.The pharmaceutical sector is riddled with instances of fraud, and the use of blockchain technology may be able to help battle this issue.
By Alyssa Kwan, Jessica Pang, Boris Kung and Crystal Lam
Since 2019, COVID-19 has taken a toll on public health throughout the world. And pharmaceutical firms have been competing to provide the general public with new medicinal goods. Concurrently, the epidemic has led to an increase in the number of vaccinations being sold on the underground market all over the world. Which poses a serious risk to the public’s health. The World Health Organization (WHO) warned about the risk posed by counterfeit COVID vaccinations in April 2021. As an illustration. The discovery of counterfeit Pfizer vaccinations in Mexico and Poland, each of which cost one thousand US dollars, is one example.
In addition to the pandemic, the globalisation of the pharmaceutical business is another factor that contributes to the expansion of fraudulent activity in the pharmaceutical sector. Pharmaceutical frauds are illegal acts that involve the production, sale, and distribution of counterfeit pharmaceutical products for the purpose of making a profit. These fraudulent operations take place in the pharmaceutical industry.
The use of blockchain technology, which is now being tested in a number of industries to combat fraud. Including the real estate market, the shipping industry, and the wine industry, has the potential to reduce the amount of illicitly produced pharmaceuticals.
Discrepancies in the method through which pharmaceuticals are manufactured
Before we go into how blockchain technology may tackle the problem of fraud in the pharmaceutical industry. Let’s first explore how pharmaceutical businesses produce medications and deliver them to customers like you. The five most important steps in the pharmaceutical supply chain are as follows:
Manufacturing facilities are where pharmaceuticals are really made.
They are then given to wholesale distributors to be distributed.
The medications can be purchased at various retail, mail-order, and pharmacy stores.
Pharmacy benefit managers determine whether or not the product is appropriate for patients and whether or not it is affordable.
Customers receive the items from their own pharmacies.
In spite of the seemingly uncomplicated nature of the stages, the production of medications is actually rather difficult. As a result of the globalisation of the pharmaceutical sector, the nations in which the raw materials are sourced. The products are manufactured, and the finished goods are packaged are all in various locations. It is possible to repackage pharmaceuticals and transport them to another nation in order to take advantage of different currency rates. Due to the lengthy nature of the procedure, it is susceptible to fraudulent tactics.
A major burden has been placed on healthcare systems all around the world as a direct result of the COVID-19 epidemic. And nations have been forced to make rapid adjustments in order to fulfil. The immediate need for medication and other medical supplies. As a direct consequence of this, a number of nations have eased some of the rules and limitations that pertain to medications. In the middle of such a crisis, it is much simpler for fraudulent or counterfeit operations to take place and go unnoticed. As a result, those who engage in such activities are able to make substantial profits.
The currently available options
The adoption of managerial economies of scale by pharmaceutical businesses is one of the most prominent techniques taken to combat the widespread problem of pharmaceutical fraud. Businesses that have a strong reputation and plenty of resources may afford to make investments in production and delivery professionals who can keep an eye on their work.
For the purpose of medication monitoring, a different strategy involves putting one-of-a-kind design components within the package itself. Such as barcoding and radio-frequency identification (RFID) tags. However, counterfeiters have gained the ability to mimic such design aspects as well. Which reduces the usefulness of those design components in combating the sale of fake pharmaceuticals.
To the rescue, blockchain technology
Blockchain technology is the answer to the problem of how to achieve high levels of traceability. And data transparency in the supply chain of medical items while keeping costs to a minimum. The ledger that keeps the record of ownership of digital assets. And blockchain technology is decentralised and dispersed across several nodes. Because the data that is kept on the blockchain cannot be altered. It has the potential to be a genuine disruptor in areas such as. Cybersecurity, payments, and healthcare, which are plagued by fraud.
The history of any digital asset may be viewed in its entirety and transparently. Through the use of a network that is decentralised. Because each piece of data that is obtained is stamped with the time and origin. The integrity of the data is maintained. It is possible to update the data, but the version history would never be overwritten if that were to happen. Because everything would be recorded in a public log, data could not be lost or altered in any way. Making this one of the most revolutionary and promising solutions to lessen the likelihood of fraudulent activity and security breaches.
Assigning a digital identity to a real product is essential since the vast majority of pharmaceutical scams are perpetrated as a result of harmful traces. By offering a safe and open system for tracking pharmaceutical items all the way through the supply chain. Blockchain technology may be utilised to assist in the reduction of the distribution of fake or untested medications.
Recording data about a medicine, such as its expiration date, manufacturer’s name, production date. And ingredients, on blockchains through hashes onto prior records might be the first step in the process. This creates a chain of identifiable data blocks that can be traced back to the original record. Customers, wholesalers, retailers, pharmacies, and distributors. May all have access to the information by scanning the QR code that was produced by the producer of the product. By doing so, people will be able to determine whether or not they are purchasing fake pills. And learn further information about the item with only a simple scan of the code.
One of the businesses that is actively utilising blockchain technology to combat counterfeit pharmaceuticals. And to safeguard the pharmaceutical supply chain is FarmaTrust, which is located in the United Kingdom. They put in place the “Track and Trace” system, which enables customers to preserve an unchangeable record of all of their transactions and data. FarmaTrust has also developed an app called Consumer Confidence that is aimed at assisting customers in recognising genuine items. Consumers are able to verify the genuineness of medications by scanning a barcode located on the product package using the app. Due to the fact that the information is connected and updated in real time. Consumers are given the instruction to return a product. If a regulator or manufacturer has declared it to be unsuitable or if there have been abnormalities in the product’s transaction history.
By offering traceability with sources that can be verified, blockchain technology’s distinctive characteristics. Such as immutability and decentralisation, can be of assistance to the pharmaceutical sector in its fight against the production of counterfeit medications. Despite this, it nonetheless presents its own unique set of difficulties. To begin, the installation of the internal system required to make advantage of blockchain technology can be quite difficult and pricey. Making it unlikely that smaller pharmaceutical businesses would be able to afford it. In addition. In order for tracking to be possible, it will still require integration with data capturing techniques such as barcodes and RFID tags affixed to parcels.
Having said that, as blockchain technology and its uses continue to advance. It is conceivable that there will be more complete solutions to combat the sale of counterfeit medications that combine blockchain with other technological approaches.