{"id":22116,"date":"2017-11-14T14:03:29","date_gmt":"2017-11-14T19:03:29","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/blockchain-a-solution-to-the-problem-of-counterfeit-drugs\/"},"modified":"2017-11-14T14:03:29","modified_gmt":"2017-11-14T19:03:29","slug":"can-blockchain-help-solve-the-problem-of-counterfeit-drugs","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/can-blockchain-help-solve-the-problem-of-counterfeit-drugs\/","title":{"rendered":"Can blockchain help solve the problem of counterfeit drugs?"},"content":{"rendered":"<p><strong>The problem of counterfeit drugs <\/strong><\/p>\n<p>Counterfeit drugs, with sales ranging from US$163 to $217 billion, are the most lucrative sector of the global trade in illegally copied goods<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a>, and adversely impact both consumers and pharmaceutical companies.<\/p>\n<p>As for consumers, thousands of people every year die or suffer health problems after taking counterfeit drugs.<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a><\/p>\n<p>From the companies\u2019 perspective, counterfeit drugs impact their reputation, as well as damage their bottom lines. Drug manufacturers lose about US$ 205 billion annually in sales<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a>, and also spend large sums of money on marginally effective anti-counterfeiting measures.<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>\u00a0<iframe loading=\"lazy\" title=\"Protecting Yourself from Counterfeit Drugs | Bayer\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/BjCPa-DI6oU?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>To tackle this issue, the U.S. Congress enacted the Drug Supply Chain Security Act (DSCSA) in 2013, which requires the pharmaceutical industry to adopt, by 2023, an &#8220;interoperable system&#8221;\u00a0which will allow the FDA to identify and trace prescription drugs as they are distributed in the U.S..<a href=\"#_ftn5\" name=\"_ftnref5\">[5]<\/a><\/p>\n<p>The task is far from simple: the industry will have to work together to create common standards and improve downstream communication. Manufacturers, packagers, wholesale distributors and even third-party logistics providers will play a role in creating this new system.<a href=\"#_ftn6\" name=\"_ftnref6\">[6]<\/a><\/p>\n<p><em>Can blockchain help solve the problem of counterfeit drugs?<\/em><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Blockchain and supply chain<\/strong><\/p>\n<p>In a nutshell, blockchain is a ledger, a software that and creates a tamper-proof, indelible record of transactions. This record of transactions is decentralized: every participant (node) maintains a copy of the shared ledger, and needs to approve any change. Additionally, the system is fully transparent: the list of transactions is visible to everyone.<\/p>\n<p>In the context of a supply chain, blockchain can be used to track the flow of goods and services between businesses and across borders.<a href=\"#_ftn7\" name=\"_ftnref7\">[7]<\/a> This means that, at each step of the distribution process, a network of computers can vouch for the provenance and authenticity of a shipment\u2014making it harder for thieves to unload stolen medications, or for counterfeiters to introduce fake wares.<a href=\"#_ftn8\" name=\"_ftnref8\">[8]<\/a><\/p>\n<p>An important advantage of using blockchain is its reliability: it is virtually impossible for malicious actors to alter the event logs. Another advantage is speed: should a shipment be disrupted or go missing, the data stored on the common ledger provides a rapid way for all parties to trace it, and determine who handled the shipment last.<a href=\"#_ftn9\" name=\"_ftnref9\">[9]<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><iframe loading=\"lazy\" title=\"Blockchain for Supply Chain Transparency &amp; Traceability - Simardeep\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/FtK65VH5OBg?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Pfizer\u2019s involvement in the MediLedger project<\/strong><\/p>\n<p>Pfizer has teamed up with Genentech (member of the Roche group) and other pharmaceutical companies to introduce the MediLedger project, a blockchain platform to prevent counterfeit drugs from entering pharma supply chains.<a href=\"#_ftn10\" name=\"_ftnref10\">[10]<\/a><\/p>\n<p>If the project meets its goals, everyone from drug makers to wholesalers to hospitals will be recording drug deliveries on a blockchain: its aspirations go beyond DSCSA compliance, and the participants hope to use their system to help fundamentally move the industry forward in improving drug security and preventing the production and trafficking of counterfeit drugs globally.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-22224 size-large\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Slide1-1-1024x576.jpg\" alt=\"\" width=\"640\" height=\"360\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Slide1-1-1024x576.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Slide1-1-300x169.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Slide1-1-768x432.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Slide1-1-600x338.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Slide1-1.jpg 1280w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><a href=\"#_ftn11\" name=\"_ftnref11\">[11]<\/a><\/p>\n<p>While is it promising that major pharmaceutical players are involved in the project, introducing a blockchain system \u2013 in which each participant controls a node in the network \u2013 will be challenging in the pharma industry, where large conservative companies dominate.<a href=\"#_ftn12\" name=\"_ftnref12\">[12]<\/a><\/p>\n<p><strong>The road forward<\/strong><\/p>\n<p>If the project succeeds, it will undoubtedly disrupt the pharmaceutical industry. However, some additional issues about blockchain will also need to be considered:<\/p>\n<ul>\n<li>How can blockchain address potential errors, fraudulent transactions or bugs in the code without creating data vulnerability?<a href=\"#_ftn13\" name=\"_ftnref13\">[13]<\/a><\/li>\n<li>Despite blockchain\u2019s current decentralization, private ledgers will inevitably arise, as companies seek to protect market share and profits. How can interoperability across private and public blockchains be assured?<a href=\"#_ftn14\" name=\"_ftnref14\">[14]<\/a><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Word count: 799<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><strong>\u00a0<\/strong><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> Peter Behner et al., \u201cFighting counterfeit pharmaceuticals: New defenses for an underestimated &#8211; and growing \u2013 menace\u201d, Strategy&amp;, June 29, 2017, <a href=\"https:\/\/www.strategyand.pwc.com\/reports\/counterfeit-pharmaceuticals\">https:\/\/www.strategyand.pwc.com\/reports\/counterfeit-pharmaceuticals<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> Interpol, \u201cPharmaceutical Crime \u2013 The Dangers\u201d, <a href=\"https:\/\/www.interpol.int\/Crime-areas\/Pharmaceutical-crime\/The-dangers\">https:\/\/www.interpol.int\/Crime-areas\/Pharmaceutical-crime\/The-dangers<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> Peter Behner et al., \u201cFighting counterfeit pharmaceuticals\u201d.<\/p>\n<p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a>\u00a0See, for instance, Jeff Swiatek, \u201cLilly spends millions fighting fake pharmaceuticals\u201d, <em>USA Today, April 6, 2013, <\/em><a href=\"https:\/\/www.usatoday.com\/story\/news\/nation\/2014\/04\/06\/drugmaker-spends-millions-fighting-fake-pharmaceuticals\/7357799\/\">https:\/\/www.usatoday.com\/story\/news\/nation\/2014\/04\/06\/drugmaker-spends-millions-fighting-fake-pharmaceuticals\/7357799\/<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref5\" name=\"_ftn5\">[5]<\/a> U.S. F.D.A., \u201cDrug Supply Chain Security Act\u201d, <a href=\"https:\/\/www.fda.gov\/Drugs\/DrugSafety\/DrugIntegrityandSupplyChainSecurity\/DrugSupplyChainSecurityAct\/\">https:\/\/www.fda.gov\/Drugs\/DrugSafety\/DrugIntegrityandSupplyChainSecurity\/DrugSupplyChainSecurityAct\/<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref6\" name=\"_ftn6\">[6]<\/a> Edwin Lopez, \u201cBig Pharma builds blockchain prototype to stop counterfeits\u201d, <em>Supply Chain Dive<\/em>, September 21, 2017, <a href=\"https:\/\/www.supplychaindive.com\/news\/big-pharma-blockchain-MediLedger-DSCSA-FDA\/505563\/\">https:\/\/www.supplychaindive.com\/news\/big-pharma-blockchain-MediLedger-DSCSA-FDA\/505563\/<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref7\" name=\"_ftn7\">[7]<\/a> Michael J. Casey and Pindar Wong, \u201cGlobal supply chains are about to get better, thanks to blockchain\u201d, <em>性视界 Business Review<\/em>, March 13, 2017, <a href=\"https:\/\/hbr.org\/2017\/03\/global-supply-chains-are-about-to-get-better-thanks-to-blockchain\">https:\/\/hbr.org\/2017\/03\/global-supply-chains-are-about-to-get-better-thanks-to-blockchain<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref8\" name=\"_ftn8\">[8]<\/a> Jeff John Roberts, \u201cBig Pharma Turns to Blockchain to Track Meds\u201d, <em>Fortune<\/em>, September 21, 2017, <a href=\"http:\/\/fortune.com\/2017\/09\/21\/pharma-blockchain\/?iid=sr-link2\">http:\/\/fortune.com\/2017\/09\/21\/pharma-blockchain\/?iid=sr-link2<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref9\" name=\"_ftn9\">[9]<\/a> Ibid.<\/p>\n<p><a href=\"#_ftnref10\" name=\"_ftn10\">[10]<\/a> Joseph Young, \u201cPharma Giants Use Ethereum Network to Prevent Counterfeit Medicine\u201d, BTCMANAGER, September 25, 2017, <a href=\"https:\/\/btcmanager.com\/pharma-giants-use-ethereum-network-prevent-counterfeit-medicine\/\">https:\/\/btcmanager.com\/pharma-giants-use-ethereum-network-prevent-counterfeit-medicine\/<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref11\" name=\"_ftn11\">[11]<\/a> Images from <a href=\"http:\/\/www.flaticon.com\">https:\/\/www.flaticon.com\/<\/a>, by authors Roundicons, Vectors Market, Icon Pond and Vectorgraphit.<\/p>\n<p><a href=\"#_ftnref12\" name=\"_ftn12\">[12]<\/a> Jeff John Roberts, \u201cBig Pharma Turns to Blockchain to Track Meds\u201d, <em>Fortune.<\/em><\/p>\n<p><a href=\"#_ftnref13\" name=\"_ftn13\">[13]<\/a> Richard Lumb et al., \u201cEditing the uneditable &#8211; Why distributed ledger technology must adapt to an imperfect world\u201d, Accenture, 2016, <a href=\"https:\/\/www.accenture.com\/t20160927T033514Z__w__\/us-en\/_acnmedia\/PDF-33\/Accenture-Editing-Uneditable-Blockchain.pdf#zoom=50\">https:\/\/www.accenture.com\/t20160927T033514Z__w__\/us-en\/_acnmedia\/PDF-33\/Accenture-Editing-Uneditable-Blockchain.pdf#zoom=50<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref14\" name=\"_ftn14\">[14]<\/a> Michael J. Casey and Pindar Wong, \u201cGlobal supply chains are about to get better, thanks to blockchain\u201d, <em>性视界 Business Review.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Counterfeit drugs adversely impact both consumers and pharmaceutical companies. Can blockchain help solve this problem?<\/p>\n","protected":false},"author":9676,"featured_media":22117,"comment_status":"open","ping_status":"closed","template":"","categories":[2608,3439,3441,3438,3440,2413,3436,3437,769],"class_list":["post-22116","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-blockchain","category-counterfeit-drugs","category-drug-supply-chain-security-act","category-drug-traceability","category-dscsa","category-fda","category-genentech","category-mediledger","category-pfizer","hck-taxonomy-organization-pfizer","hck-taxonomy-industry-pharmaceutical","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Can blockchain help solve the problem of counterfeit drugs? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/can-blockchain-help-solve-the-problem-of-counterfeit-drugs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can blockchain help solve the problem of counterfeit drugs? - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Counterfeit drugs adversely impact both consumers and pharmaceutical companies. 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