Blockchain Won’t Solve Pharma Quality Concerns

We constantly hear news about counterfeit and inferior quality drugs, along with concerns about increasingly mandated generic medications. Simply by setting a Google Alert for “counterfeit medication,” I was made privy to over 150 news events in the past year. Beyond the hype, some of the facts are certainly concerning… 80% of the ingredients in our medications are manufactured in India or China; over 1,000 overseas, export facilities have never been inspected. There certainly appears to be some potential holes in the system and a good reason why so many companies have tried their hand at securing this roughly $2 TRILLION global supply chain, which billions of people rely on for their health. Naturally, the latest craze in the world of improving the pharmaceutical supply is “blockchain!”

Before getting into blockchaining pharma, we should appreciate that there have been quite a number of impressively innovative ideas, technologies and companies that have worked very hard to better secure the global pharmaceutical trade: TruTag Technologies unveiled silica-based micro-barcodes mixed into tablet coatings in 2011; DNA Technologies announced plant-derived DNA to immutably tag pills in 2013; and, Quantum Materials Corp touted quantum dots and 3D printing in 2014; just to name a few. However, all these technological solutions that could truly eradicate counterfeiting have largely failed to penetrate even a tiny piece of the market.

With such a clear global problem and such clear technological solutions, why is the issue only becoming bigger and more pronounced? One straightforward answer is “complexity.” Getting all parties of this incredibly convoluted, global supply chain to adopt any one particular technology for multiple drugs is daunting to say the least.

The other straightforward answer to explain previous failures is “regulation.” Not that regulation is preventing the adoption of new technologies per se, but that it is only through regulation that the pharma industry actually responds in any substantive way. The EU is years ahead of the US in legislating and implementing “track-and-trace” software systems for doing what you probably assumed is already done: electronically ensuring pharmaceutical packages are coming from where they are supposed to come from (you know, what UPS and FedEx already do for any product you buy online). Given that regulation is pushing for this, startup track-and-trace software companies like TraceLink have seen rapid growth and venture funding in excess of $50M from investors like Goldman Sachs.

Although technological tags physically embedded into the meds themselves sound much cooler and safer than just “software,” in reality a solid electronic tracking system should work just as well. After all, we are talking about physical objects – medications – that can be just as straightforwardly tagged with a unique barcode in tamper-proof packaging as a quantum dot. However, even in controlled, contained environments, there’s a litany of technical and operator errors that can defeat even an “immutable” system. A 2017 study of a large UK hospital system using serialization software found that, of the 4000 meds independently inserted and tracked, only 32% of the counterfeit meds were actually detected despite the technology being technically 100% effective.

So to bring it all back to blockchain – the “immutable” authenticity of the blockchain is not unique when compared to the wide variety of physical tags that have largely failed or the software tags that are growing in popularity thanks to looming regulation deadlines. Furthermore, there’s nothing about blockchain that makes it immune from the challenge that all anti-counterfeiting concepts face: tremendous complexity.

However, the most important point for why blockchain will not be the savior for securing pharmaceutical quality, and what ALL these efforts are missing, is the simple fact that authenticity does not equal quality.

Even if an ethereal blockchain genie implemented all these technologies perfectly, the end result would be you would get a bottle of meds, scan it, and you would know that your meds were authentically made in a Chinese factory that may have never even been inspected.

Let’s go back to the primary concerns in the beginning: lack of sufficient FDA funding to enable complete and regular oversight, and the consistent problems of quality seen in Chinese and Indian factories.

The major problem in developed countries like the US was never a mystical technology that creates an “immutable” chain of authenticity; the problem is really ensuring consistent, chemical quality. Take for example the roughly four million epileptic patients in the US taking anti-seizure medications. Many studies have revealed the damaging effects between brand vs. generic on these patients. However, with epileptics, it is very clear when your meds are off – you suffer a seizure – so studies that are even more granular could be performed. A Harvard Medical School study with 1,762 patients was able to show that just the batch-to-batch variability of simply refilling your meds was associated with a 2.3-fold increased chance of having a seizure.

This is a much more difficult technological problem that will need to be married with whichever tracking technologies win out. We do not yet live in the age of the tricorder where a simple, hand-held device can tell you detailed, chemical quality information of final products (although SCiO certainly tried). However, more efforts into quality control instead of just “authenticity” will be of significantly greater benefit to us than what quantum dots, DNA or even blockchain could do alone.


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