Applying blockchain and IoT to the pharmaceutical supply chain
One of the biggest challenges for pharmaceutical companies (manufacturers) is counterfeit medicines. This problem has a huge impact on both the manufacturers, who miss out on billions in revenue, and patients, who may end up ingesting toxic ingredients having the wrong composition of chemical compounds or wrong or undesirable active salts, which can lead to a deterioration in health – or even loss of life if this concerns a lifesaving drug. With ongoing reported incidents of fake or counterfeit pharmaceuticals and medicines worldwide, it is apparent that no country is immune from this threat.
According to a report from Gartner, it is estimated that each year more than 250,000 children with malaria or pneumonia (common illnesses in poor countries) die after being treated with fake and/or substandard drugs. The World Health Organization (WHO) has estimated that 1% to 10% of all medicines in low and middle-income countries are falsified. For some countries and regions, this may be just the tip of the iceberg, a recent study in Africa showed that up to 70% of medicines that counter infections in the region were fake. In 2017, Egypt announced the discovery of ‘thousands’ of packages of counterfeit copies of the hepatitis C virus (HCV) medicine Harvoni. In the US, counterfeit fentanyl tablets have posed a very serious threat to patients, counterfeit pills marketed and distributed as oxycodone or Xanax, but made with fentanyl, can have fatal consequences. Fentanyl is 25 to 50 times stronger than heroin and up to 100 times more potent than morphine. Across Europe, there have been incidents involving fake contraceptive pills hidden inside DVD packages in Poland and falsified packs of the cancer drug Votrient found in Germany.
At the root of the problem are the key challenges listed below:
- Non-harmonised regulations across countries
- Non-standardised information exchange protocols in the supply chain
- An opaque supply chain from supplier to the patient
Non-harmonised regulations across countries
There are no harmonised regulations for manufacturing, storage, tracking and delivery of medicines across countries, a situation that helps counterfeiters exploit regulations and get away with their crime by bending rules or by paying a small penalty. These criminals operate a vast, intricate network that can be leveraged to source raw materials or even manufacture counterfeits in a region where the legal and regulatory framework for fighting such practices is weak.
Non-standardised information exchange protocols in the supply chain
Each stakeholder in the supply chain has setup their own track-and-trace mechanism; this non-standardised information exchange between stakeholders results in the loss of vital information, meaning there is no end-to-end traceability.
An opaque supply chain from supplier to the patient
The current supply chain is characterised by a linear approach resulting in a gated flow of information; the end users are rarely able to track back to the source should they want to. There are multiple points where a counterfeiter can introduce spurious ingredients or completely replace the genuine drug with mislabelled or counterfeit ones.
How can Blockchain and IoT help?
Blockchain has the capability to keep the ledger (the end-to-end record) open and accessible while also keeping it immutable. Using blockchain, each stakeholder can add data to the ledger if and as required and all the information is maintained in a transparent system. What IoT does is help in collecting and tracking granular data (small bits of information) specific to a particular product.
A transparent supply chain, encompassing all stakeholders like suppliers, manufacturers, distributors and point of sale partners, is created when products are labelled with serial numbers and packages containing these serial numbers are scanned and recorded in the blockchain at every point of transfer along its journey from supplier to patient. In fact, even chemical ingredients used as raw materials can be tracked and linked to the finished products. Additionally, this blockchain can capture critical details like location, number of handovers and conditions during transport and storage (like temperature and humidity) from the IoT devices attached to the packaging, making the supply chain live and visible to all stakeholders. And because this passive data is recorded using an automated process, this reduces the possibility of record tampering. At each step along the supply chain a record is generated and appended to the blockchain, creating an uninterrupted, permanent history of the product and its journey, with full traceability.
A standardised blockchain and IoT-based track-and-trace digital solution can capture all the details end to end, enabling anyone along the way to access a complete history of the medicine. Given that this involves a digital data trail, this provides far more flexibility than traditional serialisation, batch coding and track-and-trace. It will also make it possible to authenticate products at a unit level.
If this system can be enhanced and standardised, it could serve as a template for other countries, helping them to fast track setting up their regulatory framework.
Other anti-counterfeiting solutions currently in use in the pharmaceutical supply chain:
- Product level: forensics markers, tracers, taggants, quantum dots, image scanning, laser etching, direct marking, unique identification, fingerprinting, paper analytical devices, ultraviolet scanning and spectroscopic scanning
- Printing and label level: security and colour-shifting inks, tamper-indicating materials, micro text, covert (hidden) and overt markers, traceable label substrates, label-image-based scanning, micro tags, smart labels, and peel and text
- Packaging configuration: tamper-evident seals, holograms, tags (i.e. RFID), packaging aggregation, asset tracking, embedded coding, covert coding, smart inks and dyes
- Embedded combinations: embedded combinations of security and anti-counterfeiting features in labelling and packaging layers, often at a covert level
- Data and digital level: customer authentication portals and barcode scanning, biometrics, chemical sniffing and tasting technologies, digital fingerprints, encryption and security algorithms
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