Benefits of Blockchain in Limiting the Distribution of Counterfeit Medicines

A review by Swedish researchers has identified the benefits of smart contracts on blockchain platforms in the pharmaceutical supply chain and its role in combating counterfeit drugs.

While the counterfeit market is estimated to be over $200 billion and despite its benefits, blockchain technology has not been fully implemented in the pharmaceutical supply chain, according to the paper.

Challenges in the pharmaceutical supply chain

Pharmaceutical supply chain problems include long transport distances, low transparency of inventory levels and cargo theft. These could lead to stock shortages, the paper noted.

The review found that therapeutic innovation has resulted in the production of expensive drugs to treat rare diseases, which must be available in a timely manner. These agents must, for example, be equipped with real-time insights.

Benefits of blockchain technology in the pharmaceutical supply chain

Blockchain technology can solve these problems in the pharmaceutical supply chain by providing timely data and increasing the authenticity, integrity and immutability of shared data. This can reduce the willingness to falsify and less accurate data, according to the review.

An advantage of blockchain in the pharmaceutical supply chain is its compatibility with other technologies such as radio frequency identification (RFID) and barcodes, plus its availability throughout the supply chain in real time.

Prioritization for a data-driven 2023

An example shared in the paper was paperless mechanisms using blockchain that provide an immutable and decentralized system to prevent fraud. Smart contracts, which are essential for facilitating international trade and logistics operations, can enable the user to track false returns to the manufacturer and supplier using RFID tags.

Blockchain offers the possibility of non-modifiable data upload with traceability and affordable data storage. In addition, real-time access to data is also available for patients to review their clinical trials, as well as sponsors, reducing the cost of trials.

While the complexity of distribution networks makes it difficult to detect counterfeits, the research highlighted a framework for using smart contracts and distributed ledgers to tackle this problem in the pharmaceutical supply chain.

In conclusion, Kordestani et al. stated: “The end-to-end protection and privacy across a blockchain ensures security for all stakeholders with capabilities such as detecting and mitigating the impact of incidents, providing on-chain auditing and providing transparency to the entire business rather than just focusing on transactions.”