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Gray markets in pharmaceuticals remains a perpetual headache for stakeholders – The issues of drug abuse and addiction are not peculiar to just a few select countries; these are global problems faced by all countries of the world and incidentally, majority of these drugs are obtained from illegal black markets.

There have been issues of counterfeit drugs in both the developing and developed worlds; and in no less a place like the United Kingdom just a couple of years ago, there was the fake Xanax debacle which remains a big scar till this day.  Observations made by pharmaceutical and industry experts show that it does not matter if a drug is legalized, over-the-counter approved or if it is prescription only, once there is a high demand, there is usually a proportionate tendency for the proliferation of its counterfeits, thus keeping counterfeiting criminals in business for as long as foreseeable.

Beyond the diversion of legitimate medication from pharma supply chains, gray markets also encourage the criminal activities of counterfeiters which leads to heightened concerns for the health of patients.

Insights into Pharmaceutical Gray Markets

Gray markets refer to the situation where functioning or legitimate medication is diverted from legal distribution channels into illegal channels which are not authorized by the manufacturer. The motivation for the diversion of these drugs is mostly from the pricing point, and this is sometimes encouraged by supply challenges that occurs with different geographical locations.

A drug like Xanax (one of the most popular anti-anxiety drugs) which was in the middle of a diversion scandal in the United Kingdom (UK) just a couple of years ago is a perfect candidate for gray market actors; the drug is relatively highly priced and also tends to be regularly scarce on the market.

A probe into the Xanax diversion issue shows that even in the case of the UK where there is a highly regulated market, the availability of a drug in high demand only via prescription creates a void; This void then spurs the creation of a gray market where criminals seeking to make a quick buck exploit, thus leading to the diversion of the drugs and subsequent sale outside of the approved channels.

Gray markets are sometimes so sophisticated that manufacturers and regulatory authorities have a really hard time tracing them and in order to curb the harmful effect of unprescribed ingestion it has on the end consumer. Majority of the time, consumers of gray market drugs are unaware of the fact that the purchase they made was from outside of the legitimate supply channel; they are usually unable to ascertain that the proper level of care in terms of handling, temperature and storage was adhered to.

Mitigating the Harmful Effects of Gray Market in Pharmaceuticals

Consumer education is a key step in taking the fight to criminal minds that help gray markets thrive; It is important that key pharmaceuticals stakeholders (manufacturers and regulators in particular) take proactive steps to educate consumers on the dangers of using medication purchased outside of the legal channels.

Additionally, pharmaceutical companies would have to make deliberate efforts to apply the use of modern technologies to help fight the gray market menace. There are high level anti-diversion solutions like those provided by Cypheme which ensure that the GPS position of products can be tracked as soon as they are scanned – this provides manufacturers which the much-needed information as to whether or not their products have fallen out of legal distribution channels. The anti-counterfeit solution provided by Cypheme has been enabled with covert properties that ensure product tracing within the supply chain so that manufacturers are able to quickly detect diversion of goods. This equips manufacturers with the knowledge of diversion points within the supply chain

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