Online-obtained drugs may be hazardous to health

The abuse of brand names in online sales of pharmaceuticals is nothing short of shocking, says Frederick Felman, chief marketing officer for brand-protection specialist MarkMonitor . MarkMonitor’s online solutions automate workflow and assist companies in creating, monitoring, and protecting their brands wherever they may appear on the Internet.

“We didn’t know it would be that interesting, but what we found was startling,” Felman says. “The scale of abuse floored me, [and the slack in] business practices throughout the entire supply chain—not just those selling direct to customers, but to pharmacies—was beyond anything we anticipated.”

MarkMonitor regularly targets an industry sector to research and highlight in its quarterly Brandjacking Index report. The August report reviews the counterfeit/gray market for popular prescription drugs. MarkMonitor focused on six leading brands across a spectrum of treatment regimes, and segmented between top sellers and those most frequently searched online. The online monitoring of the six drugs was conducted over a four-week period in June.

“Criminals show remarkable adaptability as they take advantage of the Internet to hijack well-known brands.”

—Frederick Felman, chief marketing officer, MarkMonitor

“These are sophisticated marketers; they’re not mom-and-pop operations or some guy in Afghanistan,” Felman says. Using MarkMonitor tools, the company searched billions of Web sites and processed more than 60 billion spam email solicitations. MarkMonitor looked at 110,000 spam landing sites, where responses to solicitations get directed. It’s clear with many of these, Felman says, “They are evaluating different marketing concepts to see which ones are most effective in drawing traffic.”

Of the 3,160 online pharmacies MarkMonitor researched—only four of which were legitimately certified to do business in the United States—985 actually post Alexa ratings for their sites, which comprise an industry-accepted barometer for site traffic. “The average traffic among these 985 sites was 32,000 daily visits, which is huge. Ten percent clearly stated that no prescriptions were necessary.”

It’s difficult to discern legitimate sites from illicit ones. Many pharmacies claim to be in North America, but are hosted in China or Russia or elsewhere. Many move their hosting sites and change their domain names frequently. Some post fake certification from national board certifiers. The tip-off usually is the steep discount that counterfeiters or gray marketers offer—some as high as 75 percent. MarkMonitor estimates that from the 985 of the 3,160 sites that post Alexa ratings, ill-gotten gains total $4 billion annually.

Illegal online sale of counterfeit or gray market goods is growing in every business sector, with pharmaceuticals not even the greatest market at risk, according to MarkMonitor. Automotive parts is the fastest growing, while consumer electronics is suffering the largest bite, at 20 percent.

“Criminals show remarkable adaptability as they take advantage of the Internet to hijack well-known brands,” says Felman. “Brand holders are left with the incredible burden of preserving the integrity of their brands and protecting their reputations, revenues, and customers.”

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