The pharmaceutical supply chain is at the hub of a $1.27trn industry. Yet due to its inherent sophistication and fragmentation, it is difficult to manage, regulate and protect, making it an attractive target for counterfeit drug production and infiltration in the global supply chain.

According to the World Health Organization (WHO), approximately 1 in 10 medical products circulating in low and middle-income countries are either substandard or falsified. Counterfeit drugs, which are devoid of the essential active ingredients, can cause severe patient harm, the absence of trust in healthcare systems, and, in the worst-case scenario, loss of life.

Detecting and preventing counterfeit medicines is challenging, primarily due to the lack of a standardised system to track drug movement and stakeholders’ need for more awareness.

With its decentralised, transparent, controlled, and secure approach, blockchain has emerged as a potential solution. Its fundamental principle of no repetition and symmetry of the object makes it an effective tool for tracking and verifying drug authenticity throughout the supply chain.

However, despite its effectiveness and the counterfeit drugs market estimated to be over $200bn, blockchain technology has yet to be fully implemented in the pharma supply chain, according to a 2023 review of blockchain technology.

Living up to post-Covid expectations

According to a 2020 Harvard Business Review analysis, blockchain can revolutionise supply chain management by improving product traceability and enhancing coordination between partners. The technology can address issues in the pharma supply chain by providing timely data and increasing shared data’s authenticity, integrity, and invariability, a 2023 review by Swedish researchers confirms.

The Covid-19 pandemic accelerated the need for greater data transparency, better technology deployment, and improved ways of connecting information along the supply chain. Manufacturers can prevent counterfeit drugs by utilising blockchain technology for drug provenance verification systems, serialisation, and clinical trial data management.

A 2023 research study explored how blockchain can support pharma supply chains, especially in emerging country contexts like Egypt. The researchers discovered that adopting new technologies is crucial to improving supply chain activities and processes in today’s complex and dynamic business environment. By reducing contracting costs, processing costs, and lead times, blockchain positively impacts transaction costs and ensures the safe delivery of medications.

However, a lack of transparency, mistrust in collaboration, and unwillingness to share data can pose significant challenges for this global industry, as reported by another 2023 research study. The global pharma industry also experienced a 69% decrease in company filing mentions of blockchain in Q4 2023 compared with the previous quarter, as per GlobalData.

GlobalData is the parent company of Pharmaceutical Technology.  

Ensuring standardisation is one of the biggest hurdles as all parties must agree on a common set of standards and protocols to track the movement of medicines for the system to function effectively. Furthermore, regulatory and legal obstacles must be addressed before implementing the system.

Blockchain technology innovation

Several tech companies, including Novo Nordisk, Blockpharma and SoluLab, have touted their blockchain capabilities for pharma. In particular, IBM has said it can “provide transparency and enable trust” through blockchain for the global pharma supply chain.

Boehringer Ingelheim and IBM have partnered, enabling Boehringer to use IBM’s foundation model technologies to discover novel antibodies for developing efficient therapeutics. The company will use an IBM-developed, pre-trained AI model that will be further fine-tuned on additional Boehringer proprietary data. The duo’s collaboration is the latest in IBM’s efforts to use generative AI and foundation models to accelerate the discovery and creation of new biologics and small molecules.

“A key distinctive feature of such generative AI and foundation model technologies is the rich representations in these models that can capture the myriad nuances of the structure and dynamics of molecular interactions,” Jianying Hu, PhD, IBM Fellow, Director, HCLS Research Global Science Leader, AI for Healthcare, IBM Research tells Pharmaceutical Technology on the drivers behind IBM’s collaboration with Boehringer Ingelheim.

Generative AI and foundation models for therapeutic antibody development achieve these capabilities by pre-training through self-supervised learning on large amounts of multimodal data, including drug-like molecules, proteins, interactions, single-cell RNA sequences, and other biological data.

The tech is currently still in the exploratory phase. “These models need to be validated and enhanced through iterative rounds of web lab validations, and their values need to be ultimately proven through clinical trials before achieving large-scale use and impact in the industry,” says Hu.

“The use of generative AI and foundation models for the detection of counterfeit drugs has not yet been explored,” Hu says, and indicates it is not within the scope of IBM’s collaboration with Boehringer Ingelheim.

Those who have embraced blockchain technologies have recognized their inherent characteristics, such as transparency, immutability, and decentralisation. Blockchain is also compatible with other technologies, such as radio frequency identification (RFID) and barcodes, and is accessible throughout the supply chain in real-time.

The MediLedger Project utilises blockchain technology to tackle counterfeit drugs. The project uses blockchain to track and trace prescription medications across supply chains and provide transaction-related data like contracts, customers, and products, designed to ensure industry-level automation, authenticity and trust.

Another company, Cypheme, has developed an anti-counterfeiting system that strives to reduce the number of fake medications sold. Using its anti-counterfeit technology, by using a smartphone and scanning the app, the Cypheme system can spot a fake product, geolocate it, put it on a map and raise an alarm.

Manufacturers can enjoy enhanced visibility into the movement of their products thanks to blockchain, which can help prevent the distribution of counterfeit drugs. Distributors and pharmacists can easily verify the authenticity of medicines and ensure they meet quality standards Moreover, patients can benefit from increased confidence in the drugs they receive, which can improve their overall health outcomes.