India is witnessing a disturbing rise in counterfeit medicines flooding retail markets. According to the All India Organisation of Chemists and Druggists (AIOCD), the incidence of fake and substandard drugs has surged by nearly 50% since the COVID-19 pandemic, now constituting around 15% of all medicines sold-up from the previous 10%. This alarming trend threatens the health and safety of millions of patients nationwide.
Counterfeit medicines can be ineffective, harmful, or even fatal. They undermine trust in healthcare, lead to treatment failures, increase antimicrobial resistance, and impose heavy economic losses on legitimate pharmaceutical companies and healthcare systems.
Why Are Counterfeit Medicines Increasing?
1. Consumer and Retailer Behavior:
A major driver is the growing consumer preference for medicines offered at steep discounts. Retailers and wholesalers, competing in an increasingly crowded market, often source medicines from dubious suppliers to offer attractive prices. The government caps profit margins for scheduled drugs at 10% for wholesalers and 16-20% for retailers. Any discount beyond these limits should raise suspicion. Unfortunately, many consumers are unaware and prioritize low prices over authenticity.
2. Regulatory and Legal Shortcomings:
The Drugs and Cosmetics Act, 1940, which governs drug manufacturing and sale in India, has not kept pace with the rising threat. While the Act allows imprisonment of up to three years for counterfeit drug offenses, enforcement is weak and penalties are often insufficient to deter offenders. The provision for 10 years’ imprisonment applies only when a patient dies due to fake medicines-a difficult case to prove. This legal leniency emboldens counterfeiters.
3. Impact of GST and Interstate Movement:
The introduction of the Goods and Services Tax (GST) in 2017 harmonized tax structures across states, easing interstate transport of goods, including medicines. While beneficial for legitimate trade, this also facilitated the easier movement of counterfeit medicines across state borders, complicating enforcement and tracking.
4. Inadequate Government Vigilance and Infrastructure:
As per a Parliamentary Standing Committee report, both central and state drug control agencies lack adequate budgets, manpower, and technology to conduct effective surveillance, testing, and enforcement. The Central Drugs Standard Control Organisation (CDSCO) recently identified multiple batches of 63 common medicines failing quality tests, highlighting systemic gaps.
Recent Incidents Highlighting the Crisis
- CDSCO Quality Test Failures: Multiple batches of essential medicines, including antibiotics, cancer drugs, and insulin, failed quality standards.
- Geographical Hotspots: Fake medicines are predominantly sourced from cities like Kanpur, Agra, Delhi, and Patna, then distributed nationwide.
- Retailer Distress: The Bengal Chemists and Druggists Association (BCDA), representing over 40,000 retailers in West Bengal, reports that fake drugs are increasingly infiltrating legitimate retail channels, causing financial and reputational damage.
Government Regulations and the Pharma 300 List
- Profit Margin Controls: To prevent price gouging, the government caps maximum profit margins on scheduled drugs. However, the lure of discounts beyond these caps is exploited by counterfeiters.
- Pharma 300 List: This list includes the top 300 brands of drugs which will have to put QR codes to their packages, in a bid to ensure authenticity and enable tracing.
- Calls for Legislative Reform: Industry bodies and healthcare experts advocate for stricter laws with harsher penalties, improved surveillance, and faster prosecution of offenders.
Modern Solution: Holstik Integrated Anti-Counterfeiting Technologies
As counterfeiting becomes more advanced, with the use of high-end printing and duplication of traditional security features, Holostik is leading the way with integrated, multi-layered anti-counterfeiting solutions. These solutions combine physical security elements with digital authentication for stronger brand protection.
Holostik is DMF (Drug Master File) certified, reflecting our commitment to regulatory standards and quality assurance—especially critical for the pharmaceutical industry. Our R&D labs are also approved by DSIR (Department of Scientific and Industrial Research), reinforcing our focus on continuous innovation and reliable product development.
Physical Authentication Technologies
Overt Features (Visible to consumers without tools):
- Advanced holographic elements: Incorporating multiple diffractive optical elements with kinematic movement effects and 3D visualization that cannot be replicated by conventional holographic equipment
- Color-shifting security inks: Utilizing proprietary nano-pigment technology to create dramatic color shifts at different viewing angles (typically shifting between complementary colors like magenta-green or blue-gold)
- Thermochromic components: Temperature-sensitive ink formulations that reveal hidden patterns or messages when exposed to body heat, providing immediate verification
- Tamper-evident closure systems: Incorporating irreversible mechanical or chemical changes upon package opening, including void-message technology that permanently displays “OPENED” or similar messaging
- Micro-text printing: Incorporating text elements as small as 1/4 point or even smaller, requiring magnification for verification and impossible to reproduce with conventional scanning/printing equipment
Covert Features (Requiring specialized tools for authentication):
- Infrared-responsive inks: Specialized formulations visible only under specific wavelengths of light (typically 850-950nm), imperceptible to human vision and standard imaging systems
- Taggant systems: Microscopic particles with unique spectroscopic signatures embedded within packaging materials or inks, verifiable only with proprietary detection equipment
Digital Authentication Infrastructure
Holstik’s integrated digital solutions leverage multiple technological approaches to create an end-to-end authentication ecosystem:
Product-Level Identification:
- Serialization systems: Implementation of GS1 standard serialized GTIN codes providing unique identity for each individual pharmaceutical package.
- Cryptographic marking: QR codes incorporating asymmetric encryption techniques to prevent duplication or falsification.
Verification Technologies:
- Mobile authentication applications: Our consumer-facing smartphone application, SureAssure, enables instant verification of product authenticity.
Supply Chain Monitoring:
- Geolocation verification: GPS-enabled authentication systems flagging verification attempts from unauthorized geographic locations.
Integration Capabilities:
- API connectivity: Open architecture allowing integration with existing enterprise resource planning (ERP) and warehouse management systems (WMS).
- Data analytics dashboard: Comprehensive visualization of authentication patterns enabling early detection of potential counterfeiting incidents.
Holostik’s unified approach provides pharmaceutical manufacturers with a customizable security architecture addressing vulnerabilities throughout the product life cycle, from manufacturing through distribution to consumer use.
What Can Stakeholders Do?
- Consumers: Always buy medicines from licensed pharmacies. Be wary of unusually low prices or heavy discounts. Use digital verification tools like SureAssure app to confirm authenticity.
- Pharmacists and Wholesalers: Avoid sourcing medicines from unverified suppliers. Adhere strictly to government profit margin caps and report suspicious products.
- Government and Regulators: Increase funding and manpower for drug control agencies. Implement stricter penalties and fast-track prosecution. Promote public awareness campaigns.
- Pharma Companies: Adopt advanced packaging and serialization technologies. Collaborate with enforcement agencies and anti-counterfeiting technology providers like Holostik.
Reach out now to explore how we can help: 📞 +91 9905-124-124 | ✉ marcom@holostik.com | 🌐 www.holostik.com