Security by Industry 2018 ASIS NewsGP0|#3795b40d-c591-4b06-959c-9e277b38585e;L0|#03795b40d-c591-4b06-959c-9e277b38585e|Security by Industry;GTSet|#8accba12-4830-47cd-9299-2b34a43444652018-02-01T05:00:00ZPeggy O'Connor<h4>​Out with the Old, In with the New</h4><p>Have you checked out the new ASIS website,</p><p>Launched late last month, the revitalized site is built with your needs in mind, delivering what you want, when you want it. Gone are the text-heavy web pages, unfriendly navigation, and cumbersome shopping experience. From the top down, all functionality is designed with mobile in mind. </p><p>These strategic design choices along with our new taxonomy and tagging structure will enable quick access to our robust search feature and easy-to-browse navigation. Tap into the expertise of your 35,000+ ASIS peer group in ASIS Connects, our new member-only private community. </p><p>We invite you to visit the site today and explore the host of opportunities to get involved in your global security community. Update your profile at the top-right of the homepage. Indicate areas of interest, add a profile photo, and revisit your communications preferences. January's website upgrade is just the start of a multiphase web update plan. To help inform what the project will look like in the coming months, share your feedback to <a href=""></a>.​</p><h4>What's Ahead for S&G</h4><p>The ASIS Commission on Standards and Guidelines expanded its membership from 12 members to 28 in 2018, on the heels of its first open application process.</p><p>"Over the last decade, the global security standards landscape has changed dramatically," says Sue Carioti, ASIS vice president of Certification, Standards, and Guidelines. "The ASIS Standards and Guidelines Commission understands and recognizes that change is necessary on multiple levels. To that end, the commission took purposeful steps to broaden its membership composition as well as to institute a new and formal membership application process."</p><p>The 2018 Commission on Standards and Guidelines consists of:</p><p>•             Chair Bernard Greenawalt, CPP, </p><p>Securitas Security Services USA</p><p>•             Vice Chair Eugene Ferraro, CPP, PCI, ForensicPathways, Inc.</p><p>•             Charles Baley, Farmers Group, Inc.</p><p>•             Bruce Braes, CPP, Jacobs</p><p>•             Darryl Branham, CPP, Avnet</p><p>•             Herbert Calderon, CPP, PCI, PSP, CCM2L</p><p>•             Robert Carotenuto, CPP, PCI, PSP, New York Botanical Garden</p><p>•             Werner Cooreman, CPP, PSP, Solvay</p><p>•             Michael Crane, CPP, Securisks</p><p>•             Michael Cummings, CPP, Cummings Security Consulting, LLC</p><p>•             William Daly, Control Risks</p><p>•             David Dodge, CPP, PCI, David Dodge & Associates</p><p>•             Lisa DuBrock, Radian Compliance</p><p>•             Tommy Hansen, CPP, Petroleum Safety Authority</p><p>•             Glen Kitteringham, CPP, Kitteringham Security Group</p><p>•             Ronald Lander, CPP, Ultrasafe Security Solutions</p><p>•             Bryan Leadbetter, CPP, Arconic</p><p>•             Ronald Martin, CPP, Open Security Exchange</p><p>•             Juan Muñoz, CPP, Associated Projects International</p><p>•             Angela Osborne, PCI, Guidepost Solutions</p><p>•             Werner Preining, CPP, Interpool Security</p><p>•             Malcolm Reid, CPP, Brison</p><p>•             Jeffrey Slotnick, CPP, PSP, Setracon Enterprise Security Risk Management Services</p><p>•             J. Kelly Stewart, Newcastle Consulting</p><p>•             Timothy Sutton, CPP, GHG Management, LLC</p><p>•             John Villines, CPP, PCI, PSP, John C. Villines LLC</p><p>•             Roger Warwick, CPP, Pyramid Temi Group</p><p>•             Allan Wick, CPP, PCI, PSP, Tri State Generation & Transmission</p><p> </p><p>The new commission holds a diverse range of security expertise. Its 28 members represent eleven countries. Twenty members are new to the commission in 2018, although 21 have served on past technical committees. Furthermore, 24 are ASIS board certified, and 11 are involved with ASIS councils.</p><p>In 2018, the commission will consider the restructure of Standards and Guidelines programs; form static technical committees to address core security risk management discipline areas; review existing standards and guidelines with an emphasis on relevancy and gap analysis; chart a path forward to begin development of tools, guides, and handbooks; and increase integration in knowledge and learning.</p><p>Three technical committees remain busy in 2018, continuing their work developing standards in the areas of security awareness, private security officer selection and training, and workplace violence prevention and intervention.​</p><h4>Lifetime Members</h4><p>John Sullivant, CPP; Larry K. Stanley, CPP; and Michael J. Fagel have been granted lifetime membership to ASIS. </p><p>Sullivant has been a dedicated member for 31 years and has served as chapter chair, vice chair, and membership chair for the Granite State Chapter. He also authored two published articles in Security Management: "Is America Prepared for Today's Threat?" and "Successful Project Planning."</p><p>Stanley has been a regional vice president, an assistant regional vice president, and a member for 25 years. He also served as chair of the Central West Virginia Chapter.</p><p>Fagel has served on the ASIS School Safety and Security Council, the Fire and Life Safety Council, and the Food Defense and Agriculture Security Council. He was presented with the inaugural ASIS Security Book of the Year Award at the 60th Annual Seminar and Exhibits. Fagel has been an ASIS member since 1982.​</p><h4>Lifetime Certifications</h4><p>The following security professionals have been awarded lifetime certification status. </p><p>•             Andre P. Firlotte, CPP</p><p>•             Rickey Gene Nelson, CPP</p><p>•             Joseph F. Frawley, Jr., CPP</p><p>•             Norman B. Taylor, CPP</p><p>•             Bruce R. Sullivan, CPP</p><p>•             Robert Chicarello, CPP</p><p>•             Mary M. Vavra, CPP</p><p>•             William R. Bogett, CPP</p><p>•             Kirk A. McGee, CPP</p><p>•             Mary M. Vavra, PSP</p><p>•             Huan Chiang Lee, PSP​</p><h4>MEMBER BOOK REVIEW</h4><p><em>The Facility Manager's Guide to Safety and Security</em>. By John Henderson, CPP. CRC Press;; 270 pages; $79.95.</p><p>In many smaller organizations—and those focused on cost-cutting—the facility leader may be tasked with overseeing the company's security function. Professionals in this field often come from engineering or mechanical backgrounds, and they may possess limited knowledge and skills relating to the protection of an organization's physical assets. Author John Henderson, CPP, wrote <em>The Facility Manager's Guide to Safety and Security</em> to address that knowledge gap.</p><p>The author drills into fundamental security concepts, explaining not just what to do, but describing the goal of the task—for example, deterrence, incident response, guard force management, and even crime prevention through environmental design (CPTED). Overall, the book serves as a practical handbook for securing any building, with starting points and programs to steer the manager along the way.</p><p>The text guides the reader through the process of conducting a security assessment, determining a facility's needs, and applying practical solutions. Specific areas of security addressed are lighting, access control, fencing, and fire/life safety. Although targeted towards those who manage buildings for their organizations, the text can serve as a practical guide and overview of physical security for anyone in the industry. </p><p>One excellent section in the book is titled "Not Much Happens Around Here." It addresses the complicated issue of convincing executives to spend dollars on costly security initiatives when the consensus is that there are no real concerns. It is always difficult to measure security's effectiveness when statistics don't indicate true security needs. The author points out that conversations with employees can often provide a clearer picture of concerns and needs. </p><p><em>The Facility Manager's Guide</em> will serve as a valuable tool for leaders new to the responsibility of providing an overall safe and secure environment.</p><p><em><strong>Reviewer: Michael D'Angelo, CPP, </strong>is the principal and lead consultant for Secure Direction Consulting, LLC, a Florida-based independent security consulting firm. He served on the South Miami, Florida, Police Department for more than 20 years, retiring as a major. He currently serves on both the ASIS Healthcare Security Council and the ASIS Transitions Ad Hoc Council.​</em></p><h4>CHAPTER ANNIVERSARIES</h4><p>Congratulations to chapters celebrating milestone anniversaries in the last quarter of 2017.</p><p><strong>40th Anniversary</strong></p><ul><li><p> Texas Gulf Coast<br></p></li><li><p> Greater Lexington<br></p></li></ul><p><strong>15th Anniversary</strong></p><ul><li> Southwestern Ontario<br></li></ul><p>​  ​</p> Recovery Century Security and CPTED: Designing for Critical Infrastructure Protection and Crime Prevention, Second Edition. by Design in Abu Dhabi Test’s-Game-Day-Solutions.aspx2017-07-01T04:00:00ZHouston’s Game Day Solutions Executives at Home Integrity Through the Cracks 2017 Industry News: Supporting the Troops Holidays from Security Management Entries Spotlight Innovation Online February 2016 2018 Industry News 2017 Industry News a Security Transition Trends License to Operate Facilities Tackle an Explosive Problem the Shots the Language of Payroll ASIS 2017 Exhibit Hall: An Interactive Learning Lab IV Tests The North American Power Grid Water Risk,-New-Paper-Finds.aspx2017-05-08T04:00:00ZSolar Technology Can Help Secure Military Grids, New Paper Finds Governor Unveils Major School Security Plan In Wake Of Shooting’s-Impressive-Behavior-During-Tragic-Shooting-Shows-Importance-of-Training,-Expert-Says.aspx2018-02-15T05:00:00ZExpert: Students' Impressive Behavior in Tragic Shooting Shows Importance of Training Fatalities Reported at South Florida High School Shooting Technology with a Personal Touch Identity Crisis Review - Business Theft and Fraud: Detection and Prevention Are People First for Help Service: How Security Is Helping Camden County’s Children to Learn from Las Vegas Review: Sports Travel Security,-Expert-Says.aspx2017-10-04T04:00:00ZBag Checks At Hotels Unlikely To Become New Normal, Expert Says 2017 Industry News in Shared Spaces Fine Art and Other Industry News Fight Against Fake Pharmaceuticals Smart Solutions Online Pharmacies to Hurt News June 2017 Evolution of Airport Attacks 2018 Industry News Surveillance Most Resilient Countries in the World

 You May Also Like... Down Retail Theft<p> </p><p>A retailer of hunting, fishing, and outdoor gear, Cabela’s operates 46 stores across the United States and Canada. Those stores generated $3.1 billion in revenue in 2012. Outdoor enthusiasts can also shop via Cabela’s Web platform. The company had more than $930 million in Internet sales last year. Cabela’s robust e-commerce reflects the company’s progressive view of technology, data, and business analytics. Cabela’s asset protection team, headed by Brad Dykes, has also embraced these tools to reduce theft and fraud.</p><p>About five years ago, the asset protection team began using statistics to analyze return rates, shrink, key performance indicators, and other factors, and to use that information to develop more effective security policies and procedures. This multi-year effort resulted in a new protection plan that includes better policies for merchandise tagging and returns, risk profiles of stores to make sure that security solutions are calibrated to each store’s needs, and e-commerce link analysis that has reduced online fraud.</p><p>Tagging<br>Historically, Cabela’s has used electronic article surveillance (EAS) tags to protect some portion of its merchandise from theft. Cabela’s standard practice was to tag more than 60 percent of clothing items. This was a traditional approach, but it was also costly. The asset protection team set out to find out if the practice could be justified on the basis of a cost-benefit analysis.</p><p>The team began an extensive evaluation of the data to determine the correlation between tagging and shrink. One objective was to see whether fewer items could be tagged to save money without causing greater monetary loss via shrink. They used an equation comparing the cost of the goods to the cost of protection and then compared that to the shrink the company could expect if it did nothing.</p><p>Among the findings of the analysis was that while it paid to have a certain percentage of items tagged, some low-priced items did not justify the costs of EAS implementation. However, the analysis was not based solely on price. “Some expensive items just didn’t have a history of theft, so we didn’t tag them. Other less expensive items were easy to resell on the street so, even though they were lower-priced, we still tagged them,” says Dykes.</p><p>The team carefully monitored shrink after the new tagging policy went into effect to make sure that neither shrink nor theft increased. During a one-year period, Cabela’s merchandise protection costs, including the absorption of shrink, decreased by 40 percent.</p><p>Return Policy<br>Before the asset protection team’s review, Cabela’s had a lenient return policy allowing consumers to return almost anything, with no time limits or restrictions. As sales increased, so did the number of returns. By analyzing the data, the team quickly discovered that some portion of the returns arose from people who were “renting” merchandise—everything from $500 fishing reels to $2,700 binoculars—by purchasing items, using them, and then returning them. For example, people would buy a tent for a weekend camping trip or a pair of waders to go hunting and then return the items after the trip was over. The data, as reported by cashiers receiving the clearly used merchandise, also showed that these renters were repeat offenders and that they rarely presented a receipt with their returns. So the asset protection team set out to make changes to the return policy that would reduce costs without harming relationships with good customers.</p><p>One key to the new approach was finding a way to track which customers were abusing the return policy. After researching possible solutions, the asset protection team partnered with The Retail Equation, a retail management consulting firm, to develop a return policy that could catch serial returners. Dykes purchased a service, Verify-2, offered by The Retail Equation that would allow cashiers to check the name of each person attempting to return merchandise against a list of those who had done so before, particularly if they had no receipt.</p><p>Cabela’s implemented a return authorization program that would work with the Verify-2 system. The return policy was changed to say that all returns required a valid ID and that each customer was allowed only a certain number of no-receipt returns. Now, when a customer attempts to return an item with no receipt, the cashier asks for ID and uses the Verify-2 service, via a software interface at each register, to determine how many no-receipt returns that person has previously made. After a certain number of these returns, all subsequent returns are denied, and that person is flagged in the system so that a warning appears to the cashier when a return is attempted.</p><p>According to Dykes, the store still honors all returns that are accompanied by a receipt. “We see the receipted return component as an acceptable risk,” explains Dykes. “We didn’t want to negatively affect our customer experience, and most folks pulling this scam were frequently returning items without a receipt.”</p><p>Cabela’s trained its front-end teams on the new return policies and procedures across all stores and channels. </p><p>The new return policy has been successful. For example, in one case, an individual tried to make a no-receipt return and was asked to produce ID by the cashier. Using the Verify-2 system, the cashier confirmed that the person was ranked as number 9 in the top 25 returners at Cabela’s. Before the person was flagged in the system, he had created losses in excess of $13,000. According to Dykes, within one year of implementing Verify-2, store returns were reduced by 10 percent, saving the company millions of dollars in increased net sales.</p><p>Dykes and his team also offered staff refresher training on shoplifting and theft awareness. In addition, the company implemented what is called cart testing to ensure that cashiers were scanning merchandise properly. In this type of testing, cashiers are presented with challenges. For example, merchandise is hidden inside boxes or at the bottom of the basket and UPC labels are switched for similar products. After ringing up the merchandise, cashiers are coached based on how well they processed the items in the cart and how many errors they uncovered. According to Dykes, this training proved to be beneficial to the overall asset protection program, and the company has continued the periodic training.</p><p>The training program now includes updates on known scams. For example, the company trains employees to check the inside of bulky boxes for stolen items and to ensure that the item that comes up on the scanner is the item being purchased. “The training helps bolster our professionalism,” says Dykes. “And we have new employees and seasonal help that comes in, so there’s continuous training that must occur.”</p><p>Risk Profiles<br>The asset protection team also performed an analysis of the physical security equipment used at each Cabela’s store. This analysis included costs associated with alarms, personnel, security devices, and cameras at each store. These costs were then compared with internal shrink and external crime metrics. Each store was then assigned a risk profile based on this analysis. The profile determined what type of security equipment the store would receive and what policies would apply in that location.</p><p>For the analysis, the team first pulled internal metrics for each store, including trends such as losses. They pulled crime statistics from CAP Index to determine the frequency and severity of criminal activity around the store. The team also benchmarked against the security being used by other retailers in the vicinity of those Cabela’s stores.</p><p>After compiling all of the data, the asset protection team was able to designate each store as a high, medium, or low risk. Each risk level is associated with a specific security plan that designates everything from staffing levels to asset protection measures. The plan has led to a 15 to 20 percent cost savings on physical security over the past two years with no degradation in protection.</p><p>The risk levels allow for a concrete protection plan that is still tailored to a specific store and location. “It’s smarter than a cookie-cutter approach, but we don’t have to do a plan for every store,” explains Dykes.</p><p>The risk profiling is also used in deciding where the company will locate new stores. “Taken overall, we open more stores that are lower risk than high risk,” says Dykes. “But that middle level—medium risk—has the lion’s share of stores. So, by avoiding high-risk stores, we’ve saved money overall.”</p><p>When devising the risk profiles and measures that would accompany them, the asset protection team made one universal change aimed at significantly reducing costs while improving security: it switched all of its analog video systems to digital.</p><p>In the past, it would require 12 DVRs in a room to record the activity from one store, which put a heavy load on the heating and cooling system, among other considerations. Recording digital images, which are housed on a server, removes that problem. More importantly, perhaps, digital images can be searched more easily to obtain the desired footage, saving hours of staff time.</p><p>Link Analysis<br>The asset protection department includes an organized retail crime (ORC) team. The team sifts through data from all aspects of the company using link analysis and other analytics tools to build interconnections and find trends and patterns to identify ORC and the specific individuals involved in it. This has helped Cabela’s keep ORC gangs out of its stores, even shutting down some gangs and facilitating arrests.</p><p>The ORC team gathers data by looking at ORC trends and methods as well as by searching for what’s hot on the ORC market. The team searches for small items that are expensive and can be resold easily, especially online. For example, the team discovered that marine sonar units are a target of ORC groups because the units cost up to $3,000 each and are often resold on eBay. Based on this data, the team flags certain kinds of losses as potential ORC activity. Then, the team cross-references the information with return rates from individual stores. “This helps us develop a picture,” says Dykes. “Is this [an] isolated incident or an ORC activity?” </p><p>If the manager determines that an ORC operation is underway, the manager takes steps to identify the perpetrators and uncover how they are making a profit. Once the manager feels that this information is solid, Cabela’s partners with federal, state, or local law enforcement. “Ultimately, the end game for us is not to just prosecute individuals but to get to the next level and shut the operation down entirely,” says Dykes.</p><p>By using this method, the ORC team uncovered an ORC gang operating in the Dallas market that had stolen at least $85,000 from the company. The gang was caught when a member returned a stolen GPS unit to a Cabela’s store. The GPS unit was stolen using a scam where one person would go into the store, find a cheap item in a large box, put the GPS unit into the box, and mark it in an inconspicuous way, such as with a small dot. Then, several days later, another member of the group would come into the store and buy that box. The gang would then fence that item or return it to the store for a refund.</p><p>Because the ORC manager had flagged the GPS units as a target item for the gangs, the manager looked at the specific GPS unit when it was returned. The ORC gang had actually used the device to make its criminal rounds and the GPS still had the travel history intact. Law enforcement was able to identify retailers within a 60-mile radius as victims of the gang. More importantly, the GPS pinpointed the gang’s home base and allowed police to arrest the criminals.</p><p>Online Fraud<br>In 2012, Cabela’s created an e-commerce component within the overall asset protection team to identify and resolve organized e-commerce fraud. The team quickly identified various fraudulent transactions and used link analysis to connect these transactions to organized groups. Once the team realized these issues were interconnected and organized, they applied new tool sets and rules for processing online transactions. This allowed them to identify potentially fraudulent transactions and either stop the sale or put it through a more detailed review process before accepting the transaction.</p><p>For example, in one typical scheme, a group of criminals in Baltimore set up six computers with unique IP addresses. They then used 100 stolen credit cards to make purchases, being careful to link one credit card to one or two computers, giving the illusion that the purchases were valid. The thieves completed 117 transactions in 90 days, resulting in $100,000 in fraudulent sales. The team was able to shut the gang down after identifying them through their shipping addresses—all of the transactions were going to one set of addresses. The team notified federal law enforcement, which set up a fake delivery truck and had warrants ready as the illegally purchased packages were delivered.</p><p>This is just one of numerous incidents over the past year, according to Dykes. Cabela’s is already seeing a significant financial impact through its e-commerce efforts, which are helping them find and close security gaps. “My opinion is that the advantage is in learning behaviors,” Dukes says. “We need to know how they are taking advantage of our system so we can plug those holes. That’s where we are seeing the biggest return on investment.” </p><p>In addition to these tangible results, revamping the approach of the asset protection department has helped it fit in with the overall corporate environment. “It’s important for the asset protection team to take a business-minded approach as it reviews data and analytics,” says Dykes. “This has been a natural progression for Cabela’s throughout the past few years, and it has helped our team realize significant financial gains for the company.”</p><p>Teresa Anderson is senior editor at Security Management.<br></p>GP0|#3795b40d-c591-4b06-959c-9e277b38585e;L0|#03795b40d-c591-4b06-959c-9e277b38585e|Security by Industry;GTSet|#8accba12-4830-47cd-9299-2b34a4344465 preview: Chemical Emergency Response <div><br> </div><div>​​<br></div><div><br> </div><div><br> </div><div><br> </div><div><br> </div><div><br> </div><div><br> </div><div>​<br></div>In part one of a three-part video series,<em> Security Management</em> gets a behind-the-scenes look at the COBRA (Chemical, Ordnance, Biological, and Radiological) training facility located at the FEMA Center for Domestic Preparedness where civilian first responders can train with live nerve agents and chemicals such as anthrax, ricin, and sarin gas. Download the <em>Security Management</em> app for Apple and Android tablets on<a href="" target="_blank"> iTunes</a> or <a href="">Google Play</a> and check out the March issue for the video.<p> </p>GP0|#21788f65-8908-49e8-9957-45375db8bd4f;L0|#021788f65-8908-49e8-9957-45375db8bd4f|National Security;GTSet|#8accba12-4830-47cd-9299-2b34a4344465 Fight Against Fake Pharmaceuticals<p>​<span style="line-height:1.5em;">Described by experts as one of the most insidious organized crimes as well as one of the most difficult to track, pharmaceutical counterfeiting is a $75 billion industry that is notoriously low-risk and high-reward. Counterfeit medications make up an estimated 10 percent of pharmaceuticals globally, and as much as 25 percent in developing countries. </span></p><p>The World Health Organization (WHO) defines a counterfeit pharmaceutical as a drug that is deliberately and fraudulently mislabeled with respect to identity or source. This means that counterfeits can range from changing the expiration date on a drug’s packaging to altering the raw materials to removing the active ingredients in a medication. The WHO says the extent of the problem is hard to determine since there are no global studies on counterfeit medications, and tracking the drugs from creation to distribution and beyond can be unreliable.</p><p>In November 2013, the U.S. Drug Supply Chain Security Act was signed into law. In an effort to better track pharmaceuticals and share counterfeit information between organizations, the law requires the Food and Drug Administration (FDA) to issue guidance for how pharmaceutical companies should report suspected counterfeits to the government. The law was implemented at the beginning of this year, but Thomas Kubic, president and CEO of the Pharmaceutical Security Institute (PSI), says the reporting requirements are still hazy, and pharmaceutical manufacturing companies are unsure how to comply with the law. He calls the act “a work in progress.”</p><p>But a work in progress is better than nothing, he notes. Although pharmaceutical counterfeiting is becoming more sophisticated and more prevalent, according to the PSI’s numbers, there is a more widespread awareness of the problem, and both developing and Western countries are passing legislation addressing the issue as well as implementing harsher penalties for criminals.</p><p>   Tackling pharmaceutical counterfeiting will take a combination of legislation, federal and state enforcement action, industry and association collaboration, and tracking technology, Kubic explains. “From manufacturer to distribution to the pharmacy there’s a need for folks to be tuned in to what’s going on,” he tells Security Management. </p><p>Following is a discussion of how pharmaceutical counterfeiting has evolved over the past few years and what lawmakers and security experts are doing to combat the threat.</p><h4>A Global Problem<br></h4><p>The counterfeit pharmaceutical industry is attractive to criminals, especially organized crime groups. Criminals can charge near-market prices for big-ticket medicines they’ve counterfeited, which makes it easy to mass produce knockoffs for big profits. India is home to 15,000 known illicit drug factories, which supply approximately 75 percent of the world’s counterfeit drugs, according to the National Crime Prevention Council. </p><p>Medical information services manager and researcher Doug Taylor tells Security Management that the return on counterfeit drugs is 20 times better than heroin.</p><p>“If you’re going to be in the drug industry, you should probably be in the counterfeit drug business if you want to make some real money,” he says.</p><p>Taylor, whose report RFID in the Pharmaceutical Industry: Addressing Counterfeits with Technology was published in November 2014, notes that many countries have weak regulations and oversight when it comes to pharmaceuticals, which makes it easy for criminals to take advantage of the system.</p><p>Vulnerabilities. Following is a look at how counterfeit drug schemes are carried out, why counterfeiting is on the rise, and which victims are hardest hit. Here’s how a drug is created, packaged, and distributed: The chemical compounds that make up the active ingredients of a drug are generally made in India or China due to the low price of raw materials in those regions. The raw materials are made into their formulations—capsules, injectables, creams—either in the country of origin or in the United States or Europe. The drugs are shipped in large quantities to packaging facilities, where they are prepared for distribution. Some pharmaceutical companies handle their own distribution, Taylor explains, while many drugs are distributed to stores and pharmacies via third party organizations. This process can take up to 300 days and involves many countries.</p><p>Taylor says that the pharmaceutical supply chain allows plenty of opportunities for counterfeit materials to enter the main distribution network. </p><p>“Contaminated raw materials can be making their way back into the American supply chain, and there’s very little oversight,” Taylor explains. “So it’s easy for adulterated materials to slip in the supply chain of American or European drugs.”</p><p>Another vulnerable area in the supply chain is the distribution process. Taylor says connected criminals can deposit convincing dupes to be combined with a supply of legitimate drugs.</p><p>“It’s really difficult to tell them apart once they move through the distribution chain because the lots will be so mixed that on the shelf one can be completely legitimate and one can be completely fake,” he says.</p><p>Kubic notes that pharmaceutical theft often precedes counterfeits, as criminals can relabel stolen medications or create dupes to mix in with the stolen drugs and sell them together.</p><p>Knockoff drugs don’t have to enter the legitimate supply chain to be disseminated. Internet and mail-order markets, street vendors, and other backdoor methods allow criminals to distribute dupes straight to the consumers. This is especially rampant in developing regions where medication is typically expensive or hard to acquire.</p><p>Steve Chupa, CPP, a global security director for a major manufacturer, says that consumer goods, such as lotions, creams, and oils, are popular counterfeit items because they’re easy to make and are often sold by street vendors or other illegitimate suppliers. These products are also less regulated because knockoffs are less damaging than pills or injectables. </p><p>“The outcome, if it’s detrimental, is getting red skin,” Chupa says. “They’re not going to kill you.”</p><p>Trends. The PSI is a nonprofit organization made up of 28 research-based pharmaceutical manufacturing companies from around the world. The organization conducts research and works with law enforcement agencies, drug regulatory authorities, and customs officers to try to better understand counterfeiting trends.</p><p>In 2013, there were more than 11,000 reported incidents of counterfeit pharmaceutical activity globally, according to PSI. That’s an 8 percent jump from 2012, and PSI’s Kubic explains that may be due to increased reporting and enforcement efforts. </p><p>There were 317 different types of counterfeit medications discovered in 2013, down from 523 the year prior. “That tells us that to a certain extent the traffickers have shifted their product mix and are looking at more specific medicines in particular categories than they had before,” Kubic explains.</p><p>PSI looks at two sources where counterfeit drugs are prevalent: in stores and pharmacies, and through internet orders or other informal markets. Kubic says he’s seen an increase in the number of counterfeits found on the shelves of pharmacies, which means criminals are targeting clinics and medical offices with higher-priced medications. That’s supported by the fact that more than a quarter of all counterfeit drugs found in the legitimate supply chain were injectables, which tend to cost more. </p><p>Specifically, criminals have increasingly focused on distributing metabolic medication, such as insulin and other anti-diabetic medications, as well as cancer treatment drugs and anti-infectives, like malarial pills, according to the PSI.</p><p>“We saw a shift in trafficker patterns from Internet sales to you and me through spam and e-mails—a shift where the individual counterfeiters and operators were moving toward direct efforts to sell to clinics, doctors, and independent oncology practices here in the U.S.,” Kubic explains. </p><p>Impact. In 2013, Asia and Europe were the top two regions most frequently linked to pharmaceutical crime. However, the PSI, the WHO, and other organizations agree that the percentage of fake drugs is probably much higher in developing countries due to a lack of oversight and reporting.</p><p>“It’s a big problem in the developing world,” Taylor says. “If antimalarials are fake and being distributed to children in West Africa that really need them, that’s a public health crisis.” A report by Malaria Journal states that fake antimalarials contribute to nearly 450,000 preventable deaths every year in Africa alone. </p><p>Chupa says that Africa is the largest consumer of counterfeit goods, and China has been considered the counterfeiting capital of the world. That’s changing, though, as Chinese citizens become more financially successful and demand the real product.</p><p>In places like India, where consumers often have to purchase their own medical supplies before having an operation, counterfeit products are prevalent. Chupa explains that if a person in India is going to have surgery, they receive a list of products to bring with them. They go to a medical supply stores, “which look like hot dog stands in some instances,” he notes, and buy whatever is available.</p><p>“The vendors will say, ‘well, I have this suture, it’ll cost you this much, or this one, which is a lot cheaper.’ And that cheaper one may be a counterfeit. It’s totally up to the consumer,” Chupa explains.</p><p>The developed world isn’t immune to counterfeits, either. Kubic says that when it comes to chronic conditions, it’s hard to tell if a counterfeit medication is in play.</p><p>“If the doctor sees your cholesterol levels are elevated and the medicines don’t seem to be working, they can switch medications and if you’re smart enough, you go to the corner drug store rather than the Internet, and all of a sudden you’re better,” he explains. However, for diseases such as cancer, counterfeit medications can not only prohibit recovery but even worsen the condition.</p><p>“You rarely see criminals who have less of an interest in the impact of their illegal operations and illegal activity,” Kubic says. “Most of the counterfeit medicines don’t kill you right away. It’s much more insidious. You basically don’t get better.”​</p><h4>Anticounterfeiting Measures</h4><p>Despite the prevalence of counterfeit medications in some parts of the world, Kubic has a positive outlook on the steps being taken globally to combat the problem. The U.S. Drug Supply Chain Security Act, for example, requires pharmaceutical firms to add serial numbers to all packages over the next few years, which should aid in tracking drugs through the supply chain. </p><p>Similar legislation and regulation is being applied globally, especially in the countries that need it most: Brazil and Peru have passed track-and-trace legislation; Kenya and Russia have approved harsher penalties for counterfeiters; and countries like Ecuador are giving more funding to anticounterfeiting programs. </p><p>Nonprofits are also taking a more active role. PSI reported that the number of pharmaceutical crime incidents in Africa has jumped by 260 percent thanks to significant reporting efforts by NGOs in the region. Kubic explains that more accurate numbers and increased awareness have spurred many pharmaceutical manufacturers to join international associations and federations, which support educational anticounterfeiting campaigns. </p><p>Taylor advocates for a technological solution. His report goes a step further and recommends that pharmaceuticals be tracked with RFID technology, intelligent barcodes that are tracked by a network system. Currently, most medications are scanned via line-of-sight barcodes, which are relatively easy to alter, Taylor says. </p><p>RFID technology, on the other hand, uses radio waves to transmit information between a tag affixed to the medication packaging, a reader, and a computer. The data shared between tag and reader is comprehensive, allowing the computer to identify which lots are present and where they have been scanned previously, according to the report. </p><p>Taylor acknowledges that the solution isn’t cheap, but he recommends pharmaceutical companies implement RFID technology as early in the supply chain as possible—ideally, by using providers in China or India that have invested in the products. “This will streamline the manufacturing process, enhance transparency in the supply chain, and collect auditable data before the medicines are created,” the report states. </p><p>Product branding can also alert investigators to potential counterfeits. Chupa says that brand protection teams work with engineers to create covert markers on the packaging—either electronic or visible identifiers that will help manufacturers determine whether the packaging is authentic. </p><p>Kubic acknowledges technological and legislative advances in the field are important, but stopping the illegitimate medication before it enters the supply chain is paramount.</p><p>“All of those are pieces of the solution to the extent that you can track-and-trace medicines through the supply chain, and that’s good, but if some doctor orders from an advertisement and he has not vetted who the supplier is, all of those numbers don’t mean much. My view is that while those are elements of the solution, you really need a good enforcement effort.” </p><p>Here’s an example: A small oncology practice with one or two doctors buys $5 to $10 million in medicines over the course of a year. The doctor gets a fax offering those same medications for a discount of 40 percent—that’s a savings of $2 million. The doctor contacts the company, which ostensibly looks like a legitimate supplier, and orders the drugs. But when the medications arrive, the packaging is in Turkish. Most doctors will just assume it’s the same medication with international packaging, and distribute it to their patients. </p><p>“My remedy includes a good enforcement effort at the city, county, state, and federal level,” Kubic says. “We think that’s going to be propagated in other countries where they’re source countries for some of the counterfeit medicines.”</p><p>This has already begun to play out in countries like China, India, and Pakistan. Kubic says he knows the prevalence of major operators from those countries because the governments have been aggressively addressing the issue and working with PSI to conduct seizures and make arrests. Last year, 1,460 people were arrested worldwide for their involvement with counterfeit pharmaceuticals, an 18 percent increase from the previous year, according to PSI.</p>GP0|#21788f65-8908-49e8-9957-45375db8bd4f;L0|#021788f65-8908-49e8-9957-45375db8bd4f|National Security;GTSet|#8accba12-4830-47cd-9299-2b34a4344465