Pharma companies consider blockchain to track counterfeit drugs

Pharmaceutical companies such as Genentech and AmerisourceBergen Corp. are testing different blockchains to determine whether the technology can track counterfeit drugs, according to Bloomberg Law.

Efforts to monitor fake  drugs stem from the FDA's new requirements to verify serial numbers on returned drugs before selling them. The new rules go into effect in November.

By using blockchain, drug supply chain and pharmaceutical companies can use the decentralized ledger to track and verify each drug's movement on the unchangeable record. The blockchain would record each time a drug swapped hands, assisting companies in detecting tainted products before they reach consumers.

To get blockchain fully integrated, all companies must be on board, according to the report. Some pharmaceutical companies may be hesitant to switch to a new infrastructure if they already have a different system in place. Companies also are weighing privacy risks, since the blockchain is transparent to all parties.

"Blockchain is a real game-changer for the pharma industry," Samuel Kramer, a partner at Baker & McKenzie, told Bloomberg Law. "But if you don't have anyone on the blockchain, you can't rely on its immutability."

U.S. wholesale distributors receive 58.7 million units of  salable drug returns annually, according to a Healthcare Distribution Alliance report. Distributors may then make at least 225,000 verification requests to manufacturers per day, when the new FDA requirements go into effect.

Blockchain is among the solutions that could improve efficiencies when verifying and validating the requests.

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