Counterfeit products fill black markets all over the world. However, counterfeit drugs pose a unique danger to both public health and the business model of pharmaceutical companies. No business in the pharmaceutical industry can afford to ignore counterfeit medications.
Here are five ways that fake drugs hurt your brand and endanger your business.
1. Puts Your IP at Risk
You already know that your intellectual property (IP) is your most valuable asset. In many ways, every pharmaceutical company is really an IP company. You make money based on your patents, and your copyrighted and trademarked brand names and marks.
Counterfeit drugs dilute your brand, put your patents at risk, and may expose your most important trade secrets.
You have no control over what counterfeiters are doing with your good name and corporate marks. You run the risk of your brand name becoming more associated with fake products than with your safe, authentic medications.
2. Increases Litigation Liability
Every medication has side effects. Each side effect creates at some risk of litigation. Pharmaceutical companies are used to managing the risk of product liability and negligence lawsuits.
However, counterfeit drugs open your company up to a significantly larger number of lawsuits. Counterfeit drugs are often much more dangerous than the authentic versions of the medicine. However, patients often have no way of knowing if they are taking a fake drug or the real deal.
If your business isn’t doing enough to curb counterfeiters, you can become liable for the harm counterfeit drugs do to patients.
It would only take a handful of tragic incidents involving your brand and counterfeit drugs for litigation to ruin your brand and business model.
3. Hurts Brand Loyalty
Many companies continue to profit off of their premium-priced drugs, even after a generic version is available because of brand loyalty.
The goodwill you have earned with your patients, doctors, and pharmacists is incredibly valuable.
Every counterfeit drug that is created and sold undermines that brand loyalty. Fake drugs tarnish your reputation for safety and quality.
When someone’s loved one gets sicker or even dies because of a counterfeit drug, they are going to associate that outcome with your drug, not with the nameless counterfeiters.
Even when there are no horrible health consequences to taking a counterfeit drug, it still dilutes your brand. People stop associating the brand name of your drug with your business. They no longer care about the source of their medication, they just look for the best price, even if that means paying pirates.
4. Creates Price Confusion in Marketplace
Counterfeit medications will always be cheaper than your offerings. Criminals have lower overhead since they don’t have to do any research and development, obey labor laws, or pay taxes.
In many markets, patients are not sophisticated enough to understand the reasons for stark price differences between counterfeits and authentic medications.
This creates price confusion among consumers. Many people will always choose the cheaper option when faced with price confusion, assuming that both drugs are the same.
This confusion is even greater when counterfeits are being sold with fake versions of your brand and commercial marks.
5. Erodes Trust with Medical Professionals
For most drugs, pharmaceutical companies rely on partnerships with doctors and pharmacists to make sure patients are getting the right medications. If large quantities of counterfeit versions of your drugs are in circulation, it can erode the trust that these medical professionals have in your company.
They may feel like you are not doing enough to protect their patients. Because these professionals also have brand loyalty, losing their trust can harm your long-term sales prospects across your product line.
Counterfeit drugs are public health danger and a direct threat to your business. It’s critical that you do everything you can to eliminate counterfeit versions of your products.