Indian Think Tank Proposes Digitizing Medicine on Blockchain to Fight Counterfeits


Indian think tank the National Institution for Transforming India (NITI Aayog) is hoping to put all drugs made and consumed in the country on a blockchain in attempts to crack down on counterfeits, according to sources with NITI Aayog. Despite the fact that India has been a vocal supporter of blockchain-based technologies, the country made headlines this week after barring its state financial institutions from funding cryptocurrency-related ventures.

NITI Aayog

The move to digitize drug records on a blockchain, a NITI Aayog official said, will help the government and pharmaceutical firms curb the increasing amount of fake drugs in the country — an industry worth about Rs 15,000 crore, or $2.3 billion dollars. NITI Aayog wants to complete a proof of concept (PoC) solution by the end of the year, and begin implementation in 2019.

“We are all taking those medicines and I am sure people are dying. One way to reduce that is put the entire supply chain on the blockchain,” the official said. “We have identified a company that will do the technology for us. Now we have to identify a partner and do the PoC on the blockchain.”

The government sources involved asked for their identities to be kept hidden as they’re not authorized to speak with the media.

Though it’s apparent that counterfeit drugs are a big problem in India, numbers vary. Industry trade association ASSOCHAM estimates that one in five drugs are fake — this taking into account both illegal copycats and fake drugs with no clinical efficacy. But According to the World Health Organization the number is smaller, with 10.5% (or about one in ten) of drugs in low and middle-income countries, including India, being substandard.

The sources explain how the initiative might work:

“Every time the medicine changes hands, the unique number (generated at the manufacturing stage) is tracked. When the consumer gets the drug there is a QR code or a barcode on it… you can open up an app, and you can check the entire details of where it was manufactured and all the places where it exchanged hands to travel to the shop.”

Further, “Once you have sold it, the code gets irrevocably audited on the blockchain that this ID has been sold, and no longer exists.”

Indian Pharmaceutical Alliance

Industry insiders like Dilip Shah, Secretary General of industry lobby Indian Pharmaceutical Alliance, support the move to blockchain: “Fake drugs are a concern and if blockchain can help the industry get rid of the problem we are up for it,” Shah said.

But despite this support, some are apprehensive, worried that the project will cost too much, as even simple two-dimensional barcoding comes with a hefty price tag. Shah hopes the government will foot the bill:

“If the government is willing to consider it that it is an additional cost and compensate it, the industry will have no objection,” he said.

Another notable problem is that taking the first steps to putting India’s medical inventory on blockchain will reduce drug production numbers, at least at the beginning. According to Shah:

“Additional barcoding will result in a production loss of 25% in the short term at least.”


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