Global Economics

MPedigree's Rx for Counterfeit Drugs


A Ghana startup allows consumers to instantly verify the source of pharmaceuticals for free using mobile phones

In October, Belgian customs officials confiscated 2 million counterfeit pills, one of the biggest such seizures ever made in Europe. The seized drugs, which were produced in India and bound for the African nation of Togo via Brussels, are just one example of an escalating global trade.

Sales of fake drugs are exploding. The New York City-based Center for Medicines in the Public Interest predicts that global sales of fake medications will be worth an estimated $75 billion in 2010, an increase of more than 90% from 2005. Such sales don't just cost drugmakers. They can cost lives when substituted for real treatments for fatal diseases such as malaria, tuberculosis, and HIV/AIDs. The victims are often the poorest people on the planet, who have no easy way to verify if the drugs they buy are real or not.

MPedigree, a one-year-old company based in Accra, Ghana, aims to change that grim scenario. It is one of 34 companies named by the World Economic Forum on Dec. 4 as Technology Pioneers, companies offering new technologies or business models that could advance the global economy and have a positive impact on peoples' lives. Co-founded by Bright Simons, a 27-year-old Ghana native who studied astrophysics but pursued careers as a journalist and social activist before becoming a technology entrepreneur, mPedigree has developed a service that allows consumers to instantly verify the source of pharmaceuticals at no cost at the point of purchase, using standard mobile phones.

A Five-Second Confirmation

Pharmaceutical companies emboss special codes on drug packaging that are recorded in mPedigree's database. When consumers purchase a drug, they can scratch off a panel to reveal the unique code and send it via text message to a universal four-digit number. The request is routed to mPedigree's servers, located in New Hampshire. After sending the code, consumers get a response by text, usually within five seconds, indicating whether the product is genuine.

The process was invented by Simons, and a patent is pending in Britain. Co-founder Ashifi Gogo, mPedigree's chief technologist, a doctoral candidate in electrical engineering at Dartmouth, developed the first prototype.

Since the service is free, users need not own a phone; they can simply borrow one from someone nearby. Drug manufacturers pay for the text messages. MPedigree persuaded all the mobile-phone operators in Ghana to offer steep discounts on the messages; Simons contends that if the service is widely used, operators will still make money on each message.

MPedigree isn't the only company offering technologies to combat pharmaceutical counterfeiting. Others, for example, provide holograms that can be affixed to drug packaging. But Simons contends that under market conditions in West Africa, mPedigree's services cost less than holograms.

Payoffs for All

With mPedigree's system, he says, "Everyone wins." Mobile operators increase their traffic, and drug companies are likely to increase their sales of legitimate medicines if sales of fake drugs decrease. What's more, he says, drug companies can use data from mPedigree to track sales geographically and target their advertising. The data also could aid government agencies in cracking down on counterfeits. And, of course, consumers benefit from protection against dangerous counterfeit drugs.

Simons says he formed mPedigree because he was alarmed by the situation in his native Ghana, where as much as 50% of the drugs sold in pharmacies are fake. His goal is to introduce mPedigree's services across Africa and eventually into other parts of the world where sales of counterfeit drugs are rampant.

Simons says global pharmaceutical companies and several pan-African phone operators have already expressed interest in collaborating with mPedigree. The company plans to enter Nigeria in mid-2009 and has already entered talks with regulators and drugmakers in that country. After that, mPedigree is eyeing expansion to India in early 2010.

But in order to grow, the company will have to raise money. MPedigree has bootstrapped its first year of operation with a grant for collegiate inventors and help from the African Development Corp. It's now trying to raise venture capital. As far as Simons is concerned, there is no time to lose. The fake drugs seized in Belgium "would have put half the population of Togo at risk," he says.

Schenker is a BusinessWeek correspondent in Paris.

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