New blockchain technology to fight entry of fake drugs into supply chain

Illustration: Ajay Mohanty
In July this year, the drug regulator of Rajasthan found certain medicines by four leading pharmaceutical companies to be of substandard quality. When the companies were questioned, they examined the drugs and found that these had not been manufactured by them at all. The medicines were fake — part of the burgeoning counterfeit drugs industry in the country.

However, in spite of the proliferation of fake drugs in India, so far the efforts to combat the menace has been through traditional means — via tip-offs and surprise raids. For example, some years ago a fake drug manufacturing unit was busted near the Bangladesh border. The unit was manufacturing spurious Phensedyl, a  cough syrup by pharma major Abbott. 

This situation may change soon. The government’s planning body Niti Aayog, in collaboration with Oracle Technologies and Apollo Hospitals, is working on a technology that will enable consumers to scan the barcode of every medicine package and instantly get the information on its manufacturer, the date of production, its path of transport and the date it reached the retailer. Hence, the consumer can check if the medicine is genuine or not before buying it. 

As Ravi Pinto, director (product management), Oracle Cloud Platform, explains, “You can scan the barcode of the drugs, and it will throw up all the information regarding the medicine. This will help consumers check whether it is a fake drug or a genuine one.” 

The technology will not only work for the end-consumer, but along the entire supply chain so as to ensure that no fake drugs enter the system. The proposed date for rolling out the platform is early 2019. 

How it works

The tracing and tracking of pharmaceutical products will be done with the help of new age technologies like blockchain and Internet of Things (IoT). The pharma sector is heavily dependent on logistics, which makes it vulnerable to foul play. According to Pinto, consignments of drugs will be tracked remotely through the use of IoT. “The data captured through IoT will be sent to the cloud server  that will then be entered into the blockchain ledger,” he says.

Since blockchain is a software that provides a digital ledger system to record transactions, tracking of consignments becomes easy for drug manufacturers, controllers and other stakeholders such as hospitals. This eliminates the possibility of mixing fake drugs with genuine ones. And since blockchain does not use a centralised system to store data, the process is also hack-proof.

What’s more, since it allows users to see transactions in real time, any revision on the chain requires retrograde action on all associated blocks. So, in a way, the real time monitoring of data across the pharmaceutical supply chain will act as a third eye on fake drug dealers.

“Niti Aayog’s initiative to form a consortium with Oracle Technology and Apollo Hospitals will leverage blockchain technology to overcome the counterfeit drug problem,” asserts Anna Roy, advisor at Niti Aayog. “We are acting as the enabler here and with time, the consortium will be scaled up to include other stakeholders,” she adds.

Oracle is developing the app through which the consumer will be able to scan the bar code of a medicine. Post this scan, a call will be made to the database stored in the blockchain ledger, which will then provide all the information available to the consumer. “This app can be downloaded for free on a smartphone. It will take around three months to complete the system,” Pinto says.

Fake drug problem

According to the World Health Organisation (WHO), around 35 per cent of the fake drugs sold globally come from India. WHO had also pointed out that in low and middle income countries like India, one in 10 medical products (pills, vaccines, injectables and so on) in circulation are either substandard or fake. The report said that substandard or fake drugs promote anti-microbial resistance in people, which could make diseases impossible to treat in the future. 

Apart from their serious health risks, spurious drugs also make pharma companies incur huge revenue losses. According to industry body Assocham, in 2015, the value of the counterfeit drug industry in India was pegged at around Rs 150 billion, which was almost 25 per cent of the total worth of the pharma industry in the country.

Despite the enormity of the problem, the current methods of weeding out counterfeit drugs are quite archaic. “To verify the genuineness of drugs, we usually follow the method of sampling. Also, we investigate further if we find that the labels of drugs have been tampered with,” says a senior official of the Karnataka Drugs Control Department. 

However, there have been a few technological interventions recently, enabling the Centre and some state governments to tackle the problem more effectively. For instance, Gujarat has implemented an online drug SMS alert system for retailers for ‘unsafe’ drugs. The state drug control authority worked with National Informatics Centre to develop the software.

Abbott too has introduced an SMS authentication scheme for customers. Those buying its Duphaston tablets can message the batch number to a dedicated number to verify the authenticity of the drug. Similarly, pharma major GSK will be soon using QR codes to store product information on packs which will do away with the need to print leaflets. These QR codes can be an effective tracking mechanism, allowing the manufacturer to keep tabs on the drug’s circulation in the market. Some other companies are printing a hologram on the packaging and mirco-embossing the product name on cartons.

The government is also mulling the possibility of putting in a track-and-trace mechanism for the top 300 drug brands in the country by printing a 14-digit unique number on the labels of these drugs.

Experts believe that as blockchain technology evolves, India’s efforts to root out counterfeit drugs will definitely make headway, leading to a much safer public health system in the country.

How it works
| Manufacturers scan each drug package before it leaves their plant and upload the data into the blockchain  
| On-route to the retailer, IoT devices send mobility data to the cloud server, which in-turn records it to the blockchain ledger
| Any diversion of the packages will trigger an alarm 
| Consumers can scan the barcode using a free mobile app to verify the authenticity of the medicine 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel