Drug Supply Chain Issues
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 or drug traceability.
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) encompasses various 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 Technology 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 proved 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, thus revolutionizing industries with trust, efficiency, and accountability.
Blockchain-based 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. There are other additional tools available, like sensors, the IoT (Internet of Things), AI, and machine learning, that could be used along with blockchain for better streamlining of products.
Non-Fungible Token introduction
NFT stands for Non-Fungible Token. It’s a unique digital asset kept on a blockchain database, like Ethereum. Unlike cryptocurrencies, NFTs can’t be exchanged on a one-to-one basis because each one is distinct and one-of-a-kind in nature. NFTs serve as a means to demonstrate ownership or verify the authenticity of digital assets like artwork, collectibles, or music. They use blockchain technology to ensure transparency and security, ownership records, and transaction history. NFTs have gained popularity for enabling new forms of digital ownership, art, and collectibles. However, they have also raised concerns about environmental impact and market volatility.
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The Need for a Secure and Transparent Drug Traceability System
In order to ensure patient safety and optimize supply chain management, an efficient drug traceability system within the IoT is essential for healthcare.
A computational platform is connected to a set of sensors in an IoT system. The sensors are used to measure the temperature, humidity, and GPS location of a vehicle transporting a lot. When shipment begins, parameters such as temperature and humidity thresholds for each drug in that lot are retrieved by this platform. By comparing them to actual values acquired from sensors, it can be determined whether one or more drugs have exceeded their respective thresholds. In such cases, the status of these drugs is marked as “invalid” on a blockchain platform, and GPS coordinates along with exceeded values are sent over to the blockchain.
Furthermore, it allows for rapid recall management by quickly identifying affected products. This system promotes regulatory compliance through automated data capture and simplifies audits. It improves transparency and trust between stakeholders as it offers an audit trail, detects suspicious activities, and increases accountability. The data collected using IoT can be analyzed to drive insights and advancements in supply chain efficiency, demand forecasting, and drug development. The integration of a secure and transparent drug traceability system in the IoT creates a safer and more efficient healthcare ecosystem and nurtures public health and patient wellness.
Blockchain NFT’s traceability advantages and limitations
Integrating NFTs (Non-Fungible Tokens) in the pharmaceutical industry for drug traceability can bring several benefits, including increased transparency, accountability, efficient supply chain management, and real-time tracking capabilities. Here are the key advantages:
1. Transparency: NFTs enhance transparency by providing a verifiable and immutable record of each drug’s journey. Every transaction, from production to distribution, is recorded on the blockchain using NFT. This transparency enables stakeholders to track and verify the authenticity and integrity of pharmaceutical products, minimizing the risk associated with counterfeit drugs getting into the market.
2. Accountability: NFTs ensure a higher level of accountability throughout the supply chain. Each drug unit is assigned a unique NFT, allowing stakeholders to trace its ownership and movement accurately. This accountability discourages fraudulent activities and ensures that responsible parties can be identified in case of any quality or safety concerns.
3. Efficient Supply Chain Management: Integrating NFTs with drug traceability systems provides real-time tracking capabilities, enhancing pharma supply chain management. By utilizing IoT sensors and smart tags, the location, temperature, and condition of drugs can be recorded and monitored in real-time. This data helps optimize inventory management, reduce wastage, and identify potential bottlenecks or issues in the pharma supply chain.
4. Improved Recall Management: NFTs facilitate efficient recall management in the event of safety or quality issues with specific drug batches. With real-time tracking, it becomes easier to identify and trace affected products quickly, minimizing the impact on patient safety. The transparent and accurate record of drug distribution provided by NFTs enables prompt notification and recall of affected drugs, mitigating potential risks.
5. Regulatory Compliance: Integrating NFTs simplifies regulatory compliance efforts in the pharmaceutical industry. The transparent nature of NFTs and their ability to record and verify data streamline regulatory audits and reporting. The real-time tracking capabilities of NFTs ensure compliance with regulations and demonstrate adherence to quality and safety standards.
By incorporating NFTs into drug traceability systems, the pharmaceutical industry can achieve increased transparency, accountability, efficient supply chain management, and real-time tracking capabilities. These benefits contribute to improving patient safety, streamlined operations, and regulatory compliance, ultimately creating a more secure and reliable pharmaceutical supply chain.
The implementation of an NFT-based drug traceability system has the potential to transform the healthcare industry by improving patient safety and security and providing reliable and quality pharmaceutical products. It also improves the transparency and traceability of the overall drug supply chain.
However, there are several challenges and limitations that need to be considered before this can be achieved.
Let’s have a look at them:-
1. Lack of Standards: The technology behind NFTs is still in its infancy, which means that there are no established standards when it comes to implementation. This can pose a challenge for organizations that want to implement drug traceability systems because they must create their own protocols for tracking and storing data.
2. Cost: The cost of implementing an NFT-based drug traceability system can be prohibitive for some organizations. These systems require hardware and software investments, and the cost of developing and maintaining them can add up quickly.
3. Scalability: NFTs are not yet well suited for large-scale implementations, as they are still relatively slow and expensive.
Blockchain technology has the capability to transform the drug or pharma industry’s supply chain management with the help of other technologies such as NFT, IoT, and smart cards. Blockchain traceability ensures transparency, quality, and safety verification at every stage of the drug supply chain until it reaches its final stage. As it is helpful in verifying the quality and production claims of pharmaceutical products. It improves the drug traceability supply chain and helps the stakeholders to deliver reliable and quality pharma products.
It improves the typical supply chain by implementing transparency, accountability, efficient supply chain management, and real-time tracking capabilities. Blockchain powered drug traceability could help people all around the world consume safe and effective medicines for better health. It also increases trust among all industry stakeholders, such as distributors, suppliers, sellers, and producers, as well as among customers. Blockchain based drug traceability can improve the entire healthcare system, as drugs are a vital product in the healthcare industry.
Planning on addressing the concerns in pharma / drug supply chain 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 development journey.