Blockchain: Three approaches to fight counterfeit medicine — plus one project as a precedent
Cryptocurrency rates pluming. Blockchain projects closing down. Frustration on the performance of pilots in the corporate sphere. The future of blockchain technology is questioned. An article by a management consultancy recently picked up this hypercritical stance in a particularly prominent way.
I have explained why this is misleading. But of course we enthusiasts have to ask ourselves: where are the approaches that lead to the new qualities the technology promised, e.g. in the health sector.
Expectations were particularly high in this field. Even a prestigious foreign policy and global affairs magazine, Foreign Affairs, took that up. An article “Blockchain and Global Health” summarized these hopes in 2017. And one of the areas mentioned is fighting counterfeit medicine.
The subject is an important one: The market for counterfeit medicines is estimated at EUR 160 billion per year. The World Health Organization (WHO) in a study conducted in 2011 found that for instance in Nigeria 64% of malaria drugs were counterfeit. Tight control prevents this in industrialized countries. In emerging and developing countries it is an enormous problem. It does not take much imagination to measure what it means to be treated with counterfeit malaria drugs.
So it’s about the health of a lot of people, it’s about a lot of money. And there is a technology we expect improvements from. Enough reasons to invest.
Although, at first glance, not much seems to be happening here. But before concluding that blockchain technology is far off, you have to look at the market structure.
For such a system to work, it must involve many companies and institutions. It needs consortia working on a common solution. This is where a blockchain can play off its advantages. Large multinational companies dominate the sector. And they are fierce competitors. Still, some have picked up the ball, formed groups and run pilot projects.
I see two big clusters: One group has formed around SAP and Merck. They develop a blockchain-based solution to contain counterfeiting, using SAP’s ATTP (Advanced Track and Trace for Pharmaceuticals, a traditional software solution) to label shipments of drugs with identifiers. A mobile app allows SAP to track the package and know when it changes ownership. The package barcode allows to verify its authenticity.
A second, even bigger cluster, forms as part of the EU Innovative Medicines Initiative (IMI). In the Blockchain Enabled Healthcare program, nine major pharmaceutical companies, including Novartis, Bayer, Pfizer, Sanofi, form a consortium. Other healthcare stakeholders include hospitals, health authorities, clinical laboratories, patient representatives, universities and blockchain companies. The program intents to have a broad impact. One objective is to let patients check the authenticity of their medication to clamp down the counterfeit medication market.
Apart from these heavyweights, there currently seems to be only one relevant independent player working in this area: MediLedger is developing a cross-industry platform for pharmaceutical products. With the pharmaceutical company Roche, it also has an important partner.
Tech4good NGO Denominator with support of Melinda & Bill Gates Foundation explores blockchain as a backbone for the vaccine supply chain. Not with a focus on counterfeit drugs, because luckily this isn’t a big problem with vaccinations. Yet this project looks especially into the needs and challenges in developing countries. A project to keep an eye on!
This project highlights an issue that the other approaches described above have: The regulatory requirements in the industrialized countries are the drivers for these projects.
This entails a very important role for blockchain positivists: We should ask global pharmaceutical companies in their blockchain innovation efforts to understand their responsibility, especially for emerging and developing countries. We should advocate using open source licenses, establish open systems and standards. Even if it is not the focus of the consortia, social impact projects should be able to utilize the relevant blockchain under the specific conditions in these countries.
