Counterfeiting : exploring mitigation capabilities and resilience in South African pharmaceutical supply chains

Abstract

ORIENTATION : Pharmaceutical supply chains (SCs) are experiencing a growing emergence of illicit trade of counterfeited products. This threat is amplified because of global distributed SC networks, increased access to the Internet and challenging economic conditions. Research purpose: The purpose of this study was to explore risk mitigation capabilities and SC resilience (SCRES) to reduce the effects of counterfeiting in the South African pharmaceutical industry. MOTIVATION FOR THE STUDY : Developing countries such as South Africa tend to be more vulnerable to counterfeiting, as these countries do not have established responses that are seen in more developed countries, such as SC regulation, track-and-trace technology and enforcement regimes. RESEARCH DESIGN, APPROACH AND METHOD : This study employed a generic qualitative research design. Semi-structured interviews were used to collect data from 12 pharmaceutical manufacturers, distributors and retailers in the South African pharmaceutical industry. A thematic analysis approach was followed to analyse the collected data. MAIN FINDINGS : The findings show that the sources of counterfeiting stem from the local and outsourced manufacturing of counterfeited products, presence of unauthorised distributors and importing of counterfeit products. Risk awareness can be enhanced by collaborating with industry members, training members to identify counterfeits and by developing authentication technologies. The industry actively combats counterfeiting by using SCRES enablers including visibility, collaboration, information sharing and by developing an SC risk management culture. PRACTICAL/MANAGERIAL IMPLICATIONS : South African pharmaceutical firms have limited resilience. Therefore, managers should develop flexibility, agility, sensing and redundancy as resilience enables firms to combat counterfeiting. CONTRIBUTION/VALUE-ADD : This study expands the current literature by identifying the unique sources of counterfeiting and risk mitigation capabilities to combat counterfeiting in pharmaceutical firms in a developing country context.