Of all counterfeit items that affect consumers adversely, counterfeit drugs have the most damaging impact. The production and sale of unregulated and falsified drugs has been a major issue in the pharmaceutical Industry. The directives of the goverments over the world to serialize and aggregate the production and transfer of drugs had helped tremendously to improve drug quality and security the world over. However, over the years many other forms of traceability systems have evolved in different industries and one particular immutable system the the blockchain which can assist in tracing the drug from the point of manufacture to the final consumer, who is the patient.

Introduction to Blockchain in the Pharmaceutical Industry

Over the years, the health industry has begun the deployment of blockchain technology in the pharmaceutical world through various Pilots, many of which have gathered a lot of interest and support.

Blockchain is a competent system of recording data in a classified manner, making it impossible for unknown parties to hack, change, or corrupt the system. This form of technology acts as a decentralized network that provides and shares information with the relevant parties concerning the product in question. This facilitates efficacious tracking and tracing of drugs through the supply chain. Pharmaceutical products can be verified from any registered point throughout the supply chain right from the origin to the end user. (Angraal et al 2017)

Blockchain is an Ideal Technology for Pharmaceutical Track and Trace

The use of blockchain has been considered to be a promising and impeccable technology for creating a healthcare ecosystem. This is seen in how drug manufacturers are able to manage their medical data and efficiently share it with respective participants. There is ample data security and quality that is easily accessible and addressed through blockchain technology.

The serial number added in blockchain gives the product its authentic and unique identity. Furthermore, blockchain enables irrevocable transaction recording. The transactions cannot be revoked because blockchain contains two inherent aspects which include decentralization and checksums. In decentralization, before any block is written, all parties have to be notified first and agree on the accuracy of the block. The checksum ensures that the information compiled is accurate and authentic. This is achieved by running each block through a cryptographic hash function. Such features make certain that the transactions are irrevocable.

This platform makes it quite easy to carry out financial transactions concerning pharmaceutical drugs. Unlike the activities carried out with counterfeit drugs where the proof of transactions,  cannot be traced back to the source. Unnecessary third parties are eliminated and the supply chain is not at risk of any alterations.

Secure data

Blockchain technology facilitates access to medical records for patients, which can only be done by authorized parties. The data is well protected, and the rights of patients are secured. It also facilitates the pricing of drugs which deals with the competition from counterfeit drugs. Such details protect the patients from being deceived by those supplying counterfeit medicine to the market. Permissioned blockchain and smart contracts ensure only authorized people in the chain have acess to confidential data.

Vendor credentialing

Subsequently, the technology offers vendor credentialing services, which are very effective in the fight against counterfeit drugs. This is where third-party suppliers of drugs are vetted and investigated before making any purchases. This ensures the drugs provided are authentic and acceptable by the health ministries.

Buyer assurance

The technology has opened up the possibility for customers to verify the authenticity and genuineness of a drug before purchase. This is done by scanning a QR code on the package through an app. For better protection, the technology can be combined with RFID or GPS. With such improvements, companies can easily detect where fake drugs are entering the market from and the buyer is at ease that the product is genuine when they have access to the product’s entire history right from its manufacture.

Tracing and tracking

The tracing and tracking throughout the supply chain have highly been improved due to the deployment of blockchain technology. The origin and source of the drug can quickly be established. In addition, the final destination is provided together with all the stops the product is likely going to make. This makes certain that the delivery process and conditions are safe and of the desired quality. The complexity of the supply chain is in turn controlled by a reliable piece of software facilitated by decentralized blockchain technology. (Agbo et al 2019)


Furthermore, there is transparency between all parties because they all have access to the information concerning the products. In case of changes during the supply process, the parties can easily make updates on the system which are then propagated across the chain. This is highly fostered by the blockchain’s public ledger that plays a key role in the fight against fake drugs.



The health risks imposed on patients have to be put to an imminent end by implementing the new legal requirements that demand traceability and tracking of pharmaceutical products. Companies highly trust blockchain technology and with El Salvador accepting BitCoin as legal tender, there is sufficient room to assume that blockchain is here to stay. It has the feature of being anonymous, decentralized, tamper-proof, and transparent. There have been reviews showing the efficacy of utilizing the decentralized blockchain regarding the serialization of drugs. The World Health Organization has already taken the initiative and announced its cooperation with companies using blockchain technology. (Mettler, Matthias et 2016) There is no doubt that blockchain pharmacy is the beginning of a new competent era in the pharmaceutical world.

Mettler, Matthias. “Blockchain technology in healthcare: The revolution starts here.” 2016 IEEE 18th international conference on e-health networking, applications and services (Healthcom). IEEE, 2016.
Angraal, Suveen, Harlan M. Krumholz, and Wade L. Schulz. “Blockchain technology: applications in health care.” Circulation: Cardiovascular Quality and Outcomes 10.9 (2017): e003800.
Agbo, Cornelius C., Qusay H. Mahmoud, and J. Mikael Eklund. “Blockchain technology in healthcare: a systematic review.” Healthcare. Vol. 7. No. 2. Multidisciplinary Digital Publishing Institute, 2019.


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