How blockchain can help fight counterfeit drugs in India

The problem of fake and counterfeit drugs within the supply chain is a huge problem that costs the pharma industry billions

Updated: Jul 26, 2018 07:51:59 PM UTC
Image: Shutterstock

The Indian pharmaceutical industry is the third largest in the world in terms of volume, accounting for 10 percent of the world’s production. With exports to more than 200 countries, India is the world leader in the production of generic drugs and vaccines. The bad news however is, according to the World Health Organization (WHO), 35 percent of fake drugs sold all over the world come from India. The problem of fake and counterfeit drugs within the supply chain costs the pharma industry billions. More troubling is the fact that it puts patients at greater risk, particularly in developing nations where the WHO estimates that one in 10 medical products (For eg, pills, vaccines, and diagnostic kits) is substandard or fake. Globally, more than a million people die every year after consuming counterfeit medicines.

Drug manufacturers are struggling to find an effective way to securely, transparently, and rapidly track the origin of these drugs; or access data required to combat counterfeit drug sales. In its pursuit to gain continued confidence in exported pharmaceuticals from India, the Government of India is looking at a mechanism to get real-time visibility into all drugs produced and exported from the country. It also wants to provide patients and regulators worldwide, the means to verify the genuineness of drugs manufactured in India.

Point of Entry
Before we go any further, it is critical to understand how counterfeit drugs manage to find their way into the supply chain. There are multiple, unverified and unsecure points of contact, any of which, could be an entry point for lethal fake drugs.

» Complex global supply chains make it harder to determine the origin of the drugs or drug ingredients » Before drugs arrive at their final destination, more often than not, they pass through multiple trading companies who do not check quality
» One or several players in the supply chain may be corrupt: Contaminating, substituting or mis-labelling products in the supply chain
» The manufacturer might not be aware that the ingredients possibly came from an uncertified source
» Ingredient or drug manufacturers pose successfully as legitimate pharmaceutical companies with the help of false paper work

Challenges in the supply chain
With so many points of entry and no robust or secure system in place to track the drug supply chain, poses a big challenge. The impediments to the current supply chain system can be anything like:
» Absence of unified and interoperable labelling and identifications standard
» Siloed, fragmented and opaque supply chain infrastructure. There is no clear way to trace a product’s journey across the supply chain that can reveal the true origin and touchpoints
» Improper cold chain management and monitoring
» Multiple change of hands, including packaging and logistics provider, as the drugs are handed off between various stages, which could be potential points of entry for spurious drugs
» Different manufacturers adopting different systems. This leads to the need for wholesalers and resellers to maintain different types of solutions across their supply chain systems, which can cause a disarray in the data or delivery and ultimate risk to a consumer

Blockchain – The Answer
Blockchain is a decentralised digital ledger that records and transfers data in a fast, secure, and transparent manner. A blockchain based drug supply chain will depend on having all the required entities like the manufacturer, distributors (3PL), and pharmacist or hospital on a trusted network powered by blockchain. A visible supply chain, which includes all stakeholders like suppliers, vendors, distributors and partners, is created when drug bottles are labelled with serial numbers and packages containing these serial numbers are scanned and recorded on the blockchain at every point along its journey from factory to pharmacy. In fact, even manufacturing inputs, like chemical ingredients can be tracked and linked to the finished products.

Additionally, the blockchain can document critical details like location and temperature from IoT devices attached to the packages, making the journey visible to all concerned entities, while greatly reducing the possibility of record tampering. When a product moves through the supply chain passing through various hands, each transaction would be captured, recording a permanent history of the product. Right from the point of manufacture to sale, this system powered by blockchain, will have  a digital record of every change of hand. This would enable a way to radically diminish time delays, increased costs, and human error that plague transactions today, and even help find the glitch in the system that allows counterfeit drugs filter in. The supply chain is made transparent, secure, decentralised and verifiable besides plugging loopholes in the supply of authentic medicines and trimming costs involved in detecting faulty areas.

This could also be extended to patients consuming drugs. Some companies are working on dispensers that can be tied to a patient’s digital identity and report consumption to the prescriber or insurance company through embedded wireless devices connected to the blockchain. This can help alert appropriate parties when a patient is using more medicine than prescribed or when someone forgets to take important medication on schedule, prompting intervention.

Government and Industry Collaboration
Indian policy think-tank Niti Aayog believes blockchain is one of the answers to the counterfeiting woes of the country’s pharmaceutical industry. They believe taking steps to migrate the complete, comprehensive inventory of drugs manufactured and consumed in India onto a blockchain-powered system, can aide elimination of channels for counterfeit and spurious drugs.

In this initiative, private players have a central role to play. Technology and industry leaders need to partner with the government to stem the rising wave of fake drugs. The drug counterfeiting trade has become more lucrative than the narcotics business. Technology providers can use their resources, expertise and technologies to develop a blockchain-powered solution to eliminate the issue. Not just developing nations, even developed economies are facing this crisis of counterfeit medicines owing to the omnipresence of online pharmacies.

In addition to the government and research and development (R&D) spend, a transparent and secure supply chain is imperative for delivering drug formulas to protect lives. By adopting blockchain, pharmaceutical supply chain entities can dramatically improve their efficiency and disseminate verifiable medications across the planet. Naturally, with the increasing availability of original drugs, patients will stand to gain with regard to diminishing risks, as well be able to independently verify the authenticity of products.

The author is Senior Director and Head – Public Sector Business Development, at Oracle India.

The thoughts and opinions shared here are of the author.

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