Thursday, January 22, 2009

Pfizer Tries to Choke Demand for Parallel Imports

Mmmmm, rats. They’re not just for breakfast anymore!

Pfizer has started a new advertising campaign in the UK that’s designed to educate consumers about the dangers of counterfeit drugs. Watch the video for yourself at or by clicking the picture below.

Warning: Don't watch it on an empty stomach.

Although the ad is stomach churning, it’s not really controversial. Is there anyone out there touting the benefits of counterfeit drugs?

To me, Pfizer’s ad campaign only makes sense if you also understand its UK distribution channel strategy. Otherwise, you will miss the as-yet-unstated goal of this campaign – eliminating the demand for parallel import product.


Pfizer uses a "direct-to-pharmacy" distribution model in the UK. A single wholesaler -- Unichem -- operates as a fee-for-service logistics provider. Pharmacies are direct customers of Pfizer, not a wholesaler. I described Pfizer’s implementation plans in Behind the Scenes of Pfizer UK. You can also read the official FAQ from Unichem.

In my opinion, Pfizer has two different objectives for its direct-to-pharmacy model:

  1. Lower the risk of counterfeit products entering the supply chain
  2. Recapture lost revenue from parallel importing (since the UK is one the primary destinations for parallel trade product)

Unfortunately, a British pharmacy could still choose to purchase parallel import and gray market products, while a consumer could choose to bypass a pharmacy and buy from an online seller. So while Pfizer can guarantee the security of its own direct supply chain, the company can not force pharmacies (or consumers) to buy through the legitimate channel.


Note that Pfizer’s channel strategy has created two side-by-side systems for drug dispensing:

  • A consumer can purchase through a Pfizer-supplied pharmacy for a guaranteed legitimate product.
  • Alternatively, a consumer can buy from an online website or from a pharmacy that lacks secure sourcing practices. The risk is that the pharmacy might be selling a parallel import (or outright fake) Pfizer product.

The rat ads imply (correctly, IMO) that diverted drugs -- such as parallel imports -- are suspect. Thus, Pfizer’s ad campaign lays the foundation for dealing with demand-side counterfeiting problems while also reducing any remaining parallel import demand.

For example, Pfizer could set up an “authorized pharmacy program” in the UK to help consumers identify pharmacies that buy exclusively from Pfizer. As the Pfizer's Real Danger web site states: "One in 10 UK men interviewed recently admitted to purchasing prescription-only medicines from unregulated sources, without a prescription." Your local British pharmacy could turn out to be one of those nefarious sources.


Did you know that Pfizer already used this strategy in counterfeit-laden Nigeria? As I wrote in 2007's Lessons from Nigeria, Nigerian pharmacies could earn a designation that signaled the availability of “genuine” Pfizer products. At the time, Pfizer’s Marketing Director said:

We want to have strong allies who will say no to clones, no to parallel imports, no to fakes or counterfeits.

So keep an eye on this campaign, which combines an innovative channel strategy with creative consumer marketing.

the next round of ads promise to be equally revolting given other ingredients often found in counterfeit drugs – paint, cement, anti-freeze, etc. BARF!


  1. Generally love the blog, keep up the good work. I do take issue with the often direct correlation drawn between parallel import supply and counterfeits. There is a robust and secure supply chain for PI drugs (having worked in the area) in the EU that is absolutely distinct from the shady world of no-prescription online purchasing. These PI drugs are all manufactured by the brand company, and they are only relabeled or put in an English language box then resold. Any supplier who used anything other than brand made product would risk their entire business. As long as a pharmacy purchases from a decent sized wholesaler there is very little risk of counterfeit.
    Grouping PI drugs with online and no-prescription meds from who knows where is nothing more than a brand tactic to maintain differential pricing and keep margins high. If you have any evidence that PI drugs have a higher rate of counterfeits I would certainly be interested.

  2. Thanks for the kind words about the blog.

    I don't live in Europe so I can only observe these issues from across the pond. Although many (most?) parallel trade products may be legit, it's logical to me that any type of diversion will open up gateways counterfeits. Parallel trade is diversion, by definition.

    I recognize that PT is a controversial issue, but there does seem to be some evidence that PT creates more opportunities for criminals. Here's a representative excerpt from The Guardian that I bookmarked last summer:

    According to the EU, counterfeiting has increased dramatically since evidence first arose of it in Europe in 1998. The MHRA says there have been nine recalls of counterfeits in the UK in the past three years and a further five cases caught at wholesaler level before they reached the market.

    Until last year, PPT traders dismissed the companies' concerns as without evidence. But last summer there were several recalls of counterfeit medicines that had entered the UK supply chain via a parallel trader.

    These involved Lilly's anti-psychotic treatment Zyprexa, Sanofi-Aventis's blood-clot treatment Plavix, and Astra Zeneca's cancer treatment Casodex. Some 40,000 packs of tablets were seized by the MHRA and up to a further 10,000 were recalled.

    The fakes, packaged in French, were made in China and shipped to Singapore. They were bought by a wholesaler in Luxembourg who sold them on to a Belgian wholesaler and another based in Liverpool, who in turn sold them to UK parallel importers. One of these, OPD, noticed mistakes on the packaging when it was preparing to rebox Zyprexa in English and reported back to Lilly, which informed the MHRA.


    I agree that PI products would, on average, be safer than online no-script sellers. But note that Pfizer's ad sets up a scenario under which they could argue that there is little difference.


  3. Dr. Fein,

    You are so well read, that I feel presumptuous to think you did not see the press release at this link.

    I read your writings often. Thank you for providing upfront, honest information.

    ***The urgency for stronger measures to battle CFing seems so downplayed, sometimes....this shows it is urgent and real!

  4. Love keeping on on the current issues through this blog. To me, the saddest thing has always been the perception by some that these product are mere "widgets", capable of being bought, sold, traded, diverted, etc., as if they were any common product.

    The fact remains, THEY ARE MEDICINES, designed to serve a very specific function. IMO, they should be held in higher regard, and not be subject of prey by profiteering middlemen.

  5. When I first watched the ad, I thought this was aimed towards generics given the battle underway. Put another way, it was messaging to buy "branded" drugs. Clearing, reading the text below the video communicated otherwise, but I wonder if others (the general consumer) never read the text and walked away with the same thought I had originally...look for the "brand".

  6. Very insightful post, Adam. I didn't consider the PI angle.

    here is Pfizer's site that explains the direct to pharmacy arrangement:

  7. I do not work for Pfizer, but do work in the area of anti-counterfeiting. I think the comment that they are really addressing parallel imports is unfair. The ad clearly shows the patient taking the product out of a mailing envelop. I think the ad is clearly, and appropriately targeted at internet sellers, especially those selling without a prescription. Most websites that sell without a prescription are unlicensed and do sell counterfeit medicines - some studies point to as much as 50% of the products they sell being counterfeit. The tagline states "Get real. Get a prescription". Good advice for any prescription only product. The ad does not direct the consumers to Pfizer supplied pharmacies. Counterfeit drugs are a real problem - please don't dismiss it.


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