Drug Counterfeiting in The Pharmaceutical Industry

Drug counterfeiting is a major problem in the pharmaceutical industry. Here are some metrics revealed by the Health Research Funding Organisation:Internet sales of counterfeit drugs account for $75 billion of the total market; About 60 different Pfizer medicines and products were being counterfeited around the world as of 2014; WHO estimates that 16% of counterfeit drugs contain the wrong ingredients, while 17% contain the wrong levels of necessarily ingredients.

The major problem with fake drugs isn’t that they are fake but rather that they can be very different from the original product in a quantitative and qualitative way. Indeed, many of them do not contain the active ingredients they claim they do. This can be dangerous for the patients that take the counterfeit drug since it won’t treat the disease. Moreover, if the ingredients and the dosages are different, the product can launch unexpected secondary effects that can lead to unpredictable conditions.

As strongly underlined by Anca PETRE, Healthcare Market Analyst at Humaniq, the main advantage of blockchain technology for drug traceability is security. Each new transaction added to a block is immutable and time stamped, making it easy to track a product and make sure the information cannot be modified.

A blockchain can be either public or private. To insure the origin and traceability of the drugs, the companies that register a product on the blockchain must be trustworthy. Hence, only private blockchains controlled by a central entity are logical to make sure that fake drugs are not registered. A company’s access to the "drug blockchain" would therefore be a proof that the drugs they produce are authentic.Anca PETRE states: " The pharmaceutical companies decide which actors of the supply chain act as miners. It could be manufacturers, distributors or retailers. Depending on the position on the supply chain, each person could have different rights: labs can register drugs whilst wholesalers can only verify transactions. "When a drug is produced, a block is created that holds all the relevant information about the product. Each time the drug moves from one entity to another, the information is stored on the blockchain, making it easy to track the drug.

One of the main problematic today, is the absence of harmony between the systems used to track drugs, and often, stakeholders on the supply chain have a limited vision of the origin and destination of the products they receive. In addition, if a problem is detected and a batch has to be withdrawn from the market, blockchain technologies make it easier for the company to find their products and hence, avoid any complications.Blockchain technologies help with two main issues when it comes to drug traceability: first, it allows companies to track their products down the supply chain, creating an airtight circuit, impermeable to counterfeit products. Second, it also allows stakeholders, and especially labs, to take action a posteriori in case of a problem by identifying the exact location of their drugs.