How to Stop Pharmaceutical Cargo Theft

Most of us who work on developing and deploying technologies designed to protect the supply chain usually focus on anti-counterfeiting. But that’s only one of the elements in the list of illegitimate activities that can cause damage to the health of patients and the profitability of legitimate businesses who participate in the U.S. pharma supply chain. I include the following activities in that list:

  • Counterfeiting
  • Diversion
  • Theft
  • Tampering
  • Up-labeling

These activities have all been detected from time to time in the U.S. supply chain for quite a few years, but the frequency of some of them has been on the increase over that same period of time. The question is, how much of each activity should we, as a society, tolerate before we step up counter-measures that are targeted directly on one or more of them?


Over the last 18 months the U.S. has experienced an unprecedented rise in the value of drugs stolen in thefts of entire truckloads as they are being transported from point to point (also see this). I’ve heard lots of theories about who is behind it (organized criminals/gangs, of course) and where the product ends up (outside the U.S., most people think).

Whether the stolen product is transported and sold outside the country or not, it’s still bad for our country and our supply chain. Wherever the stuff ends up, it causes a big risk to patients there and it takes legitimate business away from the manufacturer and from legitimate wholesalers. The thieves and their customers make an illegitimate profit and the patient at the end probably pays full price for a drug that may have reduced effectiveness if it hasn’t been handled and stored properly.

With every report of a stolen truckload, I keep wondering, where does that product end up? Who buys it from the criminal? Does it ever get sold back into the legitimate supply chain?

So I was particularly interested in the reports last summer that some insulin was found at a Houston “medical center” that had been stolen a few months before. They could tell because, coincidentally, the truck contained insulin from three lots that had never been distributed. Any of that particular NDC and those specific lots could be easily identified as having been stolen from that truck.

Here we have an example of a product that has very specific temperature requirements (between 36° to 46°F) that was stolen and somehow ended up back into the U.S. legitimate supply chain. The FDA has remained mum about the case since that time. Hopefully we will find out the full story once/if they begin prosecuting.

When I first heard this report it made me angry. How did it get back into the legitimate supply chain? I could understand how it might be sold in a less modern country, or through an illegitimate website, but this was our legitimate U.S. supply chain.


It got me thinking. If the drugs stay in the U.S., more than likely, the thieves have an outlet to readily sell their booty. If the buyers are members of the legitimate supply chain, chances are they had been buying the same NDC’s from a legitimate source prior to buying the stolen goods. In that case, there would be an abrupt change to their buying habits as soon as they purchase the stolen drugs. They would no longer need to buy more of those particular NDC’s for a while…maybe a long while. Whoever supplied those NDC’s to them prior to the theft would observe a total halt to their purchases of those SKU’s, and only those SKU’s.

But in our modern supply chain, companies stop buying a particular SKU from a particular supplier for lots of very legitimate reasons. By itself, simply observing an abrupt end to a regular purchase pattern which happens to coincide with the theft of an entire truckload of that same SKU is no cause for suspicion.

But my sense is that a stolen truckload of drugs probably doesn’t get sold by the thieves to a large number of outlets that are spread out geographically. They probably stash the goods in a single geographic location and sell it only in that locality. In that case, legitimate companies that normally supplied that drug might see a group of customers, all in or near a single city, abruptly stop buying the stolen SKU’s. It’s the geographic pattern that the suppliers would look for.

But that still doesn’t mean that those customers have bought stolen product. It just means that there is a location where investigators might want to start asking some questions about what lot numbers are in stock and where they were acquired. It would help narrow the focus of the criminal investigation and thus make it more efficient and, hopefully, more productive.

Publicizing that this type of analysis can and will be done might also make companies think twice about buying drugs that they suspect might have been stolen. Injecting some fear into the buyers of stolen drugs might dry up the sales outlets causing thieves to move on to some other type of product.

I don’t know if an abrupt change to the pattern of buying habits of multiple customers in a geographic area could be detected after a theft. But I know that the raw data does exist at legitimate companies in the supply chain. Those are the same companies who are losing business as the result of this type of cargo theft. One would just have to use a computer to analyze it properly to see if a pattern could be extracted. Why wouldn’t someone try it with the insulin NDC that was stolen earlier this year?