@Risk

The US Pharmacopeial Convention (USP) has proposed a set of recommended best practices to help the pharmaceutical industry improve supply chain integrity and reduce risks of counterfeit or mishandled medicines.

Improvements like these are long overdue. As I reported last spring, research from PwC concluded that many pharmaceutical supply chains have suffered from what amounts to benign neglect. As a result, they are inefficient, under-utilized and ill-equipped to cope with new medicines, cost pressures and health reform expectations.

Sure, in today’s global economy relationships between suppliers and other business entities are often opaque and difficult to track, but clearly, it’s time for the pharmaceutical industry to step up to better ensure that medicines can be traced back to their original manufacturer, are not adulterated or counterfeited and are transported to their intended destination with their quality intact.

Too many companies have discovered the hard way that “willful blindness” only increases their culpability in the eyes of Federal agents, regulators who now are cracking down on businesses that aren’t compliant with the Foreign Corrupt Practices Act (FCPA).

Don’t take that kind of risk. Resolve that this is the year to start better managing your multiple supplier master databases as you monitor and mitigate supplier risk in a global operating arena.

“There is incentive for all players in the pharmaceutical industry—large and small companies, regulators and standards-setting bodies—to come to some agreement on hotbutton issues such as track and trace technology and, at the larger level, to codify what constitutes a solid, universal approach to global supply chain integrity,” said Praveen Tyle, Ph.D., chief science officer for USP.

USP’s proposed standard covers four main areas: (more…)

The US Department of Defense has concerns about counterfeit parts in its supply chain and is now taking additional steps to ensure that its equipment and parts are authentic.

According to the American Forces Press Service, the DOD has implemented a quality assurance process to identify material that doesn’t conform to standards and determine which ones are counterfeit.

For the DOD, most of the problem appears to center on previously used parts sold as new. As Senator Carl Levin (D-Mich.) explains in a statement:

In some industries, the term “counterfeit” suggests an unauthorized fake, a knock-off of an original product. The definition of counterfeit, as it relates to electronic parts, which has been endorsed by the Department of Defense and defense contractors alike includes both fakes and previously used parts that are made to look new, and are sold as new. Previously used parts sold as new parts present a significant risk because, while they may pass initial screening, they are far more likely than new parts to exhibit reliability and performance problems later on when deployed in the field.

Sen. Levin chairs the Senate Armed Services Committee (SASC) which this year began an investigation of counterfeit electronic parts in the DOD supply chain. In his statement, made at a SASC hearing last week, he goes on to describe how e-waste is shipped into Chinese cities like Shantou in Guangdong Province where the electronics are disassembled by hand. Then, they undergo a sophisticated unsecured counterfeiting process. Again, from Sen. Levin: (more…)

Despite growing awareness and appreciation of the risks of non-compliance, only about one in four companies feel ready to meet the requirements of the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA), according to new survey results from Kroll Business Intelligence and Investigations.

The study, which polled more than 1,200 senior executives from a broad range of industries worldwide, found that:

• Just 27 percent of survey respondents said they are well-prepared to comply with FCPA and UKBA.
• Of those companies subject to these two laws, just  43 percent have trained senior management, agents, vendors and foreign employees to be compliant with one of these laws. Even less (39 percent) have assessed the risks arising from them.
• More than one-third (37 percent) believe their due diligence provides a sufficient understanding of a potential partner’s of investment target’s compliance with these acts.

Clearly, companies need to step up their game. Not only are the risks of non-compliance quite serious (and getting more so), but fraud is on the rise. Knoll’s new research also showed that: (more…)

Losses from shoplifting, employee or supplier fraud, organized retail crime and administrative errors (also known as “shrink”) increased last year, rising to their highest levels since Checkpoint Systems, Inc. began tracking global retail theft in 2007.

Overall, Checkpoint Systems found that shrink in 2011 cost the retail industry 1.45 percent of sales –which translates into a whopping $119 billion.

Here are a few more highlights from this year’s Global Retail Theft Barometer : (more…)

New research from OpSec Security, Inc. reveals that counterfeiting has expanded beyond high cost health and beauty products, such as luxury fragrances, into everyday personal care items, such as toothpaste, shampoo and nail polish.

Obviously, these fake goods extract an enormous economic toll, pose a threat to brand reputation and present a serious risk to consumer safety, as well.

OpSec used its proprietary internet monitoring platform to identify listings of health and beauty products on business-to-business (B2B) trade boards and business-to-consumer (B2C) trading platforms within the following categories: mascara, nail polish, shampoo, razors, men’s cologne and women’s perfume. By monitoring the key Suspicious Behavior Indicators characteristic of dubious sellers, OpSec found that: (more…)