Pharmaceutical brands face an increased threat online, according to a new report by the brand-protection firm MarkMonitor. The study, Brandjacking Index: Summer 2009, focused on six leading drug brands and examined these key areas of pharmaceutical brand abuse online: illicit pharmacies, listings on B2B exchange sites, and cybersquatting, or the abuse of a trademark within a domain name.
MarkMonitor estimates that online pharmacy sales grew to $11 billion in 2009, almost triple the $4 billion in sales from 2007. The study examined 2,930 online pharmacies and found that only four carried Verified Internet Pharmacy Practice Sites (VIPPS) certification. The VIPPS program is governed by the National Association of Boards of Pharmacy to ensure the legitimacy of online pharmacies. The US Food and Drug Administration advises consumers to confirm VIPPS certification of pharmacies in order to shop safely for pharmaceuticals online.
The study found that pharmacies not certified by VIPPS offered discounts of up to 90% off the prices found on VIPPS-certified pharmacies, and that such a deep discount could indicate goods of suspicious quality. Te Smith, vice-president of communications for MarkMonitor, told Pharmaceutical Technology that consumers should try to be as educated as possible when shopping online for pharmaceuticals. She recommended checking the VIPPS website to verify the accreditation of an online pharmacy rather than simply looking for the VIPPS seal because illicit pharmacies can fake the credentials on their websites. Regarding deep discounts, she warns, “If something looks too good to be true, it probably is. Getting fake or expired drugs is no bargain.”
Listings on B2B exchange sites for bulk quantities of pills and active pharmaceutical ingredients (APIs) for the six drug brands in the study increased 23% in 2009. The study found 652 listings, which was a 67% increase over the results of the company’s 2007 report. Specifically, bulk API listings grew by 81% in 2009. Most listings in the study noted a country of origin for the products; 49% named China, followed by India at 17%. Suspect activity on the exchange sites included listings for generic versions of patent-protected drugs, as well as one supplier that offered bulk quantities of branded pills, sports jerseys, and sunglasses.
Cybersquatting on six leading pharmaceutical brands was up 9% from last year, according to the study. The number of offending websites reached a record high of 19,163 domains.
The report highlights the economic factors driving people to seek discount pharmaceutical products online. With the increase of consumers turning to illicit online pharmacies and manufacturers looking to B2B exchange sites to sell bulk quantities of pills or APIs, the opportunities for substandard or counterfeit products increase as well.
“Scammers are opportunists, and by targeting the supply chain they’re positioning themselves to move the greatest amount of fake product they can,” said Frederick Felman, chief marketing officer at MarkMonitor, in press release. “This maximizes their return on the scam but it also poses a potential danger to peoples’ health and safety, not to mention brand reputation.”
Smith offered advice on how brand owners can protect themselves from the growing problem of abuse. She highlighted the importance of educating consumers about safe shopping online, pointing out that many pharmaceutical manufacturers have this information on their websites. Smith also suggested that brand owners focus their attention on the B2B exchanges and to work with the proprietors of those exchanges to remove listings that are violating their brand.
MarkMonitor’s findings are similar to a report released by OpSec Security in July, particularly in terms of suspicious and illicit B2B exchange and pharmacy activity. OpSec’s two-year study showed a 30% increase of bulk pharmaceuticals and APIs offered online on B2B exchanges. It also found that unaccredited Internet pharmacies featured prices discounted by as much as 60–80% below the average price listed on VIPPS-certified pharmacies. With the growing trend of illicit activity online, it is becoming more important for brand owners and consumers to protect themselves against counterfeit, adulterated, and substandard pharmaceutical products.