Kezzler has created a unique programme which helps in eliminating counterfeit drugs. Dr Avi Chaudhuri, Chief Business Officer and Head of India Operations, Kezzler talks about the programme, its USPs and more, in an interaction with Usha Sharma
Counterfeit drugs are a big challenge in the pharma sector. What are your solutions to counter this problem?
Kezzler has a diverse set of solutions to meet virtually every brand protection required for the pharma sector. Broadly speaking, our solutions can be divided into two areas.
The first solution is consumer empowerment. Kezzler was the first company in India to set up a robust point-of-sale (POS) verification system to empower consumers to authenticate their medicine right after purchase. Each saleable unit protected by Kezzler contains an encrypted alphanumeric code generated by our patented cryptographic algorithm. The consumer can text the code to a dedicated number or scan the 2D barcode on the medicine packs. Either way, a verification message arrives on the handset immediately, providing both assurance as well as any other pertinent information that the brand owner wishes to transmit.
The second solution that Kezzler offers is aimed at the brand owner. The idea is to empower them via their own personnel to survey the market place in order to find and document instances of counterfeit medicines.
Over the years, we have developed a large set of tools and technologies to assist our customers and to ensure that their brands are fully protected. It is our view that the fight against counterfeits must be a shared cause. On the one hand, consumers need to be encouraged to verify their purchases, but at the same time, the brand owner must undertake robust initiatives on their own to combat this menace and protect the equity of their brands. We provide a highly customised set of solutions that are tailored to each individual client in order to meet their risk mitigation objectives.
How effective is Kezzler’s technology ‘PASS’ SMS? How is it designed to suit the pharma sector?
The Kezzler PASS programme with Pfizer is a great success story that is now being expanded to more products and territories. We currently protect some of the biggest and most important drugs for Pfizer, including Viagra, Lipitor and Norvasc. In order to protect its consumers and the brand, Pfizer had experimented with different solutions over the years, all well documented in the public domain. Pfizer then relied on Kezzler’s global experience of more than a decade in combating the counterfeit menace to put together an exceptional solution, with fantastic results. The Kezzler programme was launched a couple of years back based on a unique tamper-evident label with our encrypted security code and various other protective features.
The combination of technologies that we brought to bear on this programme representing both consumer empowerment through POS verification as well as trading partners throughout their supply chain, has resulted in substantial escalation of genuine sales, providing an excellent return on investment (ROI). Most importantly, customers are no longer being duped into buying fake medicines.
What is the USP of your products? Are they cost effective solutions as well?
There are two broad areas that encompass our unique selling point — technology and service. In terms of technology, one of our USPs concern code security. The unique identifier (alphanumeric security code) that we apply on each product is created by our patented cryptographic algorithm. The most important aspect of this platform is that none of the codes generated by our algorithm are actually stored in a database for future look up. Instead, when we receive a code for validation from a consumer, agent or inspector we simply run the algorithm to determine if the code was generated by us. If so, the validation test passes and the code (along with the product) is determined to be genuine. The absence of a database means there is nothing to hack and no data to steal. Imagine a situation where a database gets hacked and the data is stolen. It would represent a public relations nightmare for the owner, something that actually happens quite frequently. This is a critical reason why seven of the top 10 global pharma companies rely on Kezzler to protect their brands and consumers. The absence of a database in the Kezzler environment also means that the number of products we protect can be infinitely expanded. Hence, programme scalability represents a second core USP of the Kezzler platform. Even a mid-sized Indian pharma company creates many millions of consumer units each year. Given the fact that all this data needs to be maintained for several years, it can easily be seen that expansion limits will quickly creep in with standard database formats offered by all other companies. The Kezzler platform can even accommodate security coding down to the individual tablet level so that expansion to trillions of unit codes is fully possible. Our clients will never be constrained by code delivery capacity or validation limits.
A third technology-related USP concerns system performance. By not having to rely on a database to look up a particular security code at the time of validation, we are able to bypass the prolonged search times that occur with large database systems. We just run our algorithm to decrypt a code when it hits our servers and therefore the response time is in the order of milliseconds, whether we have generated five thousand or five billion codes for a client. The last thing a brand owner will want is to test their customers’ patience by having them wait intolerably to discover whether they have a genuine product in their hands.
The second broad area of our USP is with regard to service. As an engineering company, what we love to do most — and what we are best at — is customising our offerings for the specific needs of our clients. It would be accurate to say that all our clients in India rave about the ‘Kezzler service’. But it all starts long before the programme rolls out. There are no two clients that have exactly the same requirements — their products are different, their brand protection strategies are individualised, and each has a different long-term vision. We work with each company to tailor a custom-designed solution that fits their risk mitigation objectives and requirements. We are often told that we are the only company in this space that has the global knowledge of best practices combined with the technological capacity to deliver winning solutions. And that to me is our core USP because after all, our customers must be satisfied with the outcome.
And yes, Kezzler does all of the above in a most cost-effective manner. We are a benefit-driven company that operates on a competitive cost scale to create an outstanding value proposition. The resulting ROI is perhaps our most endearing USP.
What is your experience regarding the deployment of serialisation in India’s pharma industry?
We see two types of pharma companies in India. One that is value-driven and another that is purely cost-driven. The companies in the second category want the cheapest solution, period. On the one hand, I can understand the necessity to be economically sound and not pay more than you need to, especially in a competitive climate. However, an outlook that is purely cost-centric in my opinion creates a myopic vision of running a business because the long-term economic benefit of having a ‘good’ solution rather than the ‘cheapest’ solution is then thrown out the window. Many pharma companies are discovering the folly of this approach because the regulatory requirements are becoming ever more demanding. Furthermore, their competitors in the pharma space who decided to proceed with a value-driven approach are able to take advantage of innovations and best practices in our field that low cost solution providers simply cannot deliver.
The gain perceived by companies taking the cost-driven approach is short-lived and quickly leads to major problems. There are many examples, but I will give just one here as an illustration. The Directorate General of Foreign Trade (DGFT) programme initially required a mere unique serial number on a package for it to leave India. That is simple enough and therefore many Indian pharma companies chose to adopt very low-cost solutions without thinking of the expanding requirements ahead. Well, now that time has come. The DGFT recently introduced a significant new requirement — the so-called monocarton rule — along with additional procedural mandates that are to be introduced in early 2015. Furthermore, the growing list of countries with stringent new regulatory demands for pharma exports will impose a whole new set of challenges. The low-end vendors are simply not capable of meeting all these new regulatory demands, leaving their clients struggling to find alternative solution providers that have the technology, experience, and expertise to help them.
So, an interesting dynamic is emerging in India. Cost-driven companies are now discovering that they need to join their peers in the value-driven group. And that is good for us, because that is exactly the space Kezzler is in, and where we firmly want to be.
Do you think there will be rapid growth in the serialisation process in Indian pharma ? How well prepared is your company to tap this opportunity?
There will be an immense growth in Indian pharma serialisation starting in 2015, due to both export regulations and domestic business practices. The DGFT monocarton rule will create a many-fold expansion of the items that need to be serialised before leaving India. Latin American countries (Brazil and Argentina) have serialisation due dates starting as early as 2015. The 28 countries comprising the EU will require pack-level serialisation by 2017. And you can throw into the mix various other countries (Korea, Saudi Arabia, etc.) with fast-approaching deadlines, as well as various new countries we are aware of that will make announcements very soon. Consequently, Indian exporters need to get their serialisation programmes fully into gear right away so that they are not frozen out of these plum markets.
On the domestic front, we are seeing very good movement among our own clients and many new ones as they seek to protect their customers and preserve their brand equity. But it’s a lot more than just risk mitigation. Unique product coding provides an excellent way for a brand owner to connect with its customer on a one-to-one basis directly through the mobile handset. We offer a large set of very exciting programmes that capitalise on this connection, which are all custom-made for the unique requirements of each client.
I believe that Kezzler is exceptionally well prepared to tap into all of these opportunities. We have been in India since 2006 and in fact introduced the very concept of serialisation to the Indian pharma industry. In the early days, people would often wonder why is this fellow telling me to put a number on my product. Serialisation has become a mainstream concept since then and with its universal acceptance now as the best way to protect people and products, many Indian companies are turning to us. Most of our new customers come to us by way of referrals from many of our happy clients. And quite often, someone will move from one company to another and discover the serialisation problems unfolding there, and then point out that the Kezzler solution at their previous company runs like a Swiss watch.
India’s DGFT has postponed the implementation of barcodes on primary packages a couple of times. How will this move affect the industry?
A major initiative such as the DGFT programme will necessarily require postponements. In the past, I believe the postponements were helpful for the concept to settle in and for companies to think through how best to move forward. But we are now at a tipping point. Even if there is a postponement on the monocarton rule, which I predict will not happen, the industry simply cannot wait because of the regulatory demands outside of India and the mere fact that so many companies are moving rapidly forward. If you are not doing it yourself then your competitor is, and therefore you are already behind in terms of protecting your products in the wider global market.
As for the primary products, such as blisters, strips, etc., I am of the opinion that unless these represent the saleable consumer unit in the export market, then they should not be serialised at all. In nearly all cases, exported blisters and strips are placed in a monocarton (or polypack) because unlike the situation in Indian pharmacies, the vast majority of medicines in overseas markets are contained in a monocarton. Therefore monocartons absolutely need to be protected; otherwise, the DGFT programme itself would have a huge design flaw. The bottom line is that blister and strip serialisation (primary level) should be scrapped because it is not needed and would actually be very difficult and costly to implement for the Indian pharma industry, especially the SMEs. I therefore hope the delay for security coding of primary-level products is permanent. The only exception is bottles that are sold as such. This is classified as a ‘primary’ and yet if not placed in a monocarton, then it represents the saleable unit. From a consumer interaction point of view, this is no different than a monocarton and therefore should be protected.
How many pharma companies have adopted this technology?
Serialisation as a technology strategy is now widely adopted among exporters, due almost entirely to current and emerging regulatory demands. On the domestic front, the main driver has been risk mitigation, although we are seeing more and more excitement over our consumer engagement and data analytics offerings. From a risk mitigation point of view, our programmes have been immensely successful.
For example, the Swiss drug giant Roche made a painful discovery about 10 years back that counterfeit variants of their oncology drugs were surfacing in India. They engaged Kezzler as early as 2007 and we put together a terrific programme for them that empowered both consumers and clinicians. The programme was so successful that no further instances of fake Roche products were seen in India. And if you think about it, there was a very committed counterfeiter out there who had gone to great pains to create an artificial product with absolutely no therapeutic value, and which was being sold for thousands of rupees. However, these criminals did not even dare take the chance of replicating our technology for the simple reason that they knew we would have caught them. So the result was that counterfeit oncology drugs moved out of India and started surfacing in other markets, all the while Indian cancer patients were fully protected.
The case with Viagra represents another such success story, though obviously with a very different drug. The growing presence of fake Viagra represented a worrisome problem for Pfizer, both from a healthcare perspective as well as its business operations. Kezzler created a unique programme as discussed earlier, which again resulted in the elimination of counterfeits from those markets where our technology was applied. Consumers are now protected and the brand owner is deriving significant ROI from revenue growth through sales of the genuine product.
How can this technology help brand image and scale up profitability?
We believe information exchange has great value for brand owners and consumers, allowing for a real time dialogue and the beginning of a deeper relationship.
We are seeing a lot of creative brand managers who are able to harness both the power of serialisation and the exponential growth in mobile communications. As an innovation-driven company, Kezzler is constantly coming up with creative new ideas on how to capitalise on this technology to bring greater opportunities to brand owners and most importantly, to the vast numbers of people out there who crave information and value. Simply put, those brand managers that can take rapid advantage of the powerful new opportunities in mobile communication, consumer engagement, and informatics-driven product branding will increase their brand value and profitability. And Kezzler helps them create outstanding new programmes to drive their business.
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