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Counterfeit drugs have been a worldwide problem for decades. It's estimated that every year 250,000 children die because of them. And inefficient supply chains mean more expensive drugs. Regulatory requirements mean there are significant reporting burdens on pharmaceuticals.


Legal Background:

Governments are enacting legislation to fight the falsification of drugs, requiring the serialization of drugs and reporting to governmental or institutional databases and/or supply chain partners.

In America, the Food and Drug Administration (FDA) started enforcing key provisions of the Drug Supply Chain Security Act (DSCSA) in November 2019.  DSCSA requires each individual unit of a pharmaceutical product to have a unique product identifier.  This unique product identifier or serial number will be linked to vital information about the origin of the product, the pharmaceutical product batch number when it was manufactured and the expiration date.  This will enable individual pharmaceutical products to be traceable from the point they are manufactured to the point of final dispensation to the consumer (patient)

DSCSA also requires wholesale distributors to verify saleable returned drug products prior to redistribution go into effect on November 27, 2019.


Solution Overview:

We developed a proof of concept (POC) to help solve these problems using the most innovative new technologies. We use blockchain and advanced data analytics to eliminate fake medicines from the supply chain and bring about greater efficiencies. Integrating the manufacturers, warehouse, shipping and logistics companies, all the way to the hospital or pharmacy, we track each item and package on the blockchain. We can check whether a medicine is genuine or not by using the mobile scanning app. Fake medicines don't enter the pharmaceutical supply chain. And data analytics make delivery systems more efficient. We prevent price distortions through efficient distribution of medicines. We have the ability to allow automated regulatory reporting and facilitate automatic payments throughout the supply chain.


Technical Details

In our POC, We used SAP Cloud Platform Blockchain service. It's a blockchain-as-a-service (BaaS) that provides the easiest, lowest-risk gateway to experimenting with distributed ledger technology in the cloud. Eliminate the need for a large upfront capital investment and fast-track blockchain implementation.

Blockchain services on SAP Cloud Platform are available within the Service Marketplace as several services, each of which can be provisioned individually as required.

At a technology level, there are services for Hyperledger Fabric, MultiChain, and Quorum. Any of these services can be used to provide relevant blockchain technology. In addition, SAP offers a set of blockchain agnostic services, which are grouped within the Blockchain Application Enablement service. These services are for example a timestamp service, or integration with the HANA database.

We used MultiChain service for its simplicity and being fast to market. If you are interested in learning more about different blockchain technology you can check out this blog.

The MultiChain service on SAP Cloud Platform lets you create, delete, monitor, and maintain individual MultiChain nodes and then connect them to a blockchain network. This service is supported by Small, Medium, Large, and Connect Your Own Network productive service plans.

We created nodes by expiration year. Because after the drugs expire, their data become less relevant and the node can be removed from the MultiChain network if needed.

Each node has its own dashboard. When accessing the MultiChain dashboard, we can view the following information:

  • Node information: Display node and network configurations.

  • Transactions: Display and monitor MultiChain transactions.

  • Blocks: Display and monitor MultiChain blocks.

  • Streams: Display and monitor MultiChain streams.

  • Assets: Display and monitor MultiChain assets.

  • Permissions: Display and monitor MultiChain Permissions. Grant other nodes access.

We use MultiChain streams to store our data. MultiChain streams allows us to use the MultiChain as a key-value pair database. For more information on MultiChain streams, see: MultiChain Data Streams.

We also developed a UI5 app for the manufacturers. The app provides a way for manufacturers to enter any drug related data and register the drug. A hashed value is generated automatically based on GTIN and Serial Number of the product upon entering these two values. After registering the drug, the hashed value is written into blockchain as the key and the data itself will be stored as its value.

Once the drug is registered, the drug is ready to be distribute to the suppliers, then distributors and eventually to the customers. For whatever reason, the drug needs to be returned to the pharmacy warehouse. The pharmacy can use the Drug Verify app to verify the authenticity of the drug by simply scanning the barcode and posting the barcode value against the blockchain service.

If the verification succeeds, the app automatically display all the related drug information and the pharmacy warehouse can accept the returned drug. If the verification fails, the pharmacy warehouse can reject the returned drug. Moreover, the app also logs each verification request along with information like requested timestamp and requested location. These data are stored in the SAP Cloud Platform HANA instance.

Without data analytics, data has no real value to any company . So we exposed the data stored in the HANA through an oData service to SAP Analytics Cloud where we can analyze the data and generate useful insight.

For example, we can see suspicious activities based on their locations and find out which pharmacy warehouse is dealing with more counterfeit drug problems.

We can also find out the correlation between the number of verification request and suspicious activities.



In our POC, we demonstrate how we can use blockchain in conjunction with data analytics to prevent counterfeit drugs from entering the supply chain and save millions of dollars for companies every year. And most importantly, we can save lives!