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Dental leaders provide insight into gray market

Panel convened before Chicago Midwinter Meeting to discuss how various aspects of industry handle counterfeit materials

March 13, 2015

By Kelly Soderlund

photo of Dr. Meyer
Dr. Meyer

photo of Dr. Hearne
Mr. Hearne

photo of Dr. Teitelbaum
Mr. Teitelbaum
Leaders from dentistry and the dental trade industry gathered Feb. 25 before the Chicago Midwinter Meeting to discuss gray market product sales and what measures they can take to regain or maintain control.

The "2015 Future Trends Forum: The Dilemma and Impact of Gray Market Product Sales," featured Dr. Daniel Meyer, ADA chief science officer; Bernie Teitelbaum, executive director of the Dental Industry Association of Canada; and Simon Hearne, international vice president of the 3M ESPE Dental Division. Each provided information on the gray market from their perspective and some advice on how to handle it.

"It's an issue that, I think, is becoming more complex. The shades of gray are getting darker," Dr. Meyer said. "I think all of us who rely on the quality and performance of manufactured products have a shared responsibility of upholding the integrity of the profession. All of those involved in the dental industry need to work together to help ensure products conform to professional standards and regulations."

The term "gray market" generally refers to products that are sold outside the established manufacturer distribution chain. Selling the products isn't necessarily illegal, but purchasers may not be getting what they paid for. For example, a supplier may buy products intended for a foreign market and then sell the product in the U.S., where it may or may not comply with U.S. laws or regulations.

Not all gray is the same and there are sometimes many pathways between the manufacturer and the customer, Mr. Teitelbaum said. A product could go from the manufacturer to the distributor to a broker to a number of dealers before it makes its way to the dentist.

"The bottom line is the dentist isn't getting what he ordered," Mr. Teitelbaum said.

The manufacturers in Canada have responded by using different packaging for different parts of the world; using different brand names in different parts of the world; communicating globally about the risk; and improving reaction time to foreign exchange rates.

"We tell dentists, 'Be risk smart,' " Mr. Teitelbaum said. "Buy your product from someone you know is reputable. Not someone you want to be reputable."

There are a number of factors that influence and facilitate the gray market, Mr. Hearne said: price variances; a global network of illegitimate traders; Internet shopping and decreased trade barriers; currency fluctuations; and bargain hunting, to name a few.

Dr. Meyer said the ADA advises members to rely on the medical device requirements or guidance put forth by U.S. agencies such as the Food and Drug Administration, Federal Trade Commission and Department of Commerce. He emphasized that his presence on the panel was not only to share professional information about ADA standards development and professional product review programs, such as the Seal of Acceptance and the Professional Product Review, but to listen on behalf of the Association to gather information on the complex issue involving multiple stakeholders in the dental trade industry.

For 3M ESPE, it's a branding issue. If gray market products are repackaged or mislabeled or have fake labels indicating it's a 3M product, when they're not, it creates a problem for the company, Mr. Hearne said.

"To protect the brand, the last thing we want is a counterfeit good that's not 3M that has the 3M name on it," Mr. Hearne said.

3M's first concern is patient safety, he said, and when there's an unsecure supply chain, it creates distrust between customers and the industry. 3M wants to minimize product diversion and counterfeiting, and Mr. Hearne said it's important for manufacturers, authorized distributors and dentists to work together to make that happen.

Manufacturers need to partner with only authorized distributors and proactively monitor and respond to product diversion and counterfeiting. Authorized distributors should only source from brand manufacturers and prevent inventory from going to the secondary market, Mr. Hearne said. Dentists should only buy from manufacturers' authorized distribution channels and not accept solicitation from illegitimate dealers.