIRE)--OpSec Security, Inc., the global leader in anti-counterfeiting and brand protection, issued a study which identified increasing trends of rogue behavior by Internet pharmacies selling drugs to consumers and Business-to-Business (B2B) trade board sellers offering bulk quantities of pharmaceuticals and Active Pharmaceutical Ingredients (APIs).
- 86% of unaccredited online pharmacies offer drugs with discounts of 40% or more, up from 42% in 2007
- 89% of unaccredited online pharmacies do not require a prescription, up from 51% in 2007
- 79% of unaccredited online pharmacies have U.S. site registrations, up from 55% in 2009. Although this may seem like a positive trend, it is offset by the rise in use of identity masking services based in the U.S., and also the use of blatantly false information, such as celebrity names as registrants
- Increasing number of B2B trade board sellers are positioning themselves as drop shippers or order fulfillment centers for Internet pharmacies
- 60% annual increase in trade board listings of prescription drugs and APIs for sale on B2B platforms
- Significantly expanded drug and API portfolios from manufacturers and distributors in China and India selling on B2B trade boards
- 50% annual increase in listings from trade board sellers outside of China and India, mostly from Eastern Europe, Malaysia, and Turkey
Growing Trends of Illicit Behavior by Rogue Pharmacies
Of the nearly 7,000 sites reviewed by the National Association of Boards of Pharmacy, only 4% of those online sites appear to be in compliance with pharmacy laws and practice standards. OpSec performed a trend analysis based on the pricing of prescription drugs in rogue online pharmacies since 2007. During this period, the percentage of drugs with discounts of 40% or more increased from 42% of drugs offered in 2007 to 86% in 2010. This doubling of deeply discounted drugs is a key indicator that an increasing amount of counterfeit drugs are being sold.
The exception to these markdowns is the lower discounting of popular controlled substances. For example, the average discount from retail is 19% for Schedule II drugs sold online. The higher market value for these heavily regulated substances remains consistent in the online space, where discounts are limited for drugs with a high street value.
Another troubling trend is the increase in rogue pharmacies offering prescription-only medications without a prescription or with an online consultation. Over the three-year period, the trend increased from 51% in 2007 to 89% in 2010. Selling medications without a prescription is in direct opposition to FDA regulations to safeguard patient safety, and is an indicator of the irresponsible behavior of rogue pharmacies.
Site registration at a host location outside of the U.S. or use of a masked registration to maintain anonymity is a classic marker for identifying a rogue Internet pharmacy. The OpSec study showed a significant rise in ICANN registrations of Internet pharmacies hosted in the U.S., a movement from 55% in 2009 to 79% in 2010. However, this positive trend is misleading because of the growing use of domain proxy services to block the identity of site operators and to list their location in the U.S. Rogue pharmacies are also hiding their identity by using blatantly false information, such as celebrity or false names as the registrant. In addition, although a site may be registered in the U.S., their drugs may still be sourced from a drop shipper outside of the U.S., which may not adhere to FDA safety regulations.
Expanded Sales of Counterfeit Bulk Pharmaceuticals on B2B Trade Boards
OpSec's research has shown that retail site operators often source products from B2B trade boards. The OpSec study uncovered multiple B2B sellers positioning themselves as a drop shipper or order fulfillment center for Internet pharmacies targeting patient populations in the European Union, U.S., Israel, Japan, Brazil, and Australia. In such a relationship, a rogue pharmacy accepts online orders for pharmaceuticals from patients, and the drop shipper actually ships product to customers. In one analysis, OpSec uncovered a number of B2B sellers acting as drop shippers to fulfill orders for a single marketing affiliate network consisting of more than 400 storefronts worldwide. In this case, orders were fulfilled in India.
OpSec performed a year to year analysis in the availability of bulk pharmaceuticals on B2B trade boards, and identified a 60% increase in number of listings. Since trade boards are unregulated global e-commerce environments, they allow for the introduction of suspect products into the pharmaceutical supply chain, and represent a significant risk to patient safety. Trade board sellers from China and India have greatly expanded their drug and API portfolios to capture demand across numerous drug categories. A 50% increase in listings was found from trade board sellers located outside of China and India from a year earlier. In addition to Eastern Europe, the data suggests Malaysia and Turkey as the next areas of growth for counterfeit pharmaceuticals.
The findings of the OpSec study show market trends of escalated risks to the pharmaceutical supply chain and to patient safety. Rogue Internet pharmacies are exhibiting growing patterns of illicit behavior. Suspect B2B trade board sellers are expanding their role as the source of bulk pharmaceuticals in the global supply chain. The online sales of drugs present a growing concern that requires the attention and coordinated response of government agencies, the pharmaceutical industry, and consumer advocacy groups. More work is needed to educate patients about the dangers of purchasing prescription drugs online, and to direct patients to accredited Internet pharmacies, such as those certified by the VIPPS (Verified Internet Pharmacy Practice Sites) program and the CIPA (Canadian International Pharmacy Association) program.
OpSec Security, Inc. is a wholly-owned division of OpSec Security Group plc (London AIM: OSG). OpSec Security is the global leader in providing anti-counterfeiting technologies, as well as solutions and services for physical and online brand protection, to over 300 brand owners and over 50 governments worldwide. The Group operates manufacturing facilities and laboratories in the USA and the UK, and has sales operations in the Americas, Europe, and Asia. For more information, please see www.opsecsecurity.com, or contact Terri Mock, +1.617.226.3000 begin_of_the_skype_highlighting +1.617.226.3000 end_of_the_skype_highlighting, or [email protected].