Drug Counterfeiting & How To Reduce using Barcodes vs. RFID vs. Blockchain

Published by Scott Farnum on

Drug Capsule

The Disturbing Statistics

In the past two to three years a recent study by the World Health Organization brought to light that impoverished countries lose more than 250,000 children each year due to the substandard or fake pharmaceutical products when treating malaria and pneumonia. How can we reduce drug counterfeiting using new technologies such as Blockchain, or older RFID technologies?

Many companies in the global pharmaceutical industry consider these statistics and these disturbing facts very alarming and are trying to focus more resources and energy on these issues and their end patients’ safety regarding counterfeit drugs. Most importantly, the children who are losing their lives to diseases that have already been mostly eradicated in western civilisations. 

pharma money

Several techniques have been implemented to try and limit the amount of fake drugs being distributed by many pharmaceutical suppliers, including RFID, barcoding and most recently blockchain, however, the facts remain if these systems are working and if they are not, then more quick solutions need to be identified and implemented.

The Process and Risks Involved

The complete supply chain throughout the pharmaceutical delivery process becomes more and more complicated and the risks become elevated and more vulnerable to these counterfeit drugs which more than likely are being stolen within the delivery system by insiders who swap the authentic pharmaceuticals for the fakes. A lot of these problems began with the opening of thousands of online pharmacies.

drug counterfeiting incidents

The above graph shows the total number of counterfeit incidents concerning pharmaceuticals worldwide 2002-2018. Published by Matej Mikulic, Sep 12, 2019

These statistics above represent the total number of counterfeit incidents concerning pharmaceuticals worldwide from 2002 to 2018. In 2002, 196 such incidents of pharmaceutical crime were reported by the Pharmaceutical Security Institute. However, the annual number of such incidents increased significantly over time, up to over 4,400 during 2018.

Mostly fly-by-night web sites, in fact, according to a recent study, within the past ten years roughly 30,000 online pharmacies have been selling online and many of these sites have been offering and selling both unapproved medications or counterfeit drugs. 

drug counterfeit seizures

Many companies in the pharmaceutical industry that do adhere to and meet the strict government regulations have put forth enhanced efforts to maintain a supply chain that is not compromised by these instances where counterfeit products are injected into the pipeline. These efforts include the use of QR codes, Holograms, RFID tags and the blockchain.

These newer technologies that include the Radio Frequency Identification (RFID), bar coding can help automatically detect counterfeit drugs and theft in many instances, however, they are not immune from problems stemming from forgery and imitation.

Below is an overview that includes each of the advantages and disadvantages when faced with the problems regarding pharmaceutical counterfeit drugs that drastically affect a companies global reputation and also their end consumers well being.

Using Barcodes

Tracking pharmaceutical shipments using barcodes are quite common in the industry. This is an affordable technology that can automate and identify counterfeit drugs at the package level. Printing and attaching the bar codes do help to protect these shipments from theft. It is important to note that these barcodes not simply be a pre printed label, but embedded in the actual packaging that will notify of any type of counterfeit drugs at an item level.

Advantages using Barcodes

Barcoding is a simplified process. Very easy to scan and identify counterfeit drugs as the barcode readers will alert the system of duplicated tracking codes which should inform people in charge to take action. Barcode systems are also easily scalable with existing systems in place. 

Barcode Disadvantages

Human error and interaction plays a large part in the disadvantages of barcodes. For example, at each and every transfer point along the distribution process requires a person physically scanning the products, or packages. 

It also seems quite easy to duplicate barcode tags at the item levels that can be manipulated and it seems not to be an easy task for deploying editable bar coding in a large scale environment or on a global level. 

Bar coding pharmaceutical products in practice seems to be a good solution, however can present problems if the fake product gets dispensed before the original one; the barcode may catch the original as a duplicate and this might cause the entire process to unknowingly hold back a genuine product shipment.

Using RFID

RFID (radio frequency identification) uses modern identification procedures that provide transparency in pharmaceutical transportation logistics. Normally, these RFID tags can be hidden inside an ordinary shipment or even on a shipment label. This allows for more accurate tracking of the drug’s progress throughout the supply chain. 

This also allows for alerts that would instantly reject any shipment that could not be traced back to the manufacturer through the RFID scanning process.

However, in some environments or the shipping process, metal packaging for example, used for medical products like tubes, could cause hiccups with the identification process where the alerts that need to be identified go un documented, or worse go unnoticed. 

Advantages of using RFID

Increased knowledge of each product or package in storage and their conditions that are tagged with RFID. Fixed scanning via readers can be accomplished by automated scanning equipment instead of human interaction, minimizing errors. 

RFID Disadvantages

Most RFID systems lack production to suppliers to end customer security so far and also require more infrastructure in the companies existing systems. This would include when multiple transportation elements are involved in the delivery chain.

RFID works well for storing products, but not very well for tracking the delivery of goods due to the high cost per RFID tag and easily replicated when fake products are involved.

Using Blockchain 

The pharmaceutical blockchain works by enhancing and increasing the data security and integrity which is why there is a great potential in the industry as a unified solution to finally start resolving these issues of counterfeit drugs. This all starts with making the entire pharmaceutical distribution system trackable at each and every point in the supply chain.

These new techniques and blockchain systems allow for the supply chain to be functional, transparent and most importantly auditable where any real time issue or problem can be resolved quickly in the delivery process.

Advantages of using Blockchain

The major advantages of using a blockchain system ensures the trackability from the production facility, to the supplier to the end customers and the ability to be alerted instantly when there are any problems with a shipment. This enables the company to be proactive in dealing with these types of issues. This will reduce losses from counterfeiting and theft

Also, unlike barcodes and RFID tags above, blockchain systems have proven to be much more secure and not susceptible to threats of tampering with the system data.

The blockchain systems also have proven to be cost effective in the long term solutions to these issues with reducing costs of theft, fake drugs and counterfeit products

In Summary & Conclusion

Using all of the latest technologies that are available on the market today, most pharmaceutical companies both small and large can build or implement a system which will be most suitable for their size and budget. There are also many support companies out there, and available that will help with consulting and support for these systems. 

Hopefully, all of the details included above regarding the advantages and disadvantages of each system will help you to decide which would help you the most to reduce these threats of counterfeiting and theft and make your decision easier.


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