Drug Companies to Apply Blockchain for Tracking Medicines

Pharma industry may use blockchain technology to track medicines and prevent counterfeit pills from reaching the market.

Counterfeit drugs are not just a problem in emerging and third world countries. The phenomenon has grown in the US, especially amid the boost of online commercialization of generic drugs from around the world. As reported by Centers for Disease Control and Prevention (CDC), around 10% to 30% of pills available in developing countries are counterfeit, while in industrialized regions like the US, this figure hovers around 1%.

On Thursday, September 21, a group of companies introduced the MediLedger Project – a platform to utilize blockchain instruments to control pharmaceutical supply chains. The group comprises big names like Pfizer and Genentech, and has already successfully managed pilot programs to track medical products.

If the project gets a green signal, each entity in the pharma network, from drug companies to wholesalers and clinics, will record medicine deliveries on a blockchain system. At the practical level, a large network of computers will track every step of the distribution path by confirming or denying the authenticity of the medicines. This technology will make it difficult for counterfeiters to bring in fake pills. Additionally, it will also be helpful in fighting product theft.  

Commenting on MediLedger, Ryan Orr of Chronicled, the San Francisco-based company producing the blockchain systems for the project, said that the pharma industry has already applied different technologies to control supplies, but these are limited to a mix of various ledgers. A unified blockchain system where each participant manages a node on the network would be a jump-start.

He also said:

"The pharma industry consists of large conservative companies, so it takes a lot of confidence to build up a network like this."

With this project, pharma companies will not reinvent the supply tracking process. In fact, blockchain technology is already being applied in the diamond industry through a company known as Everledger, which offers tools to track the origins of precious stones. Similarly, food merchants are also utilizing blockchain technology to monitor pork and chicken shipments.

According to Orr, at this point the MediLedger Project is trying to convince big companies to shift to blockchain technology. The campaign is likely to succeed, especially due to the recent Drug Supply Chain Security Act, a law that requires businesses to apply a set of actions to create an interoperable system.

Genentech, the drug making company, considers blockchain as a natural extension of its attempts to assign unique traceable numbers to its medicines.

Speaking on the matter, David Vershure, the associate director Genentech, said:

"Genentech, as a leader in serialization among manufacturers, is very interested in exploring what benefits could be realized from this pilot across the entire supply chain to continue to protect products and patients."