Protecting the pharmaceutical supply chain

Counterfeiting is a huge concern for the pharmaceuticals industry, with an estimated one in 10 medical products circulating in low and middle income countries (LMICs) falsified, according to the World Health Organisation.
By Tammy Lovell
05:50 am

Governments, industry and regulators worldwide are trying to make the pharmaceutical supply chain more bullet-proof and the use of blockchain based track and trace technology has been hailed as a possible solution. Blockchain is an electronic cryptographic ledger which creates an immutable record of all events throughout the supply chain, allowing digital information to be distributed without being copied. For the drugs supply chain this has the benefit of passing data in a fully automated and safe way, whilst allowing all stakeholders to verify the authenticity of transactions.


Antimalarials and antibiotics are the most commonly reported counterfeits and up to 30% of malarials in sub-Saharan Africa could be fake. WHO estimates that 72,000 to 169,000 children die each year from pneumonia due to substandard and falsified antibiotics. Meanwhile, a European Commission impact assessment carried out before the introduction of the Falsified Medicines Directive (FMD), estimated that one in 20,000 medicinal packs are counterfeit in Europe and an EUIPO report from 2016 showed that fake medicines cost the EU pharmaceutical sector $11.5bn (approx. €10.2bn) each year.


German pharmaceutical company Merck and Swiss firm Novartis are among those exploring the use of blockchain as a potential solution to track packages throughout the supply chain. Merck has patented a security tool which uses artificial intelligence (AI) and blockchain to link physical objects called ‘crypto-objects’ through their own unique identifiers or ‘fingerprints‘. Any unique feature can be used as a fingerprint, such as a chemical signature, DNA, or image patterns. “This novel technology of combining physical products with blockchain will support the security interests of businesses and their products by offering them new methods of tracking their supply chain through blockchain, Internet of Things and connected workflow environments,” said Isabel De Paoli, chief strategy officer at Merck.


The US Food and Drug Administration (FDA) launched a pilot in February into the use of blockchain technologies to improve the drug supply chain. This will inform the development of the enhanced electronic, interoperable track-and-trace system for industry set to go into effect in 2023 as part of the Drug Supply Chain Security Act (DSCSA). Goals for the system are “to fully secure electronic product tracing, which provides a step-by-step account of where a drug product has been located and who has handled it, establish a more robust product verification to ensure that a drug product is legitimate and unaltered, and to make sure that any party involved in handling drugs in the supply chain must have the ability to spot and quarantine and investigate any suspect drug,” said the former FDA Commissioner Scott Gottlieb.


There is also growing interest in the use of blockchain technology in the EU to comply with the requirements of the FMD, which was introduced in February this year. Under the FMD, manufacturers of all prescription and certain non-prescription medicines must add specific safety features to their packaging which allow legitimate medicines to be tracked at each point of the supply chain right down to the retailer. Since the FMD does not specify how manufacturers implement the serial numbers or data collection systems it requires, blockchain seems a viable choice.

But despite admitting that blockchain has become a “buzzword in how the supply chain will look”, a spokesperson for the European Federation of Pharmaceutical Industries and Associations (EFPIA) told HIMSS Insights it had not yet been widely adopted in the EU due to “lack of common standards, fast moving technology and legal barriers.” He added that blockchain is "just an enabler not a goal in itself, but it could be part of the toolbox used by companies to supplement their own anti-counterfeiting and enforcement efforts".

This article was first published in the newest issue of the HIMSS Insights eBook, which looks at digital transformation in healthcare. MobiHealthNews is a HIMSS Media publication.


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