The counterfeit menace is all-pervasive in India, with the market for spurious goods of all kinds worth an estimated Rs 1 trillion. But it is the pharmaceutical industry where its impact can be truly catastrophic. According to a World Health Organisation report, over 10 per cent of medicines sold in low- and middle-income countries, including India, are substandard or spurious. Since the advent of the Covid-19 pandemic, there have been numerous reports of fake sanitizers, handrubs and N95 masks being confiscated from different parts of the country.
And, as Amit Rangnekar, chairman of the pricing committee of the Indian Drug Manufacturers Association notes, counterfeiting of fast moving prescription brands in categories like antiseptics, vitamin supplements, anti-cold preparations, antacids and painkillers is rampant.
While some of this may be a recent phenomenon, MIT Sloan alumnus Padmakumar Nair recognised the need for an effective technology to fight the menace almost three years ago. He and his team developed a process based on artificial intelligence (AI) and cryptography to spot fake products within seconds.
In 2017, while studying for an executive MBA, Nair met Joseph G Harb, an executive of a top global pharma company, who told him that his company was losing $100 million a year in Africa alone because of duplicates — and how at least one child was dying in the region every five minutes because of counterfeit antimalarial drugs.
Researching the issue, Nair found that fake medicines caused over a million deaths a year. This was the trigger that made him leave a cushy job at Ooredoo in Oman and begin the search for a solution to the problem.
“I spoke to my friends in the IT industry and realised that anything visible on a product like a barcode or a QR code can be easily copied. These have a shelf life of a maximum of three months,” he says. Nair enlisted the help of Shalini V Nair, a friend who had several years of technology experience in the startup world, who agreed to work on a novel tool to track spurious products. A couple of weeks later, the duo along with Harb founded Ennoventure Inc, with its main R&D centre in Bengaluru, and Padmakumar Nair as the chief executive officer.
The company’s patented technology solution uses cryptography and AI through which any information can be encrypted on surfaces including plastic, aluminium foil and cardboard. This encrypted information can be retrieved using any smartphone to test the authenticity of a product.
Once a client comes on board, Ennoventure builds an invisible encryption within hours, which goes on product labels. To scan the encrypted design, the company has developed an app called Vyu which is currently in the beta phase. Once a product is scanned and found to be fake, the company that manufactures it is alerted and informed of the location of the item.
“We give real time alerts so that companies can take action quickly, before the spread of the counterfeit product,” says Nair.
Since Ennoventure’s is a cloud-based SaaS solution, its clients do not have to bear the cost of machinery that is otherwise needed to create barcodes or holograms. It will cost a company 5 paise per piece to print the encrypted artwork, says Nair, compared to 2D barcodes that generally cost up to 20 paise per piece.
“This method could improve the profitability of a company by as much as 10-15 per cent,” he claims.
One domestic pharma company that used to track duplicates of its brand through its salesforce and mystery shoppers found that having the product tested at its head office would take almost a week — too long to prevent its spread through the distribution chain. Now this company, which does not want to be identified, has given the Vyu app to all its sales personnel and mystery shoppers, who are able to identify the fakes immediately.
Ennoventure has roped in more pharma clients in the country, and the top five players now use the technology. It is also in talks with fast moving consumer goods (FMCG) companies, and has already signed on two clients.
The company next plans to enter the luxury goods segment, followed by the certificates and legal documents market. Nair also hopes to develop technology that will be able to scan currency notes and establish whether they are genuine or fake.