From lawn to FMCG products, counterfeiting is rampant in Pakistan, but nowhere does the issue require a more urgent solution than the medication segment where the proliferation of fakes has life threatening implications ranging from developing resistance to genuine drugs to killing people outright.

While the sale of spurious drugs is a global problem (WHO estimates that up to 10% of the drugs sold globally are fake, with Deloitte putting their value at between $75 and 200 billion) the issue is far more endemic in developing countries where the perpetrators are considerably more difficult to track. However, in countries like India and Nigeria where deaths caused by counterfeit drugs have made the headlines in recent years, companies such as PharmaSecure and Sproxil have used SMS-based technology in an attempt to control the problem.

In Pakistan, the Pharma Bureau (the representative body of 22 multinational pharmaceutical companies operating in the country) estimates that counterfeit drugs account for 15% of the total two billion rupee pharma market (WHO puts the figure at 40%), yet little effort has been made to deal with counterfeit medication. Most general stores double up as pharmacies and sell drugs from questionable wholesale sources. Even full-fledged medical stores cannot necessarily be trusted, as there is no listing of batch numbers for the medication sold.

Part of the reason why counterfeit drugs have become such a big problem in Pakistan is because drug prices have remained virtually unchanged since 2001, making margins extremely slim. This encourages medical stores and pharmacies to buy cheaply from wholesalers and then charge a greater profit.

However, there is cause for hope as a few young Pakistani entrepreneurs are using a mix of technology and market savvy to educate consumers about the dangers posed by counterfeit drugs, while ensuring a viable business model for themselves in this complicated industry. Here are three ventures.

Asli Goli

For Canada returned founder of Asli Goli, Saim Siddiqui, his new business (established in October 2013) marries his experience in the software industry with his interest in public health issues. Similar to PharmaSecure in India, Asli Goli is an SMS-based drug authentication service. The way it works is that when consumers buy a drug they send the numerical code printed on the pack via SMS to Asli Goli, which sends a return SMS to confirm whether the medication is genuine or not. According to Siddiqui, using SMS technology makes sense because SMS is ubiquitous in Pakistan and the model has been very successful in India.

The challenge lies in the printing of the authentication code on the medicines as this requires a buy-in from drug manufacturers. Siddiqui says that while both multinational and local drug companies are eager to clamp down on counterfeiting, the cost of authenticating the medication (companies have to pay Asli Goli one US cent for every code they print – and every unit of medication must have a unique code) is a major barrier in a market where drug prices are stagnant. However Asli Goli has made inroads and is hoping to sign agreements with some manufacturers shortly. Furthermore, Siddiqui is not planning to print a code on every single unit of medicine as this simply is not realistic. Instead he is taking a targeted approach by putting himself in the shoes of the counterfeiter.

“If you are a counterfeiter you want to counterfeit drugs sold at high price points and in large volumes. Based on this insight, we have decided to focus on medication for chronic diseases, antibiotics and the flagship brands of the drug companies.”

The Asli Goli service is expected to be up and running later this year and Siddiqui is hoping to partner with pharmacies and public hospitals to create awareness. In the long term, he hopes to use the data gathered to discover more about patients and seasonal variations of products and potentially make this data available not only to pharmaceuticals (for marketing purposes) but to public health institutions (in order to improve data collection).

Dawaai

Former investment banker, Furquan Kidwai, started the Dawaai.pk website in April as an authentic and convenient source of buying medicine. The company’s USP is that Dawaai purchases all their medication directly from manufacturers or from authorised dealers, retains qualified pharmacists for phone-based counseling and drug dispensation, stores the medication at the appropriate temperatures and delivers to the customer’s doorstep within two hours of the order being placed.

Kidwai doesn’t like calling Dawaai an online pharmacy; instead he prefers the term ‘technology-enabled pharmacy’. Customers can either place an order on the phone (95% of customers use this method) or online. In both cases, the orders are checked by pharmacists before dispatch. When buying prescription drugs, customers must either upload the prescription to the website, or show it to the rider at the time of delivery. All customers are given the batch numbers of the drugs purchased in order to ensure easy tracking and authenticity.

Dawaai receives 20 to 25 orders per week, but then most of it’s marketing efforts have been limited to social media sites such as Twitter and Facebook, although an advertising campaign is expected later in the year. While deliveries are currently limited to Karachi and the target market is middle and upper middle class customers, Kidwai hopes to establish a presence in a few more cities in the next 18 months. He adds that as the name suggests, “we are going to cater to all types of people because the top end market is not big enough.”

Kidwai is also pursuing corporate customers.

“The biggest issue for corporations is the fact that employees fake their medical claims. We are telling corporations that if they appoint us as their sole pharmacy, we can then authenticate that the medicine has been dispensed.”

While the concept of ordering medication online is not an easy sell (there is no precedent for it in Pakistan), Kidwai hopes that the advertising campaign which will focus on authenticity, convenience and quality will help alter consumer perceptions.

“We are not a pizza delivery service where people can bin the product if they don’t like it. There is a trust factor involved and this will take time. But we are a patient-friendly service and we are here to improve healthcare and fill the gaps that exist in the market.”

Pharmacie Plus

Former ad executive Hamza Usman is the man behind Pharmacie Plus, a pharmacy with ambitions to become a complete health and well-being store. According to Usman, the idea came to his father and cousin when his uncle fell ill and the family realised that there were really only a few trustworthy pharmacies in Karachi.

Although at the moment, there is only one brick and mortar Pharmacie Plus store in Karachi, Usman believes that what will set Pharmacie Plus apart from other pharmacies (even well known ones such as Farid’s) is the fact that “we stock everything you need, not just the running items.”

Pharmacie’s focus is on sourcing drugs directly from manufacturers or licensed distributors is a major differentiator. Furthermore, beyond proper sourcing, data entry and storage, the pharmacy also provides health services, including a small in-store clinic with a qualified nurse available to administer injections and vaccinations and testing services to check height, weight, BMI and sugar levels. There is differentiation in terms of product line-up as well; while the focus, says Usman, is on drugs, Pharmacie Plus stocks baby products, homeopathic and Ayurvedic medication and nutritional supplements. There are also plans to delve into sugar free food for diabetics shortly.

Given that stagnant drug prices make it expensive to run a brick and mortar pharmacy (especially one based on ethical sourcing) finding alternate revenue streams is extremely important. One stream that Usman is hoping to develop is shop windows.

“The property we bought used to belong to a bank and we were left with these large windows, so we decided to use them as spaces for brand display. As medicines cannot be advertised, we are hoping to sell the space to multinational beauty brands because they fit in perfectly with our core philosophy of health and wellness.”

Usman, who hopes to have two more outlets in Karachi by December, will then focus on markets such as Hyderabad and Gujranwala “where the means and population are available but the facilities aren’t.”