The German advertising tagline "greed is good" is now outmoded as a basic principle of purchasing. A low purchase price does not mean that a product is actually inexpensive. Therefore the saying, "Those who buy cheap buy twice" often applies. As it would seem, this commonplace insight for consumer goods also applies in the chemical and pharmaceutical industries. Quality obviously does not always correlate with price.

Time and again, reports surface in the media about injuries and even deaths resulting from counterfeit or contaminated medicinal products. But in addition to medicines, there are other products that have also made the headlines, ranging from food to clothing, chairs and toys. In these cases, which were not driven by criminal intent, the causes of the problems were an incorrect understanding of quality and the major consequences of seemingly minor deviations.

The European Fine Chemicals Group (EFCG), a sector group within the European Chemical Industry Council (Cefic), has long pointed out the problems that have taken hold in company supply chains. Ultimately, these problems result in counterfeit, low-quality or contaminated products reaching the market. To address this problem, the EFCG has developed various approaches that take into account the justifiably varied regulatory requirements for products. After all, there are differences in the manufacture of high-quality products, for example between a pharmaceutical product and a pigment for automotive coatings.

The EFCG is well aware that not every deviation can be completely regulated under standards set by law or specifications. While the manufacturers of fine chemicals agree on the necessity of greater involvement by governmental authorities, they believe foremost in voluntary commitment by the producers in the supply chains.

CHEManager Europe invited three representatives of member companies of the EFCG to a round-table discussion to talk about the differences and similarities in the approaches. This will elicit the perspectives of manufacturers of active pharmaceutical ingredients (APIs) as well as manufacturers of pharmaceutical auxiliaries and carriers (excipients) and other intermediates and end products.

Dr.

Michael Reubold discussed with Dr. Burghard Freiberg (Merck KGaA), Dr. Lukas von Hippel (AllessaChemie) and Dr. Heinz Sieger (CU Chemie Uetikon) positions they share and where they differ.

CHEManager: Counterfeit or contaminated products and their components, as well as products manufactured under different production standards for different quality requirements, cause injuries and even deaths. How widespread is this problem around the world?

H. Sieger: The number and frightening scale of the incidents such as adulterated heparin, contaminated pharmaceuticals in Haiti and Panama, gentamycin, and the melamine scandal involving contaminated and diluted baby formula in China are well known and documented. The heparin incident made it very clear to us that despite controls, the criminal intent and profiteering among some manufacturers are so great that they knowingly and willingly put peoples' lives at risk.

In our view, in Europe this problem continues to receive inadequate recognition and is sometimes downplayed. The question remains: How many more incidents of this sort must occur, with how many victims and injuries, until the situation is finally rectified?

L. von Hippel: There are unfortunately even more examples, and not all of them have immediate bearing on consumer health. Beyond the examples of contaminated pharmaceutical active ingredients, tablets containing either no or the wrong active ingredient, and in addition to the results of criminal activity such as in the melamine scandal, we often encounter problems in the manufacture of products where environmental protection is disregarded or safety standards are violated. We must detach ourselves from the delusion that we can simply look at a product to discern the quality standards it was produced under. Instead, we must actively prepare ourselves to also check what conditions the substances were produced under.

Health effects up to and including death are tragic, but the economic damage is also enormous. Can they be quantified?

H. Sieger: The most recent warning from the EU Commission makes the scope of the economic damage clear. More and more instances of counterfeit medicines are being uncovered, said the outgoing Industry Commissioner Günter Verheugen, in early December 2009. He stated that targeted customs inspections in all member states had seized 34 million counterfeit tablets in just two months. Further, he stated that counterfeiting medicines is a serious crime that must be severely punished.

L. von Hippel: The consequences are in fact varied and difficult to quantify, and they affect more than just the pharmaceutical industry. Just recall the toy scandal of Christmas 2007 or the baby formula contaminated with melamine. Health or economic damage should not occur. Our supply chain activities continue to be a significant cost factor in our books. And we all know that the supply chain and its quality worldwide are becoming ever more important, as it is often the only place where we can still achieve added value.

H. Sieger: The issue here is not merely one of health and economic losses, but also of the very reputation of the chemical and pharmaceutical industries. These scandals have also confronted us with a massive image problem. The shift of production activities to Asia has in most cases meant that production occurs in significantly worse conditions. Thus far, the European public has barely perceived this fact, or is simply not aware at all.

B. Freiberg: I, too, see the loss of reputation - which cannot easily be expressed in euros - as the real economic damage resulting from this problem, though the end manufacturers of course also suffer a directly quantifiable loss.