With hundreds of thousands of lives at stake and millions lost in treatment costs, companies and regulators are beginning to embrace a digital defense system like blockchain to track medicines from lab to shelf.
Substandard and falsified medicines are a global health crisis, affecting millions of people every year. According to the World Health Organization, at least 1 in 10 medical products in low and middle-income countries is counterfeit.
In sub-Saharan Africa alone, up to 267,000 deaths annually are linked to falsified antimalarial treatments, according to the UNODC’s 2023 report on medical trafficking.
The financial toll is staggering too. WHO estimates that treating patients harmed by counterfeit malaria medication costs sub-Saharan African health systems between $12 million and $44.7 million each year.
That’s why a growing number of companies are turning to blockchain and artificial intelligence (AI) to secure the pharmaceutical supply chain.
“Blockchain creates an unchangeable record of each product’s journey, for real-time tracking and verification,” Jadd Elliot Dib, CEO of Pangaea X, told The Crypto Radio.
In the pharmaceutical sector, blockchain is already being applied to improve transparency. MediLedger, for instance, uses a permissioned blockchain to ensure compliance with the Drug Supply Chain Security Act (DSCSA), tracking prescription drugs from manufacturer to pharmacy and enabling secure data sharing among partners.
“This ensures the right medications reach patients at the right time,” Dib said.
AI and blockchain together: a new layer of defense
Some solutions go further by combining blockchain with AI. FarmaTrust, for example, focuses on counterfeit detection in high-risk regions like Africa and Asia by using both technologies to track medicine in real time.
In 2020, the World Health Organization partnered with Estonia and Guardtime to pilot blockchain-based COVID-19 vaccination certificates, aiming to ensure vaccine authenticity and prevent counterfeits.
The pilot project, known as VaccineGuard, involved multiple countries, including Estonia, Hungary, and Iceland. The initiative utilized Guardtime’s KSI Blockchain technology and Estonia’s X-Road data exchange platform to create a secure and interoperable system for verifying individuals’ vaccination status.
Maciej Stachowiak, CTO of AxonDAO, told The Crypto Radio how AI-powered image recognition and sensor data can help identify counterfeit drugs.
“AI analyzes visual elements – such as logos, fonts, colors, and packaging patterns – comparing them to authentic templates to spot inconsistencies, like a slightly off-center logo or mismatched typeface,” he said.
“Sensors measure physical properties, including weight, temperature, or even humidity levels inside packaging, flagging deviations from expected norms, such as a lightweight blister pack indicating missing pills.”
“Blockchain QR codes or RFID tags link to secure, unalterable records, verifying the drug’s journey from production to sale.”
Trust, training, and regulation still hold tech back
Dib cautioned that training data is critical. “Recognition and identification are only as good as the data sensors capture and the quality of the training data set it has been fed.”
Despite the potential, Dib believes that there is still a lack of public understanding. “I don’t believe people have gotten to the point where there is full understanding of this technology. This results in mistrust, which then translates to lower levels of adoption and interest.”
“The complexity of supply chains makes integration challenging,” Stachowiak agreed. Data standardization is also a “significant issue, as regions use different formats for critical information like batch numbers or expiration dates.”
“Regulatory alignment also complicates adoption, with laws like Europe’s GDPR requiring stringent data privacy, while the US HIPAA demands robust security measures,” Stachowiak said.
In low-income countries – where counterfeit drugs are most prevalent – cost, weak infrastructure, expertise gaps, and resistance all stand in the way of adopting blockchain-based tools.
“Solutions include funding, mobile tools, training, and partnerships. StaTwig’s work in India, a software company that uses blockchain and deploys its VaccineLedger to trace vaccines, shows how SaaS models can ease adoption,” Stachowiak said.
Governments test tech to rebuild trust
Regulatory bodies are beginning to adapt to the new tools. The US Food and Drug Administration is conducting pilots, including MediLedger’s DSCSA test, to explore how blockchain can be used to track prescription drugs and ensure each transaction is verifiable and compliant.
The FDA is also crafting frameworks to regulate AI’s use in packaging analysis and quality control.
“Agencies are collaborating with industry leaders to refine these technologies,” Stachowiak said. “As benefits – like faster, more accurate authentication – solidify, regulators may mandate adoption, reshaping pharmaceutical oversight globally.”
“As long as systems are compatible and regulatory frameworks are developed accordingly, public health agencies will reap many benefits,” Dib agreed.
Still, Dib noted that broad effectiveness depends on broad adoption.
“If they’re not globally adopted, then there will always be a gap in their capabilities. The solutions are there, the technology does what it says it does, but its detection and tracking capabilities can only be fully effective if most, if not all companies use it.”
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