While the use of dangerous chemicals in counterfeit pharmaceutical and cosmetic products is not a new issue, the threats to human life and a brand’s reputation remain as critical as ever. Especially given how complex and vast the counterfeit market has become in recent years.
In fact, as many as 50 percent of pharmaceuticals bought online are considered fake. Within the FMCG market, 27 percent of cosmetics sold are counterfeits. Compounding the problem further is the lack of consumer understanding about counterfeits, including how to spot them, because as little as 5 percent are aware of fakes.
Innovation in labelling and artwork management has, however, created a light at the end of the tunnel. Brands can now utilise automated software solutions to update labels instantly and incorporate creative features that help distinguish hard-to-spot fakes.
The attraction of counterfeits
Over recent years we’ve seen a dramatic increase in online spending and an inflated cost-of-living, driving some consumers to choose alternative products because of their cheaper price tags.
Fraudsters have also capitalised on the increasingly complex nature of the global supply chain, knowing that – in reality, businesses find it difficult to prevent fakes from reaching their customers.
Much-loved brands are especially attractive targets for these fraudsters because of their loyal customer base and market reputation, with criminals mimicking the labelling and artwork to create a false sense of authenticity.
Many of these businesses are selling thousands of products, across hundreds of territories, something that only adds to the scale of the problem when looking to spot and then react to counterfeit traders’ actions.
Cosmetic counterfeits
Counterfeits in the cosmetics industry have the potential to cause harm and threaten human life. Products like fake make-up and counterfeit fragrances are rarely submitted for proper testing, with the average counterfeit perfume said to contain no less than 14 chemicals not listed on the label – leaving consumers at risk.
While it’s not uncommon for very low levels of mercury to be found in a range of cosmetics products, copies of famous beauty brands, such as MAC and Dior, have been found to contain hazardous levels of the chemical. Worryingly, mercury can cause breathing difficulties and kidney diseases if consumed in harmful quantities.
The rise of ‘dupes’ being advertised on social media has seemingly encouraged money-conscious consumers to turn to cheaper alternatives. From skincare to hair care, these products are often sold with information about how and where they were manufactured, as well as the ingredients, completely withheld.
Worryingly, as many as 47 percent of young people have bought dupes from social media, but it’s not the only place where cosmetic counterfeits are sold.
Those who buy from unauthorised sellers, such as uncertified hairdressers and flea markets (a rising problem in the United States) are also at risk of buying products containing dangerous chemicals.
Worsening the problem, online shopping giants like Amazon and eBay have also relaxed the rules about declaring where exactly products have come from. Some experts believe this has created an ‘open door’ where criminals can target consumers with dramatically reduced-price products on well-known selling sites.
Pharmaceutical dupes
Buying unauthorised pharmaceutical products online has its perceived advantages – no lengthy waiting times, the ability to bypass prescriptions and, of course, a lower upfront cost. But what consumers might not realise is that these products can also include potentially toxic chemicals.
In 2023, a consumer ended up in A&E after being illegally sold the weight loss drug, Ozempic, on the black market. The soaring demand for the drug, amplified by social media and celebrity influencers, meant there was a shortage for diabetes patients, resulting in the rise of semaglutide “diet-kits” being sold online.
Manufacturers of fake pharmaceutical products have intentionally deceived FDA inspectors, or bypassed legitimate healthcare supply chains, to sell ineffective or dangerous products, like synthetic opioids. They do this by counterfeiting labels and artwork, which can mislead not only the public but also pharmacists and those working within the medical industry. Given the busy nature of the healthcare industry, this is understandable, as few have the time to thoroughly investigate the legitimacy of every product.
Spotting and combating counterfeits
Counterfeit manufacturers mislead consumers into believing that their products are legitimate through packaging and labelling, so much so that your average person would find it difficult to distinguish between real and fake products.
However, counterfeits can threaten a brand’s reputation, leading to a decline in consumer confidence and negatively impact profit margins. MarkMonitor found that 47 percent of brands now lose sales to counterfeit goods, demonstrating the scale of an issue that urgently needs addressing.
We are now seeing brands finding new and innovative ways to combat counterfeits. Features such as holograms, watermarks, and QR codes have started appearing on products in various industries.
While these do enhance visibility, I feel that a more controlled method is needed to combat the issue completely. Players in the labelling and artwork management industry have honed in on visibility and traceability, developing software like our product Veraciti. Veraciti incorporates AI and machine learning to create labels which can be fully traceable. The key is speed. Using traditional labelling methods could take 10 humans weeks to change 1,000 labels. Our software can update and change labels instantly, allowing brands, with numerous products spanning multiple territories, to quickly edit a label, minimising the often lengthy approvals process using a repository of artwork, to distinguish it from counterfeits.
With huge benefits such as connectivity, accessibility and scalability, there’s little doubt that shifting to cloud-based solutions will play a crucial role in revolutionising the ways in which brands can effectively combat fakes and manage their labelling and artwork.
Attention should also turn to educating consumers on how to recognise counterfeit products – something that will, undoubtedly, take time.
As the label is usually the first line of defence in identifying illicit products, it makes sense for businesses to invest in a labelling and artwork management system that can effectively, and most importantly, quickly, work to distinguish fake products from real ones.
