TrusTech

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TrusTech

• The One Trusted Source for Supply Chain Management

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• The risk of counterfeit pharmaceuticals is
  greater than that of AIDS and malaria
• combined.

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Outline

• Overview
• Background
• Proposal
• Technology Proposition
• IT Solutions
• Engineering Solutions
• Value Proposition
• Measures of Success
• Conclusion

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Background

• Global sales of counterfeit drugs have
  increased annually by 13
• Source Counterfeit drug cases 1997-2004. U.S.
  FDA, May 2005

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Background

• An estimated 1 of drugs in U.S. market are
  counterfeit
• 3 billion in counterfeit sales per year
• Authentic drugs are more expensive than
  counterfeit counterparts
• More than 3 billion lost in revenue

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Proposal Focus

• Johnson Johnson Pharmaceutical
• Most susceptible of the three branches
• Ease of counterfeiting
• High profit margins for counterfeiters
• Hard to detect and trace
• Pharmaceutical counterfeits have the greatest
  immediate risk to consumer health safety

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Counterfeiting Infiltration
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Benchmarking

• Engraved logo on glass vials (Roche)
• Counterfeiters can easily engrave glass (e.g.
  watches)
• Vinyl self-adhesive label and colorful
  graphics on packaging (Glaxo)
• Graphics are easy to replicate on a superficial
  level
• Shrink-bands and security seals for
  transportation (Bayer)
• Counterfeiters are growing more sophisticated
  in their use of technology

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Goals

• To prevent counterfeiting outbreaks before
  they reach the consumer level
• To minimize the impact of outbreaks should
  they reach consumers
• To ensure that consumers needs are met by
  providing quality products in which they can
  trust

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What does success mean?

• Adhering to the Johnson Johnson Credo of
  responsibility to its constituents.
• Doctors and patients
• Ensured effective medications increases
  standards of medical care
• Suppliers and customers
• Increased sales through a certified inventory
• Stockholders
• Decreased counterfeiting increases revenue
• Consumer confidence in our product helps drive
  future sales

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Proposal

• IT Solutions
• Radio Frequency Identification
• Johnson Johnson Integrated Gateway
• Thermal ink nanotechnology traceability
• Engineering Solutions
• Thermochromatic ink
• Photon layering

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Radio Frequency Identification

• Easily embeddable stickers that track location
  and identity
• Existing infrastructure implemented at JJ
• Utilized on large scale operations
• Shipments from packaging to warehouses to
  wholesalers
• Secure RFID have been developed that will only
  respond when authorized

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Drawbacks to RFID

• Cannot track individual doses
• Lack of standards may result in tags being
  incompatible with wholesalers, pharmacists
  and hospitals RFID equipment
• Consumers may be worried that information
  on RFID tags may be used to track their
  activities

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J J Integrated Gateway

• Currently existing MDD IT website
• Allows hospitals and other healthcare
  professionals to purchase MDD products

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J J Integrated Gateway

• Expand to offer products of Pharmaceutical
  Operating Companies too
• Guarantees hospitals and healthcare providers
  a legitimate product
• Marketing and information on new products
• Links to certified authorized JJ wholesalers

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Inkjet Nanoprinting

• Invisible ink labels placed on entire supply
  chain
• Serial codes on crates, cases, bottles, pills
• Rendered visible with UV lighting
• Safe to consume in low doses
• Allows for reverse tracking of all products
• Ensures legitimate JJ products throughout the
  line

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Inkjet Nanoprinting

• Quality assurance and control

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Counterfeiting Infiltration
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• You cant defend product using a packaging only
  solution. As for ROI, our solution costs a
  fraction of the cost of RFID. If a 3 billion
  product is losing 120 million to counterfeiting,
  our product can cut 25 million in losses
  immediately.
• Cedric LoiretBernal - CEO of NanoInk, Inc.

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Thermochromatic Ink

• Ink that changes color based on temperature
• Invisible at room temperature, changes color at
  body temperature
• Safe to consume in low doses
• Imprinted on pills indicating dosage

• Unique solution preventing counterfeiting
  while promoting consumer confidence

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Photoluminescent Layering

• Embedded layering on interior of bottle top
• Push-down and twist top opening releases
  fluorescent chemicals
• Activates solely upon initial opening

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Counterfeiting Infiltration
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Estimated Costs
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What does success look like?
Five Year Roadmap
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What sets us apart?

• The new and innovative technologies increase
  the difficulty for counterfeiters to
  remanufacture authentic looking drugs.
• Bridging the gap across the supply and trying
  to eliminate the point of entry for
  counterfeiters in the supply chain.

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Conclusion
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• Questions?

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Finances Investments

• EST 3.5 r C0 -43.5 Million
• Annuity costs PV C/r-g(1-(1g/1r)T) where t
  5 years g 0 and C is 23.5 million
• PV of Annuity -106,103,730.80
• Total PV of Costs over 5 years
  -149,603,730.80

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Finances Investments

• NPV C0 (C1/1rt)
• 3 billion dollars in counterfeit sales a year,
  JnJ controls EST. 10 of market, thus 300 million
  lost revenue to be gained, expect revenue after
  first year
• Annuity of 300 million over 4 years at r.035
• NPV -150 Million est. 1.2 billion /1.0354
• NPV 951,923,762.60 Total Prevention over 5
  years