Blockchain is set to Burst the World’s Largest ‘Fraud Market’ Bubble!
You will definitely not believe this but the most counterfeit goods aren’t clothes, accessories, shoes or even electronics. You will also be shocked to find out that, the surge of counterfeit products is within the pharmaceutical industry. Counterfeit pharmaceuticals are the most lucrative sector in regards to illegal goods. These pharmaceuticals make approximately $163-$217 billion annually. Moreover, according to the World Health Organisation (WHO), 10% of drugs circulating around the world are counterfeit. In developing countries, about 33% of the drugs are counterfeit while in developed countries these statistics stand at less than 1%. In terms of online selling, 50% of the drugs sold are fake. The most shocking fact around this is that 1 million die annually due to these drugs. These are just some of the gut-wrenching statistics that face us today. That also means that you should start questioning where the next pill you take comes from.
This problem does not just stem from an unknown area. This stems from issues within the drug supply chain, where there are multiple parties involved. The last “trusted” party within the supply chain is the pharmacist. We all seem to trust these people because they have the superpower of deciphering the doctor’s scribbles and they are also trusted people to know which drug is which. However, throughout the whole supply chain, how sure are we that the ingredients are correct, the packaging is real, the drugs have not been tampered with and lastly, whether they haven’t been stolen. These are aspects that not even the pharmacist can attest to knowing due to the lack of transparency. It is not possible to know what happened between the manufacturer, wholesaler, supplier and logistics company. The holes that exist within this supply chain makes even patients question the authenticity of the product. With a million people dying annually, this should really be a cause for concern. Question is, is this really the case for pharmaceutical companies? Are they worried?
According PwC’s Strategy& 2017 report, the pharmaceutical executives survey shows that the companies are not really eager to spend more in fighting counterfeit drugs. There is acknowledgement that there is a problem within the current supply chain system, but most executives feel that they have already spent too much in regards to drug compliance measures-that are aimed at fighting these drugs. In total, it is estimated that around €500 million has been spent by pharmaceutical companies over drug compliance. Other problems raised were that traditional anti-counterfeit tools are currently not sustainable and that putting barcodes on drugs is not effective. However, the executives state that they are anticipating better solutions, that are effective and sustainable. One most exciting solution to all these problems lies in Blockchain technology.
How? You may wonder.
Blockchain technology is set to improve the pharmaceutical industry in a way that will definitely burst the bubble of counterfeit drugs. This will also save time and costs in regards to drug verification.
The technology could allow all the parties in the supply chain to scan the barcode of every single drug at point of contact. This means that the manufacturer scans the barcode and it is recorded on the DLT and the next party; being the wholesaler also scans and records the barcode and it is also recorded on the DLT. This will create a trail of the drug, so barcodes aren’t so bad after all! Moreover, in order to make the delivery more secure, the drivers that deliver the drugs from one party to another could also be tracked using bio-metrics. All the data collected will be stored on the blockchain. In order to ensure quality, sensors could potentially be used within the blockchain, to ensure that the drugs have the right temperature storage and humidity. The creation of this will provide a clear journey of the drugs before they reach pharmacies and patients. This could be a public blockchain that even allows patients to track the journey of their drugs.
Why blockchain?
Using blockchain technology in the pharmaceutical industry could have a lot of benefits. These benefits include the fact that it would be easier to track where drugs come from and this will ensure authenticity within the supply chain. The tracking of drugs could also show the point at which the drugs were compromised, if any. This ensures that the negative effects associated with patients taking counterfeit drugs are reduced significantly. Moreover, the data about the drugs will be secure on the blockchain due to the immutability aspect of the technology. The data will also be accessible to all parties, inclusive of pharmacy inspectors and patients, hence anyone can verify the quality of the drugs within the industry. The data will also show expiry dates, thus medication that needs to be disposed at any point, will be taken out of the supply chain. This transparency within the whole system will eventually ensure a significant decrease in regards to counterfeit products. More lives can be saved, especially in developing countries where the World Health Organisation reports that 1 in 10 medical products, is counterfeit.
It’s true that the executives surveyed in the PwC report do not feel a strong urge to fight this. Maybe the reason is understandable as they have spent millions with the current system. However, some companies are willing to seize the opportunity of using blockchain to gain the competitive edge over the others. One exemplary company is Sanofi- a large pharmaceutical company that always aims to deliver innovative solutions in the healthcare industry.
What is Sanofi doing to fight counterfeit drugs?
Earlier this year, Sanofi hopped on the Blockchain train to ensure transparency within the healthcare industry. Sanofi aims to “revolutionize trust in everything from clinical trial results to combating counterfeit drugs”. They also intend to leverage on the fact that blockchain technology can trace medication from production to the patient. They believe that the information should be available to government health systems, pharmacies and patients. This will ensure transparency within the supply chain and easier compliance to medical acts.
This revolution will definitely put Sanofi ahead of many resistant pharmaceutical companies. It will also lead the way for blockchain innovation within the health industry.
Pharmaceutical companies across the globe would want to follow in the footsteps of Sanofi in order to guard their brands and also be ethical. It’s not only about the profits- it’s about the triple bottom line; people, profits and our planet.
