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Dramatic decrease in pharma cargo thefts seen in 2011

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2011 was a great year for U.S. pharmaceutical theft, so to speak.

According to FreightWatch International, in a year that saw an 8.3% increase in cargo theft in the U.S., it was the first time on record in which the "pharmaceutical industry did not have the highest value per theft incident." That honor went to the electronics industry which averaged $998,000 per theft, nearly twice the average in 2010.

The average theft of pharmaceuticals tracked by FreightWatch was $585,000, down 6.5 times from the $3.7 million average loss in 2010. That was the lowest average pharmaceutical loss value since 2006, FreightWatch said.

That decline was so huge that it contributed significantly to a 31% decrease in the average value of loss across all categories. It was $319,000 in 2011, down from $468,500 in 2010 and down from the peak of $591,000 in 2009. FreightWatch recorded 974 cargo theft incidents throughout the United States in 2011, an all-time record in number of thefts. The average was also affected by a larger number of small-value thefts, particularly of food and beverages, the report said.

Always a concern for the pharma industry, a brazen heist in 2010 in which burglars stole an estimated $75 million worth of drugs from an Eli Lilly ($LLY) warehouse in Connecticut brought the issue into sharp focus. Stolen drugs are most often shipped to Latin America or to illegal online pharmacies. Sometimes they make their way back into the legitimate supply chain with new fake labels.

But for 2011, the statistics were promising. There were 36 pharmaceutical thefts in 2011, down from 49 in 2010. There were only two pharmaceutical thefts of more than $1 million, documented by FreightWatch. Of the 36 pharmaceutical theft incidents, Indiana and Florida had the most, with 6 each and Tennessee was next with 5. Trailer thefts accounted for 28 of the incidents. There were two burglaries reported and two of what FreightWatch calls "deceptive pickups."

The company considers deceptive pickups a major trend and an example of "organized criminal gangs' effective use of ambiguity in the supply chain process to obtain product--and in this case have the victims literally hand over the cargo to them." There were 29 deceptive pickups in 2011, up from 24 the year before. In one week in the spring, there were 8 reports of deceptive pickups recorded across the country involving four different cargo types.

FreightWatch says it gets data from "database content, law enforcement information and industry personnel. It also draws on observations by personnel in the field." The company said violence remained minimal in 2011, and was reported in only 1% of the incidents recorded for the year.

- view the report (sub. req.)

Special Report: Top 10 Pharma Cargo Thefts by Value, 2009/2010

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