Blockchain: Tech for healthcare


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Drug counterfeiting is a major problem in the pharmaceutical industry. Here are some metrics revealed by the Health Research Funding Organization:

10% to 30% of the drugs sold in developing countries are counterfeit;
The counterfeit drug market is worth $200 billion annually;
Internet sales of counterfeit drugs account for $75 billion of the total market;
Most of the counterfeit drugs are manufactured in either India or China;
About 60 different Pfizer medicines and products were being counterfeited around the world as of 2014;
WHO estimates that 16% of counterfeit drugs contain the wrong ingredients, while 17% contain the wrong levels of necessarily ingredients.

The main issue with fake drugs isn’t the fact that they are fake but rather that they can be very different from the original product in a quantitative and qualitative way. Indeed, many of them don’t have the active ingredients they claim they do. This can be particularly dangerous for the patients that take the counterfeit drug since it won’t treat the disease it is supposed to treat.

Furthermore, if the ingredients and the dosages are different, the product can trigger unexpected secondary effects that can lead to death. From a more economical perspective, drug counterfeiting represents an annual loss of 10,2 billion euros for the European pharmaceutical sector and 37.700 jobs are lost because manufacturers employ less people than they would if fake drugs didn’t exist.

How can Blockchain help?

The main characteristic of blockchain technology that is useful in drug traceability is security. Each new transaction added to a block is immutable and timestamped, making it easy to track a product and make sure the information cannot be altered.
A blockchain can be either public or private. To insure the authenticity and traceability of the drugs, the companies that register a product on the blockchain have to be trustworthy. Hence, only private blockchains controlled by a central entity are logical to make sure that fake drugs are not registered. A company’s access to the “drug blockchain” would therefore be a proof that the drugs they produce are authentic.

The pharmaceutical companies decide which actors of the supply chain act as miners. It could be manufacturers, distributors or retailers. Depending on the position on the supply chain, each person could have different rights: labs can register drugs whereas wholesalers can only verify transactions.

When a drug is produced, a hash is generated that contains all the relevant information about the product. Each time the drug moves from an entity to another (eg: from the manufacturer to the distributor), the information is stored on the blockchain, making it easy to track the drug.

One of the main issues today, is that there is no harmony between the systems used to track drugs, and often, stakeholders on the supply chain have an incomplete vision of the origin and destination of the products they receive. Imagine the supply chain like a puzzle where each actor owns a piece of the puzzle.

Most of the time, the complete puzzle is hard to put together, allowing fake drugs to enter the chain and reach the patient. With blockchain technologies, each piece of the puzzle is stored in a safe and secure way, with each stakeholder adding to the puzzle as the drug goes down the supply chain. At each step, it is possible to see the entire puzzle built so far and have a trustful vision of the history of the product.

Furthermore, if a problem is detected and a batch has to be withdrawn from the market, blockchain technologies make it easier for the company to find their products and hence, avoid any complications.

Blockchain technologies help with two main issues when it comes to drug traceability: first, it allows companies to track their products down the supply chain, creating an airtight circuit, impermeable to counterfeit products. Second, it also allows stakeholders, and especially labs, to take action a posteriori in case of a problem by identifying the exact location of their drugs.

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Talia Roman