Indian Government Body Trials Blockchain To Combat Fake Drugs

Blockchain, News | April 11, 2018 By:

The National Institution for Transforming India (NITI Aayog) is working on a proof of concept (PoC) for a blockchain system that could track all drugs produced and consumed in the country.

NITI Aayog is a policy think tank of the Indian government. It is established with the aim of achieving sustainable development goals and enhancing cooperative federalism by fostering involvement of state governments in the economic policy-making process using a bottom-up approach.

The new blockchain system will be designed to put the entire inventory of drugs made and consumed in the country on the distributed ledger to weed out illegal medicines that are manufactured every year in the regional market.

According to an unnamed Niti Aayog official, the blockchain system will help the government and pharmaceutical companies to curb the rising problem of fake drugs in the country. He added that they have identified a company that will provide technical support for some aspects of the project, but is still seeking a partner to help implement the elements of the PoC relating specifically to blockchain technology.

Counterfeit drugs are a multi-billion dollar problem around the world. According to the World Health Organization (W.H.O), 75 percent of counterfeit drugs supplied world-over have some origins in India. The Associated Chambers of Commerce and Industry of India (Assocham) estimates one in five drugs are fake and the industry is growing at 20-25 percent every year.

NITI Aayog hopes to counter this by labeling each drug packaging with barcodes or QR codes that would correspond to an entry on a blockchain.

“Every time the medicine changes hands, the unique number (generated at the manufacturing stage) is tracked,” the official said. “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. Once you have sold it, the code gets irrevocably audited on the blockchain that this ID has been sold, and no longer exist.”

D.G. Shah, secretary general of industry lobbying body, Indian Pharmaceutical Alliance, was wary of the high cost that pharmaceutical manufacturers might have to bear and said, “If the government is willing to consider it that it is an additional cost and compensate it, the industry will have no objection.”

Niti Aayog also plans running blockchain pilots on electronic health records, land records amongst others. The Indian government is currently piloting trials to award degrees under Niti Aayog. The plan is to begin issuing digital certificates on the blockchain from the 2019 batch onwards.