$600bn
The size of the entire cryptocurrency market by the end of 2017, according to CoinMarketCap
Peer-to-Peer Networks: These distribute the tasks, workload and storage across multiple different computers (or nodes) instead of one singular computer. This system is more secure because it does not have one single point of failure. By themselves these technologies are useful, but together they are transformational. Blockchain technology can be used to solve real world problems, such as counterfeit pharmaceuticals which currently create enormous problems globally, with both humanitarian and financial consequences. Blockchain technology offers a simple solution.
THE PROBLEM
Currently, as a pharmaceutical medicine travels from the manufacturer to the customer it can pass through as many as five different transport companies, and hundreds of individuals. It is difficult to track an item as it passes through this complex supply chain presenting a significant risk that counterfeiters can find opportunity to replace genuine pharmaceuticals with fake pharmaceuticals. The genuine pharmaceuticals are sold on the black market while the counterfeit pharmaceuticals travel to the legitimate healthcare providers, who remain unaware that the products they are selling are fake and potentially ineffective or lethal. The counterfeit products are thus unknowingly sold to the unsuspecting public. While it is difficult to estimate precisely, Pfizer estimate that between 100,000 and 1 million people die annually due to counterfeit drugs2. Furthermore, a professional services firm
Unique identity assigned to every unit - combined with an anti-counterfeiting hardware product
Peer-to-Peer Network vs. a centralised network. In the latter, if the server is attacked, all the computer are compromised
BLOCKCHAIN TECHNOLOGY CAN BRING T R A N S P A R E N C Y, A C C O U N TA B I L I T Y AND TRUST TO THE PHARMACEUTICAL S U P P LY C H A I N estimated that approximately 450,000 of preventable deaths were caused by fake Malaria medicine3. Representatives of the pharmaceutical industry aim to fulfil their duty to improve the health of their customers, so are responding to this matter. However, the problem remains vast.
T H E S O LU T I O N
One proprietary solution (Qadre) uses the security, accountability, and immutability that a blockchain provides by enabling us and our customers to track each medicine packet as it travels from the manufacturer to the customer. This gives us real-time data on the safety of pharmaceutical drugs.
Product is transferred ownership changes hands through a smart-device and the new information is logged on the blockchain database, making the new party accountable
Product is transferred ownership changes hands once again; the historic information is logged and kept, whilst adding new information - this makes the next person in the chain accountable
Annual press conference of the German Customs Administration, April 2016; Interpol, “The dangers of counterfeit medical products” Pfizer, https://www.pfizer.com/products/patient-safety/counterfeit-drugs 3 PwC, ‘Strategy&’, ‘Fighting Counterfeit Pharmaceuticals’, p.10, 2017
HOW IT WORKS
The blockchain system works by using NFC (Near Field Communication Technology, the same technology that exists within contactless cards), to give a physical item a tamper proof digital identity. The item can then be tracked, in real time, as it passes through the supply chain, ensuring that no-one tampers with it or swaps it for a counterfeit. Using Public Key systems, blockchain technology ensures that each individual has a digital identity that is nontransferable and non-replicable. When an individual has custody of an item or is responsible for an item, this digital identity is logged on the blockchain as being responsible for the item. They will be held accountable if the item is tampered with. The effect of this is three-fold: those handling the item are less likely to tamper it and more likely to take proper care in looking after it, and pharmaceutical companies receive data illustrating any risks in their supply chains, an area that is currently opaque. In this way, blockchain technology enables pharmaceutical companies to ensure that every medicine is used as it was intended – to save lives. ■
Ashley Kemball-Cook is Head of Business Development for Qadre, a blockchain product development company focussing on the application of blockchain technology in a number of sectors: www.qad.re
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