Blockchain to save lives and stop counterfeit drugs
Blockchain technology has also the potential to transform the pharmaceutical industry. These distributed transaction records can offer logistical and safety advantages for the patient in the of the pharmaceutical supply chain management.
One of the most promising benefits of blockchain from a patient safety perspective is to help stop the tide of the so-called drugs that are characterized by being deficient, illegal, falsely labeled, falsified and adulterated, which slip into the pharmaceutical supply chain.
The use of the blockchain presents two great opportunities to the pharmaceutical sector: the fight against counterfeiting and optimization of the supply chain. The current distribution model of manufacturers, wholesalers and pharmacies is fragmented and manages obsolete and different technologies unable to integrate the processes of monitoring the products in the chain. This has facilitated the trafficking of counterfeit drugs and the emergence of an opportunistic Internet market. No patient or entity can tryly verify the origin of a given drug.
The three business partners must be compelled to show the same transparency in the audit and follow-up of the inventory, since each one depend on the others to guarantee that the patients get real medicines in the safest and fastest possible way. For this they need to give visibility to the supply chain and verify the route of the drug from manufacturing to the patient. If this visibility of the inventory and audit of the distribution of the drug exists, it will be much more difficult for counterfeits to reach the market.
And the impact is very significant. It is estimated that annual losses caused by counterfeit drugs amount to 200 billion dollars. A blockchain-based system could guarantee the registration of the chain of custody for each drug or individual product, and trace all steps in the supply chain.
Blockchain applications are already being explored in the pharmaceutical industry, serving and managing the entire cycle of drug development. Functionalities such as the use of private keys or smart contracts would contribute to this seamless integrity of the supply chain. Smart blockchain contracts define the terms of the agreement and its execution in a way that could help eliminate fraud and reduce costs.
Transparency and traceability also benefit from the use of the blockchain. In the event that a shipment of a drug is disrupted or lost, the data stored in the common ledger provides a quick system for tracking and checking who was the last to have possession. The public availability of the blockchain allows each pharmaceutical product to be traced back to the origin of the raw material used to its manufacture. The decentralized structure of the system makes it impossible for one of the parties to have exclusive ownership of the information and manipulate it for their own advantage.
Manufacturers, distributors and pharmacies now use a variety of tools to manage these processes, but blockchain allows to do things that these other technologies can not. The introduction of a system, for example, in which each participant controls an element of the network and each transaction requires a consensus among the parties involved, would revolutionize the drug supply chain.
Its decentralized nature is also a differential factor. The pharmaceutical companies use centralized databases and could potentially edit, modify or delete records. With blockchain, the records are permanent and can not be altered, which guarantees an absolutely secure data transfer. In this way, companies can avoid human errors, logistical delays and reduce costs.
Blockchain technology presents a unifying solution for the management of the pharmaceutical supply chain. Its distributed structure allows for true management of the supply chain from start to finish and the participation of all interested parties.