**MACHINE READABLE SECURITY**

**FOR PHARMACEUTICALS**

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### TSSI

Rutland House

Hargreaves Road

Groundwell Industrial Estate

Swindon

SN25 5AZ

### MACHINE READABLE SECURITY

**FOR PHARMACEUTICALS\
**

# Executive Summary

> Recent developments in the availability of high quality and low cost
> digital scanners and printers has put the traditional approaches to
> protecting brands against counterfeit and fraud under threat. Visual
> recognition is an essential part of a brand identity but can no longer
> be relied on as a means of preventing counterfeit. Todays environment
> of legislative and social pressures together with brand owners
> protecting their revenues is driving the need for more sophisticated
> approaches to the protection of brands.

Over many years Structured Magnetics solutions have provided very cost
effective protection for organisations in some of the most fraud prone
territories in the world, directly preventing loss of revenue and
maintaining security.

> This white paper will explain how structured magnetics solutions can
> be readily implemented within the pharmaceutical industry to protect
> against counterfeit, identify parallel or gray market trading and
> provide brand owner and customer assurance without major impact on
> manufacturing processes.

# Introduction

> A number of major threats are faced by the pharmaceutical industry --
> these include:

-   The threat from counterfeit products causing irreparable damage to
    the company through:

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-   loss of sales of genuine product,

-   loss of confidence in the drug,

-   litigation damages awarded through negligence to adequately protect
    the product.

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-   Loss of revenues from illegal gray market trading, particularly with
    the new agreements for the low cost production of generic drugs in
    economically disadvantaged countries.

-   Inability to meet the legislative requirements of auditable
    distribution.

> To date the industry has relied on visual features to protect drugs,
> including branding, backed up by Trade Mark and copyright
> prosecutions, security printing and holograms. Todays availability of
> high quality scanners and printers makes detecting the infringement of
> Trade Marks and copyright increasingly difficult. Holography has
> enjoyed a period when there were few specialist supplier capable of
> manufacturing high quality holograms in quantity. Today however the
> technology is widely available, resulting in numerous incidences of
> high quality counterfeits of security holograms.
>
> Consequently visual features, while offering some benefits, cannot
> solely be relied on to prevent counterfeit. It is clearly time for
> layered security to be implemented to offer 'defence in depth' against
> attack. Layers of security will undoubtedly include some visual
> aspects, but also need low cost and easy to use secure machine
> readable features.

# Machine Readable Features 

> Machine readability brings a new dimension to managing products,
> enabling automation of processes and interaction of products with
> database systems. Barcodes have been widely implemented to assist with
> these aspects of brand management. However as systems become more
> automated there is an increasing reliance on the machine readable
> feature and less reliance on visual inspection providing greater
> opportunity for the fraudster -- see Panel 1.
>
> Implementing machine readability as part of a brand protection
> strategy requires the use of a secure technology -- one which cannot
> easily be created or duplicated.
>
> By definition all machine readable technology requires some sort of
> device to detect and verify the feature, thus there becomes the issue
> of deployment of readers and possible associated infrastructure.
> Clearly it is undesirable to have a multiplicity of different readers
> deployed, so selection of the most suitable secure machine readable
> technology becomes crucial.

#### **Why Structured Magnetics?**

> A wide range of solutions are available to the pharmaceutical
> industry, many based on new technical developments which address part
> of the problem. One of the major factors for the pharmaceutical
> industry is to employ a solution which is proven, and meets the
> requirements of security without interfering significantly with the
> production and distribution processes.
>
> Virtually all security solutions rely on a permanent identifier in or
> attached to the product. However the identifier must be difficult to
> create or replicate, and there must be a method of authenticating that
> it is genuine.
>
> Structured Magnetics provides a solution which has been utilised over
> a number of years in a wide range of fraud prone markets and
> territories. Well over one billion documents have been protected by
> Structured Magnetics with over 120,000 readers deployed around the
> world. No incidents of successful counterfeit have been identified.
>
> Panels 2 and 3 present a couple of case histories which demonstrate
> the reliability and security of the solutions provided.
>
> In each case the implementation of Structured Magnetics did not change
> the production processes already employed, and the security benefits
> were made possible by a full deployment of readers.

### Structured Magnetic Features

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### Structured Magnetic technology is based on fixing data into a thin magnetic carrier during the manufacturing process. The data is defined at the manufacturing stage and cannot subsequently be changed. Readers are tuned to check for particular characteristics of the magnetics, which are unique to the manufacturing process, before decoding and presenting the data. Standard data formats provide either a unique code for each element of magnetic material, or a repeating code. 

### The thin nature of magnetics enables the technology to be offered in a number of formats to suit the specific application:

### A thread embedded into a face paper or adhesive label stock

1.  A foil for application by normal foiling equipment

2.  A tear tape for incorporation into packaging
    overwraps![](media/image1.jpeg){width="1.6020833333333333in"
    height="1.8458333333333334in"}

### A range of readers is available for authenticating that the magnetic identifier is present and to decode the data. Critical components are also available for integration into bespoke readers where required. 

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### Structured Magnetics in Pharmaceuticals

The issue facing the pharmaceutical industry today is how to implement a
secure brand protection solution without undue disruption to the
manufacturing processes, and at reasonable cost. Structured Magnetics
offers a number of potential approaches which can be implemented,
depending on the current processes and requirements of the specific
customer, all of which fit with current packaging processes.

For each approach outlined below, readers are required to check the
Structured Magnetic feature and to provide the audit. These are
generally installed both in distribution and as a security check on
goods at retailers/hospitals.

**Option 1 -- Structured Magnetic Thread (QMark)**

Embedded thread is available from both Appleton Papers in the USA and
Portals in the UK, and provides the opportunity for protecting either
the carton, or the label applied to the primary packaging.

a)  **Carton**. Thread containing the permanent code is embedded
    centrally in paper at the paper mill. Additional in-paper security
    features such as taggants or fluorescent fibres can be included, and
    a suitable coating applied. This paper is laminated to a board to
    produce a packaging material capable of taking high quality printed
    images. By utilising this threaded board for packaging, security can
    be built in without making changes to the carton design or the print
    processes currently employed.

b)  **Label**. Where a label is used on either the primary or secondary
    packaging a change of the label stock to one containing Structured
    Magnetic thread provides the opportunity to introduce machine
    readable security without changing any processes. Threaded label
    stocks are available with a range of coatings suitable for laser,
    thermal or inkjet printing. Immediate benefits can be accrued
    through equipping stages in the distribution with hand held readers
    to check the labels for the relevant code. By allocating different
    codes to manufacturing plants or to products sold into specific
    territories, items can be traced back to their source, offering the
    ability to check for gray market activity.

> **Option 2 -- Structured Magnetic Foil (SmartMark)**
>
> SmartMark Structured Magnetic foil can be applied direct to packaging
> or to labels using existing standard hot foiling equipment. Both overt
> visual security and covert machine readable security are contained in
> the foil, and the holographic image can be bespoke. Foil offers
> greater flexibility in positioning the feature on the packaging and
> can be readily changed to suit different package types or designs. No
> change is required to the source of the packaging or labels. If the
> label is used as a closure, opening the packet will immediately void
> the seal and prevent any packaging reuse. SmartMark offers the same
> range of coding options as the thread but with multi-level visual and
> machine readable security.

###### Option 3 -- Structured Magnetic Tear Tape

> An increasing number of products are being overwrapped with
> polypropylene to provide protection against tampering and to be able
> to show when the packaging has been opened. To facilitate easy opening
> tear tapes are commonly employed. Structured Magnetic security can be
> incorporated into the tear tape to provide protection against
> counterfeit, and also prevents reuse of the inner packaging, thus
> preventing 'refilling'. Again both unique and repeat coding can be
> offered.
>
> Implementing Structured Magnetics in the tear tape requires no change
> to the manufacturing processes, purely a change in the tear tape.

### Implementation

> Structured Magnetics is both a security device and a data carrier and
> provides the potential for progressive implementation.
>
> **Phase 1 -** By initially introducing Structured Magnetics into the
> packaging or the label, products can be simply authenticated using a
> hand held reader thus enabling counterfeit goods to be identified
> through the distribution chain. If different codes are allocated to
> different plants or territories the same reader can identify the
> source of the products, highlighting any gray market activity.
>
> **Phase 2 --** Using unique codes in the packaging or label offers the
> potential for full auditable tracability of the product. The
> Structured Magnetic code can be read at critical points in the
> distribution system and related back to its original manufacturing
> source. By linking the readers into a central database a full profile
> of the product routing can be established.
>
> **Phase 3 --** In some instances complete off-line authentication and
> tracking is needed. Structured Magnetics can carry a limited amount of
> variable data, such as the time and date of manufacture, or a
> manufacturing plant code. Encoders will need to be installed at the
> manufacturing or packaging plant, but the data can then be read off
> line by a hand held reader, and the data stored in a logger -- of fed
> to a database. An ideal solution where IT infrastructures are
> unreliable.

####### Summary

Structured Magnetics offers a proven secure approach to protecting
brands against counterfeit. The products are developed and available now
and can be implemented immediately. A wide variety of approaches are
available to suit the requirements of the particular application.

Costs are a minute fraction of those associated with RFID making a
credible business case easier to establish.

> TM SmartMark and QMark are Trade Marks of Thorn Secure Science Limited