Grena, Correspondent, India Pharma Outloook
According to the World Health Organization (WHO), the global market for counterfeit drugs is valued at 200 billion USD, with 67% of these counterfeit drugs being categorized as harmful to human health. As per the estimation of Indian Health Ministry, 5% of medicines in India are counterfeit and 0.3% are spurious. Indian Pharmaceutical market has an estimated value of INR 40,000 crore and 20% of the market is of counterfeit medicines. The pharmaceutical sector is expected to adopt blockchain technology due to the growing need for healthcare data security and increased healthcare data theft and breaches. In pharma, blockchain technology is utilized for quality control and identifying counterfeit drugs. Also, Anti-Counterfeit Medicine System (ACMS) are being used to fight against counterfeiting. According to a Fortune Business Insights report, the global blockchain market has been projected to grow by $825.93 billion by 2032. A key application of blockchain in fighting counterfeits is improving transparency in the supply chain. By documenting each transaction and product movement on the blockchain, companies can establish an unchangeable record of the product’s journey from the manufacturer to the end consumer. Furthermore, blockchain-based QR codes enable instant verification of medicine authenticity by the consumers.
Blockchain in the pharmaceutical supply chain management market industry is expected to expand to USD 5.15 Billion by 2032, reflecting a compound annual growth rate of 19.90%. The major challenge associated with the prohibition of counterfeit drugs is a lack of transparency in the supply chain. Drugs go through intermediaries like manufacturers, distributors, wholesalers, and retailers before they can reach the consumers. Any weak link in the supply chain is exploited by the counterfeiters. Blockchain improves the pharmaceutical supply chain by providing transparency, traceability, and drug authenticity. Every participant in the supply chain—be it a manufacturer, supplier, or pharmacy—records their data onto the blockchain, making tracking of real-time movement of a drug possible.
Shailender Kumar, Regional Managing Director, Oracle India says, “With blockchain, every movement of the drug through its supply chain is recorded – that way, the drug supply chain is completely transparent, secure, decentralized and verifiable. We believe blockchain and IoT can play a significant role in ceasing fake drug distribution and we are all geared to work with NITI Aayog in this major program.”
Once recorded, the information cannot be changed or deleted which helps to authenticate a drug easily. The improved traceability helps detect counterfeit drugs at any stage and prevents their distribution. In case of a problem, the source of contamination or fraud can be traced quickly by the authorities. Blockchain facilitates immediate monitoring, lowers counterfeit risks, simplifies regulatory adherence, and provides stakeholders with secure access to authenticated information, promoting trust and ensuring patient safety also it ensures that the consumers get only authentic, high-quality medicines.
The data stored in the blockchain is unchangeable. The chain is made up of blocks that include a timestamp, a hash, and a collection of transactions. Once added, these blocks cannot be removed and they are protected by cryptographic techniques that prevent any unauthorized alterations to the blocks. In that case, normal databases can become hacked or manipulate, but blockchain technology make sure that transaction has already passed through encryption. In cases of counterfeit drugs, this immutability prevents unauthorized alterations of records of manufacture, packaging, and distribution. Usually, the counterfeiter goes ahead to make some fake labels, change expiration dates, or even go for substitutes of the original drug. But in the blockchain system, each detail—that includes batch number, manufacturing date, and storage conditions of the drug—is safely recorded. Any form of alteration in the data becomes suspect.
In order to fight the growing problem of counterfeit drugs in India, NITI Aayog, the Government of India’s leading policy institute, has collaborated with global cloud leader Oracle, India’s top super specialty hospital Apollo Hospitals, and global pharmaceutical producer Strides Pharma Sciences to test a real drug supply chain using blockchain decentralized ledger and IoT technology. Oracle’s blockchain software securely logs a drug’s details in the manufacturer’s supply chain, including serial number, labeling, scanning, and prevents any possibility of record tampering. At each instance of a handover, it tracks the drug's movement– from producer to logistics, from stockist to hospital, or from pharmacy to consumer.
Amitabh Kant, CEO, NITI Aayog says “This agreement with Oracle and our partnership with Apollo Hospitals and Strides Pharma, will help ensure that Indian drug manufacturers and healthcare experts have access to a standards-based, modern technology platform – blockchain and IoT, to help eliminate fake drug distribution.”
Quality control checks and compliance verifications are automatically performed through smart contracts—self-executing agreements on blockchain. If the drug does not comply with the regulations, the system can automatically flag and block the distribution. By preventing tampering, blockchain ensures that only verified high-quality drugs reach the consumers. This will help the pharmaceutical companies to safeguard their brand reputation, increase regulatory compliance, and greatly reduce the risks associated with counterfeit medicines.
According to the World Health Organization (WHO) survey, an estimated 1 in 10 medical products circulating in low and middle-income countries is either substandard or counterfeit. Although blockchain enhances transparency and security throughout the supply chain, greater consumer empowerment to verify authenticity of drugs is required. Most counterfeit drugs appear to be as legitimate as original drugs, and most consumers cannot identify between them. Blockchain can be directly utilized to provide real-time verification of drugs through smartphone applications.
Dr Mariângela Simão, Assistant Director-General for Access to Medicines, Vaccines and Pharmaceuticals at WHO said, “Substandard or falsified medicines not only have a tragic impact on individual patients and their families, but also are a threat to antimicrobial resistance, adding to the worrying trend of medicines losing their power to treat”.
Pharmaceutical companies can include blockchain-based QR codes or RFID tags on the packaging of medicines. Subsequently, through a mobile application, consumers, pharmacists, or healthcare providers can scan the code instantaneously to retrieve verified information regarding the drug such as manufacturing date, batch number, expiration date, and journey along the supply chain. This authentication process increases consumers trust, as they can check the authenticity of any medicine before buying or using it.
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