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How Zuellig Pharma is fighting fake drugs with blockchain

The Asia-Pacific pharmaceutical giant is using a blockchain platform from SAP to help consumers identify the provenance of medicine

With one in 10 medical products used in developing countries deemed to be fake, there is a pressing need to eradicate counterfeit drugs that could pose a danger to patients.

According to the World Health Organisation, fake drugs, while seemingly identical to the real thing, often “fail to properly treat the disease or condition for which they were intended, and can lead to serious health consequences, including death”.

Cracking down on fake drugs, however, can be time-consuming. At Zuellig Pharma, a regional pharmaceutical giant in the Asia-Pacific region, it could weeks to do so, as it needs to gather data from different parties across its supply chain.

That is where blockchain technology comes in. Zuellig Pharma has recently developed the eZTracker smartphone app, powered by SAP’s blockchain platform, that lets consumers verify the authenticity of a drug and if it has been legitimately distributed by scanning a barcode.

“If a product is fake, alerts will be automatically triggered to the manufacturer and to Zuellig Pharma, together with an instant identification of where the fake product entered the supply chain,” the company said in December 2018.

Elaborating on eZTracker during an SAP regional event in Bangkok in August 2019, Zuellig Pharma’s head of SAP and IT solutions, Daniel Laverick, said the SAP blockchain platform captures data from the drug manufacturer about a drug that it has received at its warehouse onto a blockchain.

In cases where a drug is deemed fake, consumers will be warned about it and advised on the actions they can take

Laverick said the drug is then moved internally within Zuellig Pharma, before being shipped to consumers, hospitals and drug stores. At that point, information such as drug types and batch numbers are saved on the blockchain.

When the drug reaches the hands of consumers, information about when and where a consumer uses eZTracker to scan the drug’s barcode is also written to the blockchain.

In cases where the drug is deemed fake, consumers will be warned about it and advised on the actions they can take, such as informing the authorities or to seek treatment if they have already consumed the drug.

If a drug is a parallel import that is not meant to be distributed in the country where the consumer is, Laverick cautioned that although the drug is genuine and has passed through Zuellig Pharma’s supply chain, it may not have been shipped in conditions that guarantee its efficacy.

Collaborative blockchain

eZTracker, however, is only the first step in Zuellig Pharma’s blockchain journey. Laverick said the same technology could also be applied to its supply chain to capture sensor data about environmental conditions in which drugs are transported, as well as to facilitate payments and transactions.

Acknowledging the need to build a blockchain ecosystem around a single blockchain platform, Laverick said consumers would not want to use different apps to check the provenance of drugs sold by different drug companies.

“We have to come to a point where we can get to an open platform that we can collaborate on and put all the data in so that consumers would only need to use one app,” he said.

Laverick said Zuellig Pharma was also looking at providing data that it has captured on its blockchain platform to the authorities, which would then be able to crack down on fake drugs.

Read more about blockchain in APAC

According to IDC, blockchain spending in Asia-Pacific excluding Japan will reach nearly $523.8m in 2019, an increase of 83.9% from the $284.8m spent in 2018.

After much experimentation, this technology is beginning to emerge in a range of production environments, driven by the thought leadership of early adopters and an ever-growing industry of blockchain businesses helping their customers realise the value of this technology,” said Simon Piff, vice-president for security and blockchain research at IDC Asia-Pacific.

“As we see the emergence of the concept of digital trust, blockchain is a key ingredient in delivering this trust, at scale, across many markets, allowing a new pace of business interaction that had previously been restricted by process and approval challenges,” he said.

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