Report cites pharma industry for not reporting cargo thefts

The under-reporting of pharmaceutical cargo theft in Europe is "contributing to misinformation and a sense of false security within the industry," and the industry must act quickly or risk an increase in crime from these "sophisticated" groups.

This is according to a new report commissioned by supply chain firm Sensitech and written by Marv Shepherd, a professor emeritus and former director of the Center for Pharmacoeconomic Studies at the College of Pharmacy, University of Texas at Austin, and president of lobby group Partnership for Safe Medicines.

The report, a web-based survey from last year, saw a total of 49 respondents complete all or some portions of the questionnaire, with three-quarters from pharma manufacturers and supply chain logistics executives

The data showed that extensive under-reporting of pharmaceutical cargo crime in Europe is a "serious and prevalent problem," with over a third of the respondents saying that the number of unreported thefts was most likely "three to five times greater" than what is reported, with a minority believing it may be up to ten times higher.

Official numbers show that, back in 2015, there were two dozen reported pharma cargo thefts in Europe, but the report says that, from its survey: "This is a clear indication that the 24 reported crimes for that year is a gross misrepresentation of the actual number of crimes that occurred. And it also indicates that the risk of pharmaceutical industry perceives or is led to believe."

Why are these crimes under-reported? Shepherd says the majority of underreporting occurs because the thefts are simply not reported due to oversight or, more often, by choice due to internal company policies.

He says that it's particularly common in the pharma industry because a company wants to avoid insurance premium increases and also protect their brand or reputation by concealing the thefts. In addition, if the value of theft was relatively small, companies may also want to circumvent the costly process of reporting the loss.

Another major factor driving under-reporting are misreporting and misclassification of cargo thefts: i.e. where there is a lack of uniform reporting standards across countries by enforcement agencies, especially in Europe the report notes, where there are "widespread diversities by country and jurisdiction."

"Misreporting often occurs because there is no official organization in Europe where cargo theft information is collected, aggregated, and disseminated," Shepherd says.

The report hits out at those pharma companies that are not willing to go to the proper authorities when a theft has occurred: "By not reporting thefts, especially to law enforcement and data monitoring companies, pharmaceutical companies contribute to misinformation and a sense of false security within the industry and to other interested parties (such as insurance companies)."

Shepherd concludes that pharma companies should consider expanding their security measures, not only because of the potential risk that currently exists, but also "because criminals are getting more sophisticated and the number of thefts most likely will continue to increase."