|Eli Lilly's oft-copied erectile dysfunction medicine Cialis. The counterfeit pills are on the left.--Courtesy of Eli Lilly|
Track-and-trace is on its way, and some companies are scrambling to understand the impending deadlines and implement the new requirements accordingly. But with a 10-year history of fighting counterfeits, Eli Lilly ($LLY) is in a good position to make the switch, and now it's putting the wheels in motion to get the project underway.
According to the Indianapolis Star, Lilly will pump $110 million into stamping unique codes and serial numbers on every drug package it sells worldwide, allowing it to verify the origin of each shipment as it moves along the supply chain, all the way from manufacturing facility to patient. The bulk of the spending will come over the next two years as the company transitions to the new system, adding to the millions the Indianapolis-based drugmaker already spends on anticounterfeiting measures.
Under the new track-and-trace law, drugmakers are required to begin tracking prescription drug lots in 2015. Two years later, industry players must begin assigning serial numbers to individual "saleable units" of every prescription product sold in the U.S., government deadlines mandate. As Bryan Orton, Lilly's director of serialization and product protection, told the Star, that means more than half of Lilly's drugs worldwide will be required to contain product serial numbers by 2018.
So Lilly's not waiting to get started. The company is installing computer-controlled, high-speed stamping equipment in 40 packaging lines globally, an expensive undertaking: Lilly has already spent $5 million designing and testing the machinery on a mock packaging line in Indianapolis, the Star reports.
"It's not necessarily something pharma companies are asking to do, but we certainly see the value in it," Orton told the Star.
And the new program will be just a part of the company's anticounterfeiting operations. Lilly, which makes oft-copied erectile dysfunction med Cialis, has been a victim of counterfeiting multiple times, with illegal drug operations growing more and more sophisticated. The episodes led CEO John Lechleiter to make anticounterfeiting a priority, and the company now keeps a team of 7 drug investigators stationed on three continents, as well as an authentication lab in its home city, where 6 chemists test hundreds of suspect drugs per year.
Lilly has also helped bring industry-wide attention to the problem, becoming one of four members to found the Alliance for Safe Online Pharmacies in 2009. And last spring, it was one of 29 companies to provide investigative agency Interpol with $5.9 million over three years to train local authorities around the world on how to weed out fakes.
And it's not hard to see why. Counterfeiters are now targeting lifesaving drugs for conditions like cancer and heart failure, potentially seriously harming patients and endangering companies' brands. That's not to mention the obvious threat to sales that's present when consumers pick up a knockoff version in place of the real thing. And with Lilly expecting a particularly dismal financial year, it's a risk its top line can't take.
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