Article

Black and Grey Markets in Healthcare Products: How to Tell Them Apart and Protect Patients Against Them

29 Jul 2021

The grey and black markets for pharmaceutical and healthcare products present a serious problem at a global level. On the one hand, a report by the EUIPO (European Union Intellectual Property Office) and the OECD (Organisation for Economic Co-operation and Development) estimates that the trade of counterfeit drugs moves more than 4,000 million euros per year; and the main places of origin of the treatments that reach the European Union illegally are India, Hong Kong and China.

On the other hand, the COVID-19 pandemic has fostered deals made on the fringes of authorised channels, especially as a consequence of the shortage of protection and hygiene elements in the first months of this healthcare crisis.


Grey and black markets: differences

Even though the black and grey markets both pose a threat from a health perspective, each one of these works differently:

 

  • The black market focuses its business on the sale of stolen, counterfeit or drugs that are not approved by the pertinent drug agencies (for instance, the European Medicines Agency, in the case of the European Union); or leftover doses from non-completed treatments. To summarise, the black market gains a profit with illegal products.


  • The grey market for pharmaceutical and healthcare products feeds from non-authorised imports and batches that divert from the distribution channels that were authorised by the manufacturers. In the grey market, products are not exactly illegal, but they end up being marketed by actors who do not have a relationship with the original manufacturer, which means they have no power over traceability and merchandise control. A common grey market modus operandi is when distributors declare non-existent sales to the pharmaceutical companies in order to obtain additional products at an advantageous cost. Afterwards they divert these supplies to the grey market to gain greater benefits, taking advantage of exchange rates, tax conditions or better financial circumstances in the receiving territory.


The products obtained through these methods are often sold via Internet channels by retailers that do not offer any legal guarantees. To attract buyers, they advertise the product with a price that is much cheaper than the usual standard. Or, they may also drive up the prices in high-demand situations when the product is scarce.


What risks do the grey and black markets pose in the field of healthcare?

The black and grey markets in the field of healthcare pose certain risks for the involved actors:

  • To the patients, because they are unprotected as customers when they buy products without the proper certifications. This danger is even more marked in the case of products that came from the black market, since their use could be harmful. 

  • To the pharmaceutical companies, because they face financial losses and damage to their reputation. 

  • To the governments, because of the loss of  tax revenue from these products.



How to know if a healthcare product comes from the black or the grey markets? 

As well as the price, the appearance of a healthcare product can give some clues to the healthcare manager and the consumer about its possible origin in the grey or black markets. A packaging that is different to the usual is a red flag that must be taken very seriously. The container must be carefully inspected to find instructions and leaflets in foreign languages, modified logos, the lack of an identifying code, or signs of manipulation. Above all, one must pay close attention to any evidence of tampering or opening, which means the product has not arrived intact to the end consumer and that the supply chain has been interrupted. 


It is also advisable to consider the provider’s transparency, and the information they disclose about traceability and payment safety. In this regard, a way to cast aside any doubts is the individualised identification of each drug with Data Matrix codes, which can be verified by the chemists before dispensation.


Pharmaceutical packaging solutions for the patients’ protection

The pharmaceutical industry has several weapons to combat the grey and black markets, and thus protect the patients by giving them the necessary tools to tell counterfeit from authentic drugs or healthcare supplies. One of them is the introduction, since this past 26th of May, of the UDI system (Unique Device Identification) for the individualised tracking of healthcare products within the EU. This means manufacturers must assign a unique UDI code for each product before releasing it to the market, according to regulations from the European Commission. The UDI code must appear on the tab and on each upper level of the packaging. 


On the other hand, choosing the most appropriate pharmaceutical packaging helps ensure the safety of the medical treatments with carefully placed details such as serialisation and anti-counterfeit measures.


  1. Serialisation

Pharmaceutical packaging serialisation is a widespread measure to fight fraud at an international level. At Essentra Packaging we propose personalised solutions for the pre-serialisation of folding cartons, adapted to markets such as Europe, China or Russia. The delivery of pre-serialised packaging makes the process easier for laboratories, which in turn saves time and production costs. 


  1. Anti-counterfeit measures

Additionally, there are anti-counterfeit measures in the pharmaceutical packaging’s design, with visible and invisible solutions. Among the latter we include options such as the use of reactive inks or hidden holograms, as well as the addition of encrypted information. Among the options visible to the naked eye are personalised and thermochromic inks, holograms or pearlescent effects.


Protect your brand and your patients against the risks posed by the healthcare products from the grey and black markets by using the safest packaging. Trust in Essentra Packaging’s extensive international experience as a specialised provider of pharmaceutical packaging that is approved, tamper-proof and adapted to the different regulations in each country. Contact us and tell us about your needs, we are entirely at your disposal!