blockchain concept in pharmaceuticals

Blockchain: Anti-Counterfeit Technology in Pharmaceutical Industry

The proliferation of counterfeit drug trade has been fueled by the growth of international free trade and a lack of drug regulation. Technological protection is considered to be the most effective way to avoid this problem.

A medical product is counterfeit when there is a false representation in relation to its identity or source. This includes the product itself, its container, and any additional packaging or labeling information. Counterfeiting can occur with both branded and generic products, and counterfeit items may include products with the correct or incorrect ingredients, without active ingredients, with inaccurate levels of active ingredients, or with fake packaging.

Many types of drugs have been counterfeited, and numerous variables have been linked to it, including insufficient regulation, an increase in the number of intermediaries, a lack of awareness, and many more. As healthcare expenses continue to grow around the world, drug counterfeiting is anticipated to rise in the future. Globalization trends and deregulation continue to open new markets, increasing demand for pharmaceuticals, which may result in the increase of the supply of counterfeit products as well. Therefore, many anti-counterfeiting strategies were developed to protect the supply chain of industrial and consumer goods.

The Need for Anti-Counterfeit Technologies

Counterfeit drugs may result in drug recalls and liability suits. Furthermore, brand loyalty is harmed as a result of consumers’ perceptions of increased dangers when utilizing a company’s products. This can be avoided with an effective anti-counterfeit strategy that protects patient safety. Legal actions against illegal dealers, technological countermeasures, consumer education and information, private investigations, and cooperation with law enforcement agencies are some of the most effective approaches to prevent counterfeiting. Anti-counterfeiting technology implementation is the most significant preventive method. They not only provide verification, but they also make making a convincing clone of a medicine more difficult and expensive.

The consequences of counterfeit drugs are manifold:

  1. Patient’s safety and security
  2. Social and economic consequences
  3. Patients do not get safe drugs
  4. Producer patent and copyright infringements (loss of revenue)
  5. Government loss of taxation revenues and undermining the National healthcare system
  6. Considerable resources are required to combat the practice of counterfeiting

What Makes an Ideal Anti-Counterfeit Technology?

An ideal anti-counterfeit technology should have a high level of security (non-clonable), faster product application and authentication, proven standards, difficult to remove and reapply, easy to inspect, have automatic authentication, useable by consumers, and must be legally compliant by the industries. 

READ MORE: IDLogic Cryptographic Identity Authentication – General 4K

Blockchain for Drug Traceability

Pharmaceutical supply chain (PSC) stakeholders include raw material suppliers, manufacturers, distributors, regulatory bodies, pharmacies, hospitals, and patients. Because of the complexities of product and transaction flows in PSC, a robust traceability system is required to determine current and past product ownership. Furthermore, automating the track and trace process improves regulatory control and assures product safety. Blockchain-based medication traceability is a potential method for developing a distributed shared data platform for the PSC’s immutable, trustworthy, accountable, and transparent system.

What is Blockchain Technology?

Blockchain technology is a decentralized, distributed ledger system that enables the efficient and secure tracking of products. The blockchain technology that underpins crypto currencies has been used to a variety of industries, including banking, supply chain management, energy, commodities trading, and healthcare, as well as a range of other enterprises that require transaction processing. To address the issue of counterfeit medications, blockchain technology has the potential to provide a pragmatic solution for safe and immutable drug traceability and provenance. Blockchain technology enables the creation of a distributed shared data platform for storing and sharing transaction data among various supply chain stakeholders, while also ensuring that the data remains accessible, immutable, transparent, and secure via cryptographic techniques and is only accessible to authorized parties. As a result, it enables a proactive strategy to tracking, detecting, and managing counterfeit products in pharmaceutical supply chains.

The blockchain technology is capable of recording the data across the entire process, transaction of the operation, and the records cannot be falsified. Because all nodes in the network share the same data, the information in the network space is more transparent, and the behavior is more traceable.

Advantages of Blockchain Technology

Despite its complexity, blockchain’s potential as a decentralized method of record-keeping is nearly limitless. Blockchain technology may have benefits beyond those listed above, ranging from increased user privacy and security to lower processing fees and fewer errors.

1. Increased accuracy by eliminating the need for human intervention in verification

2. Reduced costs by eliminating the need for third-party verification

3. Decentralization makes tampering more difficult

4. Technology that is transparent

5. Provides an alternative and way to secure personal information for citizens of countries with unstable or underdeveloped government

How Blockchain Can Combat Counterfeit Drugs

Pharmaceutical firms monitor their suppliers, assure the quality and authenticity of their supply chain, and maintain strict quality control. Even still, it has been difficult to ensure complete safety from illegal behavior – at least until now.

Blockchain technology can provide full protection against the entry of counterfeit medications into the supply chain. Its advantage stems from an intrinsic characteristic that permits data to no longer be kept centrally. Instead, that data can be stored in a decentralized database on a distributed network of nodes. Individual wholesalers are no longer need to manage vast numbers of product lists and manufacturer addresses, allowing them to comply with DQSA standards while eliminating errors and saving the entire supply chain money.

Each entry is encrypted uniquely. Due to the fact that all modifications must be authenticated by all nodes in the system, blockchain solutions are virtually impossible to hack, as the data cannot be altered after the fact. As a result, blockchain technology significantly simplifies the detection of fraud and the identification of weak links. And businesses can receive complete visibility into their supply chain.

Additionally, the technology enables each consumer to verify the authenticity of the medication they purchased — for example, by scanning a QR code on the container with an app. This enables each consumer to easily determine whether their goods are genuine or counterfeit. Thus, blockchain technology not only protects trademarks, but also ensures the safety of products and patients.

Apart from integrating distributed ledger technology and QR codes, blockchain solutions integrate with a variety of other technologies. To enhance protection against counterfeit medications, it can be paired with RFID or GPS — technologies that rely on contactless data transmission. With such combinations and integration into existing systems, blockchain technology can be tailored to the unique requirements of each business and offers numerous benefits. Only through the deployment of blockchain technology is it possible to ensure the highest level of product authenticity. Simultaneously, it acts as an efficient deterrent to counterfeiters, as it is relatively straightforward to determine exactly where fakes entered a supply chain.


During this crisis, blockchain is garnering deserved attention from businesses. Having been trivialized and connected exclusively with cryptocurrencies for a long period of time, it is now being acknowledged as offering the required transparency and security that can contribute to saving lives.

About IDLogiq

IDLogiq is made up of a team of deeply committed, with multidisciplinary professionals, which includes healthcare specialists, DSCSA and supply chain experts, advanced security technologists, and more. The team comes together to create a technological and trusted solution to supply chain. IDLogiq’s core mission of helping enterprises combat against counterfeiting all over the world to resolve $1.8 Trillion and 1 million lives lost per year and counting.

IDLogiq team envisions a world free of counterfeit drugs and a global environment working together to optimize business efficiency, maximize business intelligence via the application of our state-of-the-art IDLogiq technology.