Home » Blockchain » Roles of Blockchain in Pharmacy for Combating Counterfeit Drug


Reliable drug supply chains are essential for public health. In recent years, counterfeit drugs have become a major issue, leading to thousands of individuals being poisoned or suffering from treatment failures. This has caused an increased demand for traceability in drug supply chains. Counterfeit drugs can be discovered in various places, such as local markets, unregulated websites, pharmacies, clinics, and hospitals. These fake drugs are often disguised in counterfeit packaging that closely resembles genuine products. While they are distributed globally, the main sources of counterfeit drugs today are India and China.

According to the International Federation of Pharmaceutical Manufacturers Association and the World Health Organization (WHO), counterfeit drugs constitute approximately 10 percent of the global drug market, which was valued at $1 trillion in 2016. However, the heaviest impact is felt in low- and middle-income countries, where healthcare systems and governance are relatively weak. Reliable drug supply chains are essential for public health. In recent years, counterfeit drugs have become a major issue, leading to thousands of individuals being poisoned or suffering from treatment failures. This has caused an increased demand for traceability in drug supply chains

Unfortunately, many parties involved often have trust issues and are unwilling to share data with each other. Additionally, existing traceability systems lack transparency and trustworthiness. New Regulations are imposed by the US government, known as the US Drug Supply Chain Security Act (DSCSA). The function of this act is to regulate all supply chain stakeholders to only use reliable measures that will help improve product traceability. The actual application of DSCSA will be done periodically by the year 2023. To combat this problem, blockchain-based solutions are being proposed as a way to create decentralized trustless systems that can address these issues.

The pharmaceutical supply chain (PSC) consists of many participants, such as suppliers of raw materials, manufacturers, distributors, regulatory bodies, pharmacies, hospitals, and patients. A practical traceability system is required to determine current and past product ownership due to the complexity of the product and transaction flows in PSC. Digitizing track-and-trace processes ensures product safety and provides regulatory oversight.

Blockchain introduction

Blockchain is a decentralized, tamper-resistant digital ledger or distributed database that facilitates the secure and transparent recording, verification, and storage of information. It works through a network of computers, or nodes, where every node has a copy of the entire chain of blocks. Each block contains a list of transactions or data, which, once added, makes it almost impossible to change or manipulate the stored information. Blockchain’s immutability is enabled through cryptographic hashes and consensus algorithms. This technology has proven its eminence and is being implemented across multiple domains, not just solely in cryptocurrencies. Some examples are supply chain management, smart contracts, identity verification, and decentralized applications, which are revolutionizing industries with trust, efficiency, and accountability.

Blockchain in pharmacy/drug traceability is empowered by NFTs, providing a decentralized solution that can seamlessly integrate IoT devices throughout the supply chain. Smart contracts and decentralized off-chain storage remove middlemen from the supply chain, ensuring secure transactions with an immutable history. 

Today, the integration of blockchain technology is also showing substantial impacts in solving a major issue in pharmaceutical supply chain traceability. Blockchain could be used to verify the quality and production claims of pharmaceutical products. 

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How Blockchain Technology Can Revolutionize the Pharmaceutical Industry

Blockchain technology has the potential to revolutionize the pharmaceutical industry in several ways: 

  1. Ensuring the Authenticity and Safety of Medicines: Blockchain in pharmacy system can facilitate authorized people to perform drug authentication and product verification, thus making it difficult for counterfeit medicines to enter the market. Using the features of tamper-proof packaging and unique identifiers recorded on the blockchain, the medications’ authenticity can be verified, ensuring patient safety.
  1. Improving Supply Chain Management and Transparency: Blockchain in pharmacy system can transform the pharmaceutical supply chain by providing track-and-trace solutions. Each transaction and movement of medications can be stored on the blockchain, enabling real-time monitoring and improving inventory management. This improves transparency, reduces the risk of counterfeiting, and prevents substandard drugs from entering the supply chain.
  1. Improving Patient Safety and Health Outcomes: Blockchain in pharmacy system can facilitate pill identification systems, to ensure that patients receive the correct medication. It can also track medication adherence, which helps patients to follow their prescribed treatment plans. Lastly, to enable faster identification and response to any medication-related issues, medication adverse event reporting can be improved.
  1. Streamlining Regulatory Compliance and Auditing Processes: Blockchain technology pharmacy system, by providing a digital records management system, can simplify regulatory compliance and auditing processes. This eases secure and transparent access to relevant data during compliance audits, streamlining the process and decreasing administrative burdens.
  1. Ensuring Traceability in the Pharmaceutical Supply Chain: Every stage of the drug supply chain, starting from the acquisition of raw materials to the production, distribution, and utilization by patients, can be stored on the blockchain in pharmacy system. Blockchain traceability creates a clear and immutable record of every transaction, making it simple for stakeholders to track the source and movement of drugs. 

By using Blockchain technology’s decentralized ledger, secure data storage, transparency, and traceability, the pharmacy industry can undergo a transformative revolution. This can result in improved medication authenticity, streamlined supply chain management, enhanced patient safety, better health outcomes, simplified regulatory compliance, and comprehensive traceability. The adoption of blockchain has the potential to strengthen the industry’s integrity, build trust among stakeholders, and ultimately deliver safer and more effective medications to patients worldwide.

Challenges and Limitations of Implementing Blockchain in the Pharmacy Supply Chain

The pharmacy sector has the potential to experience a revolutionary change by utilizing the decentralized ledger, secure storage of data, transparency, and traceability provided by blockchain technology. This could lead to various benefits such as improved verification of medications, efficient management of supply chains, enhanced safety for patients, better health results, simplified adherence to regulations, and complete traceability. The adoption of blockchain in pharmacy has the power to fortify the industry’s credibility, establish trust among all stakeholders, and ultimately ensure the delivery of safer and more efficient medications to patients around the globe.

Implementing blockchain in pharmacy industry faces a few challenges and potential limitations, which include:

  1. Scalability: Blockchain in pharmacy systems may have trouble handling a huge number of transactions efficiently, which can result in limiting its use in busy pharmacy systems.
  1. Integration with existing systems: Integrating blockchain in pharmacy system with a typical infrastructure can be a complex process that requires specialized knowledge.
  1. Cost: Developing and maintaining a blockchain in pharmacy system network can be expensive, which makes it difficult for smaller pharmacy businesses to adopt this technology.
  1. Regulatory and legal considerations: Adhering to privacy laws and data protection regulations after implementing a blockchain in pharmacy system requires careful attention.
  1. Technical expertise: Implementing blockchain in pharmacy requires skilled professionals, who may be in short supply. Organizations may need to train and upskill their workforce or collaborate with external experts.
  1. Interoperability: Different blockchain networks may not be compatible, which may hinder smooth data exchange between systems.
  1. Trust and adoption: Gaining trust, keeping everyone on the same page, and overcoming resistance to change from all stakeholders can be challenges while implementing blockchain.

In spite of these challenges, progress, awareness, and industry collaboration are working to find solutions. As technology improves, more people will embrace blockchain in pharmacy system.

Future Scope of Blockchain Technology in Combating Counterfeit Drugs in Pharmacy

In the future, blockchain technology is expected to play a major role in eliminating counterfeit drugs from the pharmacy industry through trends such as the adoption of blockchain-based track and traceability solutions, the integration of the Internet of Things (IoT) for real-time monitoring, partnerships and association for collaborative efforts, the implementation of enhanced authentication using Non-Fungible Tokens (NFTs), and regulatory support and compliance. These trends indicate increased adoption of blockchain and its potential to enhance supply chain transparency, provide effective methods to verify drug originality, and enable collaboration among stakeholders in the common fight against counterfeit drugs.


Blockchain technology has the potential to revolutionize how the pharmacy industry manages its supply chain traceability. It can work together with technologies like NFTs, IoT, and smart cards to ensure transparency, quality, and safety verification at every step of the drug supply chain. This helps in verifying the quality of pharmaceutical products and improves the traceability of drugs.

By implementing blockchain in pharmacy system, the supply chain becomes more transparent, accountable, and efficient, with real-time tracking capabilities. This can ensure that people all over the world have access to safe and genuine medicines, improve their health, and eliminate counterfeit drugs from the market. Blockchain also builds trust among stakeholders like distributors, suppliers, sellers, producers, and customers. Overall, blockchain has the potential to enhance the entire healthcare system by improving the reliability and safety of drugs, which are crucial for people’s well-being.

Planning on addressing the concerns in drugs/pharmacy traceability or wish to upgrade your existing traceability solution to Web 3.0? Our expert team of professionals will assist you in every step of your project development journey.

Last modified on October 19th, 2023 at 4:38 pm