Blockchain can save lives - Combatting counterfeit drugs through new-age technology

The business of producing and selling fake medicines has emerged as a grave problem in recent times. Here is how blockchain can be used to fight it.


Access to proper medical aid and genuine medication is every human being’s fundamental right. Ideally, every aspect of healthcare provision should be sacrosanct and devoid of scandals and unethical activities. However, in reality, the healthcare sector is not spared by profiteers. One of the biggest frauds in this sector is the production and distribution of counterfeit drugs. Bogus medications like paediatric cough syrups laced with powerful opioids, or anti-malarial pills made of potato and corn extracts are examples of fake drugs that circulate as a part of a $250 billion con industry. Pills for weight loss, erectile dysfunction and birth control are also popular candidates for counterfeiters to replicate. While the fact that developing countries are more prone to this menace may not come as a surprise, the truth that developed countries are not immune to it either, should. Experts estimate that the sale of fake medicines is twice as much as the sale of legal pharmaceutical drugs all over the world.

The World Health Organisation reports that 1 out of every 10 medicines sold, in developing countries is fake or of inferior quality, claiming many lives every year.  Their findings are based on 100 peer-reviewed surveys carried across 88 countries between 2007 and 2016, examining the use of over 48,000 drugs. Some regions have rates as high as 30% for counterfeit drugs that are in circulation. As if defiling natural produce and foods consumed every day was not enough, even medications that are supposed to help fight illnesses are being fiddled with! It is not hard to imagine why fake and counterfeit drugs would demonstrate a rising trend in the markets; the big question is what can one possibly do to tackle the situation.

Let’s try and break this problem down a little. How do fake medicines reach consumers? Indeed, some manufacturers are producing these fake medicines, packaging them as authentic medicines, supplying them to distributors and pharmacies who then dispense them to users. That does sound like a logical supply chain, but this might not be the only way in which ‘unfit’ medicines reach patients. It is equally possible that the drug was genuine at first, but now it isn’t suitable due to a variety of reasons. The drug could be past its expiration date. Some sensitive drugs become unfit for consumption if they are not stored at the right temperature. Instead of discarding these products, racketeers find ways to keep them in circulation.

Now the problem sounds more complicated than before. Trade of fake drugs is driven by the lack of stringent regulations and legal checks on the supply chain. Therefore, empowering consumers with awareness and information about where the drug is being produced, under what conditions is it being transported and stored, who the distributor is, could put an end to the business of fake medicines. Blockchain, as a technology, is tailored to heighten accountability in supply chains by ironing out the flaws in the tracking process. It has been traditionally used in the world of cryptocurrencies to manage data exchanges in such a way that total transparency and security is maintained. When applied to pharmaceutical supply chains, it could not only reduce counterfeiting and theft but also help track the inventory efficiently and with complete transparency. Here’s how it works:

Manufacturers produce drugs and associate a set of unique identifiers (Name, Timestamp, Manufacturer’s details, Manufacture Date, Expiry Date etc.) This information is stored in the form of a QR code that is put on the packaging of the medicine, as well as on the blockchain. A blockchain based pharmaceutical supply chain includes all the relevant stakeholders – manufacturers, distributors, vendors, pharmacists, and consumers. Each drug comes with a label that has a unique serial number and packages containing these serial numbers are recorded on the blockchain. Each block has a unique hash ID that is recorded at all points during its journey from production to the consumer.

Besides, the drugs can be stored and transported in IoT enabled devices to track the key metrics throughout their journey. This information can be made available to all those on the blockchain, thereby considerably reducing the possibility of record tampering. As the drug moves through various entities on the supply chain, its details are recorded and updated on the blockchain. This method makes blockchain a viable solution to track inventory of the pharmaceutical supply chain as well. Since records on the blockchain are digitised; human errors, delays and unnecessary cost escalations can be quickly weeded out.

The end-to-end traceability offered by blockchain is key to reducing the possibility of counterfeiting. Also, all the stakeholders in the chain have ready access to information about the source and the route taken by the drugs that they have received. Blockchain also allows for efficient procurement of drugs since their exact location is known.

To summarise, technology is the only way forward to combat the challenges that the modern world is facing. Blockchain, as presented, is a viable solution for adding a layer of security and accountability in value chains – not just in the pharma industry – but also in a host of others ranging from banking to entertainment to waste management.

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