Fighting Illegal Drugs with a Text Message

You walk into a pharmacy, hand over your prescription, and your pharmacist gives you your medicine—you have faith that what you receive are safe, quality drugs that will help you get better. Why would you even think otherwise?

Turns out, you may have too—with 75 billion dollars worth of counterfeit drugs being exchanged, purchased, and sold every year. Counterfeit packaging is so similar that side by side, you can’t tell the difference. The counterfeit medicine looks so much like the real thing that it takes a magnifying glass to see slight errors in the name. Even the logos from pharmaceutical companies, like Pfizer, Johnson & Johnson, and Merck are lifted, with such accuracy that the copy is not discernible to the naked eye. Recognizing a big problem—with huge potential for social change, 2008 Echoing Green Fellow, Nathan Sigworth, launched Pharmasecure.

According to the World Health Organization, 25 percent of medicines consumed in developing countries could be counterfeit or substandard. A $200 billion industry, counterfeit drugs cost little to manufacture and clearly result in huge profits. A raid last year in Lima, Peru uncovered hundreds of thousands of crude prescription drugs, and underground labs in Canada and the United States simply drop their counterfeits in the mail.

India is particularly vulnerable in this illegal “drug trade” since manufacturing is nearly 40 percent less expensive than most other countries. There are significant economic implications here—many pharmaceutical countries are turning to India because manufacturing is so cheap, but if they cannot stop the counterfeit drugs, the pharmaceutical companies face a significant loss in credibility. Bad drugs also, obviously, mean that people can die—but there is an important nuance here that we also shouldn’t forget. Trust has incredible power in public health; it takes a long time to cultivate behavior change and positive reinforcement to maintain. If it is lost or tarnished, the positive effects can take many steps back.

Most of the efforts to protect distribution of drugs have focused on expensive drugs in the most developed countries. But, it is often the inexpensive drugs that have the highest incidence of counterfeiting. In India, a 2007 study by Dr. Prafull Sheth found that while suspected counterfeit drugs that were priced less than 20 rupees (40 cents) made up 5.2 percent of samples, while suspected counterfeit drugs drugs priced above 500 rupees (10 dollars) had an incidence rate of 1.7 percent.

When a drug is suspected to be counterfeit, the process to get it tested is slow and expensive. With price sensitive markets, preventative measures have been unaffordable until recently. Today Indian companies are turning to PharmaSecure for drug authenticating services. Harnessing the growing power of SMS technology, PharmaSecure’s psID platform serializes each package. After purchasing a drug, a consumer texts a unique code to a phone number, and receives an immediate message in return about the safety of the drug.

PharmSecure began by protecting $1 million worth of drugs distributed to several hundred thousand consumers. Today PharmaSecure protects the distribution of 70 million consumer packages worth over $67 million. This includes over 30 million life-saving Tuberculosis medicines.

Over the next year PharmaSecure has agreements to provide serialization on over a billion pharmaceutical packages, being distributed to many of India’s export markets. They are a team of thirty people, with sights on hiring many more to support a fast-growing company. To support their growth, Pharmasecure recently closed a multi-million dollar round of investment, from Eric Schmidt’s Innovation Endeavors, Gray Ghost, Healthtech Capital and the TEEC Fund—one of the largest rounds of funding any Echoing Green Fellow has raised.

PharmaSecure wants to see serial numbers on everything—and to close the gap between consumers and manufacturers. For public health, their mobile application has huge benefits. With a database on where drugs are being distributed and where people are taking them, PharmaSecure can track trends and even map patterns globally. But, consumer verification isn’t just for pharmaceutical drugs—what about meat, dairy, produce, organic? Could an SMS prevent the next food illness panic?

PharmaSecure recognized a really big problem and is addressing it with a technology that is accessible to a regular consumer and a big pharmaceutical company. Investors believe in the solution and public health could reap enormous benefits. Nathan and his team live in India, working on the ground to understand the nuances of counterfeit drugs in India. It is social innovation, social enterprise, and development that is compelling, and may lead to change on a global level.

On a personal note, Nathan recently shared two pieces of advice for other social innovators: pace yourself, and hire great people who have a passion for the work, and want to have a little fun, too.

Photo credit: SRxA

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