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India’s Niti Aayog to Combat Fake Drug Problem with Blockchain Technology

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India’s Niti Aayog to Combat Fake Drug Problem with Blockchain Technology

The National Institute for Transforming India, popularly known as the Niti Aayog, is in the process of creating a blockchain-based tool for tracking the inventory of drugs within the country. According to a Factor Daily report dated April 9, 2018, the Indian policy think tank wants to use blockchain technology to weed out illegal medicines that are manufactured every year in the regional market.

Proof of Concept by End of 2018

The report highlights that the government “wants to complete a proof of concept (PoC) solution by the end of the year and begin implementation by 2019.”

India is the world’s largest producer of drugs, with local companies accounting for 20 percent of total annual sales of generic medicines globally. The current Indian pharmaceutical market is mainly divided into branded generics and research molecules. Generic medicines have a molecular composition that can be used by more than one manufacturer.

Once the manufacturer registers this composition under his own trademark though, it becomes a branded generic. On the other hand, some molecules are a result of several years worth of research, giving the research companies exclusive rights to the molecules for a number of years or until the patent is issued.

However, once the patent of a medicine expires, it becomes available for other manufacturers also to launch their own medicine having a similar or same composition. This has resulted in an explosion of several pharmaceutical manufacturing companies who solely manufacture branded generics.

The situation has given rise to instances where fake drugs or those that do not meet safety norms have been released in the market by smaller manufacturers. Most of the production of the Indian pharmaceutical industry is concentrated in Baddi, a town in the northern state of Himachal Pradesh.

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Stamping Out Fake Drugs, a Big Problem in India

The problem of fake drugs is acute in the world’s second most populous country. A Niti Aayog official was quoted, “We are all taking those (fake) medicines, and I am sure people are dying. One way to reduce that is put the entire supply chain on the blockchain.”

Industry body Assocham estimates that one out of every five drugs sold in the country is either fake does not meet standards or has failed to clear a clinical trial. However, the Central Drugs Standard Organization estimates that only 0.05 to 0.03 percent of drugs are knockoffs.

The council has planned that every drug manufactured in the country will now have a two-dimensional barcode, the details of which will then be put up on a blockchain. Thus, all details of the medicine such as batch number, date of manufacture and details of manufacturing plant will be stored on an immutable ledger.

Typically, when a drug is manufactured, it reaches the marketing company and then goes through a series of distribution agents such as super stockists, stockists, carry forward agents, finally reaching the chemist. A benefit of having all this data on the ledger is that it will become easier to follow the trail of a dubious medicine should a doubt arrive on its quality.

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.”

In February 2018, Niti Aayog had announced plans to begin trial implementations of awarding digital degrees to students that would be stored on the blockchain. The organization is also working on IndiaChain, a blockchain powered setup to digitize land and other records as well.

Though the Indian government may not be supportive of cryptocurrencies, it certainly sees merit in the underlying blockchain technology. On April 6, 2018, the Reserve Bank of India announced a ban on banks from dealing with companies related to virtual currencies, effectively eliminating most fiat to cryptocurrency ramps in the country.

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