The problem of counterfeit drugs is a worldwide problem. Operatives within the supply chain will often replace authentic pharmaceuticals with look-a-like fakes, passing them off as the real thing. In 2019, the OECD estimated that the trade in counterfeit pharmaceuticals was $4.4 billion worldwide, and possibly higher.
This fact has led to calls for greater supply chain oversight. Companies, regulators and patients all want systems that reduce or prevent fraud and ensure that stakeholders can trace the provenance of drugs to their source.
Lack Of Progress
In 2010, organizations such as the WHO called on the industry to improve their methods. It pointed out that fake medications account for up to one percent of drugs in developed countries, and over 30 percent in developing areas.
Unfortunately, back then, the industry didn’t have many tools at its disposal to respond. One option was to introduce more serialization on products and then perform end-to-end checking. However, criminals found it trivial to simply copy barcodes and QR labels and pass off fake products as their own.
Another option was to attempt to track shipments themselves but, again, this proved challenging. As consignments made their way across the globe, it was impossible for drug companies to monitor them throughout their journey, from production to dispensary. Sending a human being along with the products was technologically feasible, but wasn’t viable economically or logistically.
What was required was a high tech approach. Pharmaceutical companies needed a way to keep tabs on their products and fight against tampering, without imposing high costs on their partners. However, until recently, there was no one in the industry who could provide it.
Regulations haven’t been particularly helpful in this regard either. The FDA recommended that firms in the sector use an eight-digit SNI. However, this proved too short to accommodate the number of shipments the industry makes each year.
Regulators also pushed for the inclusion of radio-frequency identification (RFID) to be included on packages. However, a lack of integration across the industry made this challenging as well.
The problem isn’t so much a lack of technology for securing the supply chain – that exists. It’s more a lack of incentives for companies to closely scrutinize their processes. If there is fraud, it’s not the vendors that suffer – they get paid anyway. Instead, it’s the hospitals, clinics and patients
A New Approach
Despite this, there are green shoots of hope on the horizon. Startups, such as Authena, say that they’ve largely solved both the technical and incentive sides of the problem, and are simply waiting for industry participants to adopt their processes.
Authena serialization tracking (https://authena.io/track-and-trace-serialization/), for instance, gives patients and medical staff clear track-and-trace capability over all drugs that come into their possession. The company uses near-field communication (NFC) technologies to serialize and then trace products as they make their way through the system, providing them with an indelible blockchain-passport, certifying origin, authenticity and integrity.
Breaking it down, the concept goes something like this:
- Vendors attach encrypted NFC devices to their products. These have anti-tamper systems that prevent anyone from removing them, replacing them, or reprogramming them
- Participants in the supply chain read the tags with any mobile device as they would do with barcodes or QR codes
- Information is then uploaded to a blockchain network to create an immutable entry for the item. Data might include instruction, product details, security characteristics and warnings
- End users can then read the NFC devices when they come to use the product and cross check them against the blockchain entry. This provides them with all the information they need about the product’s origins, integrity and authenticity.
Patients and medical practitioners appreciate this approach because it gives them power to improve supply chain standards. As final consumers, they can insist that vendors use these systems to track drugs as they make their way across the planet. If there is any indication of tampering, they can simply send the product back and alert the supplier that there is an issue.
Without robust serialization track and trace systems, patients will continue to receive the wrong drugs. Thus far, the industry has failed to rectify issues in the supply chain because of a lack of incentives. However, new solutions give power back to patients. With them, end-users can insist that drugs have verifiable origins via blockchain-based NFC devices. If suppliers don’t offer them, they can simply go to companies that do.