Blockchain Prevening Theft, Counterfeiting of Drugs in Pharma: Reports Say

A pair of new pilot projects in the pharmaceutical industry are demonstrating that blockchain technology is an effective prophylactic  against counterfeiting and theft of prescription drugs during transportation through the global supply chain, according to new research released this week.

             This is a vital public health concern, as, according to Interpol, about one million people die yearly, as a result of counterfeit prescription drugs, now an estimated 30% of all pharmaceutical products sold overseas.

           One thriving pilot is led by DHL and Accenture, which is monitoring pharmaceutical products from manufacture to prescription, and clamping down on counterfeit medicines entering the supply chain. Another pilot, MediLedger, uses distributed ledger technology to create an “interoperable system” to enable management of ownership records and transfers of Rx drugs in the U.S. Genentech and Pfizer are collaborating, as is WalMart.

             Driven by required compliance with regulations stemming from the Drug Supply Chain Security Act (DCSA), which was passed in 2013 by the U.S. Congress. 

            “Every link in that chain must be secure: From the moment finished drug products leave manufacturing facilities to final delivery to pharmacies or providers’ offices where medicines are ultimately dispensed to patients,” said Dr. Scott Gottlieb, commissioner of the U.S. Food and Drug Administration (FDA), the regulatory agency charged with pharmaceutical safety, in recent remarks at the public meeting in White Oak, Md. “While the U.S. drug supply chain is among the safest in the world, complacency isn’t an option. Continued improvements in supply chain security are vital because we face increasingly sophisticated criminal organizations who intend to profit from the introduction of fake, adulterated, or diverted drugs into the U.S. system.”

Counterfeits Booming

            Doctor Gottlieb said that counterfeit pharmaceuticals are “increasing rapidly” globally, and that technological advances in the supply chain are the primary means to stop the criminal activity.

            The MediLedger project utilizes blockchain technology to track and trace prescription medicines, an end-of-year, 2017 report, released this week, indicates. The project also aims to demonstrate industry and government’s ability to prevent counterfeit medicines from entering the supply chain.  Compliance with the DCSA has a number of “staggered effective dates,” according to the MediLedger report, and over the past several months, the MediLedger Project has developed a blockchain-based system for tracking legal change of ownership of prescription medicines.  “The project’s blockchain-based system appears to fully meet the requirements set forth by DSCSA and is capable of acting as the interoperable system for the pharmaceutical supply chain prescribed in the Act,” the report said. “ In addition, MediLedger has proven that it can meet the data privacy requirements of the pharmaceutical industry itself.  In particular, it can guarantee that all supply chain handshake transactions posted to the blockchain are fully obfuscated, ensuring that no business intelligence is leaked.  This will allow nodes in the blockchain system to be hosted by numerous unique parties while both safeguarding sensitive transactions and ensuring the immutability of each supply chain handshake transaction.”

Trade Identifiers

            What is more, MediLedger blockchain technology is being used to identify the origin of serialized global trade identifiers (SGTINs) and to trace the provenance of drugs back to “their original manufacturers.  Since each transaction forward in the supply chain can reconfirm the integrity of a specific product, the movement of products without an authentic pedigree can be prevented.  This functionality has the potential to expedite investigations and recalls, making illicit drug movement detectable and greatly strengthening safety capabilities in the industry,” the report indicated.

            The project being led by DHL and Accenture, in the meantime, has completed its proof of concept phase. The partners utilized blockchain technology to track pharmaceuticals from their manufacture to their prescription to patients. The company’s CIO, Keith Turner, said in a statement that the “irrefutability” of blockchain technologies is preventing tampering with products during supply-chain transportation and delivery, and may actually wind up saving lives of prospective patients.          

For the DHL and Accenture project, partnerships with formed with manufacturers, warehouses, distributors, pharmacies, hospitals and physicians. Simulations performed by DHL and Accenture found that blockchain could handle more than “seven billion unique serial numbers and 1,500 transactions per second.” Further technological development is required, as well as collaboration between all partners in the supply chain of big pharma, experts said. Chain of custody is a forthcoming area of study, and improving the speed of processes is as well.

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