How Blockchain, AI, and IoT Can Pave the Way For 0% Drugs Counterfeiting

Many times, patients unknowingly purchase counterfeit drugs prescribed by the doctor as treatment for a disease or illness. Not knowing the significance of the active ingredient present in the pharmaceutical drugs blindside these patients. As a result, several of the counterfeit drugs end up harming the health of the patient, making this market extremely risky for everyone.

Many times, patients unknowingly purchase counterfeit drugs prescribed by the doctor as treatment for a disease or illness. Not knowing the significance of the active ingredient present in the pharmaceutical drugs blindside these patients. As a result, several of the counterfeit drugs end up harming the health of the patient, making this market extremely risky for everyone.

India is the largest provider of low-cost generic medication and hence also observes a parallel economy of counterfeit drugs. As the development and discovery of new drug products are comparatively easier and inexpensive in India due to lower processing and manufacturing costs, we are the third largest pharmaceutical in terms of volume. But, when it comes to value, this ranking drops to thirteenth.

While the issue of counterfeit drugs is pervasive, India contributes to a large portion of it. According to a report, counterfeit drugs take up 20% share of the pharmaceutical market. Another research by Outsourcing Pharma says that India had a connection with 75% of the counterfeit drugs supplied all over the world in 2012.

Between the years 2015 to 2017, FDA (Food and Drug Administration) sent 31 warning notices to pharmaceutical companies stating issues like data deletion, data fabrication, data manipulation, and other data integrity issues.

Due to the severity of the counterfeit market, in this article, we will discuss the current situation of counterfeit medicines in the pharmaceutical industry, its impact, existing solutions, and smart solutions.

However, before moving forward, let’s understand what counterfeit drugs are and why this parallel economy exists.Counterfeit medicine is developed with the intent of deceptively presenting a drug’s authenticity, origin, and effectiveness. These drugs contain the wrong proportion, quantity, or quality of the active ingredient. Sometimes, a counterfeit drug may not contain any active ingredient at all. Most of the time, counterfeit drugs are developed with wrong processes or without considering the pharmacokinetic properties of the active compound. Simply put, anything from inaccurate packaging to not mentioning actual ingredients on the packaging can contribute to drug counterfeiting.

Of course, these drugs put the safety of patients at stake and impact the health negatively. Hence, health organisations and leading pharmaceutical stakeholders are constantly working towards developing technology to improve the traceability of the drugs. This can reduce the circulation of counterfeit drugs in the market and stop the functions of this parallel industry.

Here are some reasons why counterfeit drugs are in circulation:

  1. Low medical access in rural areas.
  2. Fragmented and uneven supply chain.
  3. Low consumer awareness about counterfeit drugs.
  4. Prevalent self-medication practices.
  5. High costing genuine drugs.
  6. Weak legislation and strong corruption.

Importance of Anti-Counterfeiting Solutions

Counterfeit drugs are a worldwide problem that adversely impact consumer health, economy, and business. Here are some of the reasons why it is absolutely necessary to have anti-counterfeiting solutions to curb the circulation of fake drugs in the global markets.

No-Impact Drugs

When the counterfeit drug has no active or harmful ingredient, it doesn’t help the patient. The drug would fail in the treatment of the disease or the underlying condition that the patient is facing. This would ultimately end up harming the patient. Even the physician might keep prescribing higher doses without knowing that the drug is counterfeit.

Harmful Drugs

When a counterfeit drug has no active ingredient but instead is made of multiple harmful ingredients, it impacts the patient’s health severely. These harmful ingredients may include floor wax, contaminated water, toxic paint, coloured dye, boric acid, etc. These ingredients affect the health of the patient and sometimes even lead to death.  It is known that counterfeit drugs such as ethylene glycol in cough syrup takes the lives of more than 500 children globally every year.

Wrong Active Ingredient

When the wrong active ingredient is present in the counterfeit drug, its harmful effects can be worse. Patients may unknowingly consume the wrong drug product for longer durations, thereby harming their bodily functions. Many of these drugs may even interact with other medications that the patient is consuming. There is no way for the physician to acknowledge this risk as it is not possible to assess a wrong active ingredient without lab experimentation.

Faulty Dose Drugs

Many counterfeit drugs have the wrong dosage, and thus are not suitable for the human body. In one study, a physician found out that the drug had concentrated dosage which was apparently not suitable for human consumption. Individuals who consumed this drug had a near-death experience or suffered respiratory paralysis.

Drug Resistance

One of the major consequences of counterfeit drugs is microbial resistance.

When counterfeit drugs have low active ingredients, though they may fail to cure the underlying disease, these drugs cause drug resistance. Drug resistance ends up harming the individual more than the illness itself. In fact, drug resistance is one of the reasons why medications for tuberculosis, malaria, or HIV are failing.

Undermining Generic Drugs

Generic drugs are usually developed to provide a source of low-cost medication to individuals. However, due to the counterfeit market, its relevance is decreasing. Circulation of the low-cost generic drugs also gives rise to counterfeit drugs, which stops pharma leaders from providing low-cost drugs.

Economic Burden

Presence of counterfeit drugs creates a parallel economy which hampers the growth of the actual economy. The legitimate drug manufacturing firms are losing at least 40% of the pharma market to counterfeit drugs. This additionally ends up tarnishing the brand name of many pharma manufacturers. Together, all these factors along with lost revenue severely impact the economy of the country.

Loss of Business

Since India is one of the major providers of generic drugs, genuine players are losing business due to bad publicity. This impacts the economy of the country and severely damages business opportunities of many pharma companies.

Existing Solutions

Currently, mass serial encryption or digital mass serialisation is the most commonly utilised technique for preventing counterfeit medicines. This technique generates unique alphanumeric or numeric serial numbers for every unit of the drug packet. These serial numbers are either generated with a pseudo-random method or sequential method.

These codes are then identified at the point of sale by the consumer of the product such as pharmaceutical distributors or shop vendors. Either a bar-code scanner or smartphone scanner is utilised to scan the 2D barcode and assess the authenticity of the product.

While the method seems simple yet effective, it has various loopholes. It is not as simple as encrypting the data and decrypting it at the point of sale. The counterfeit organisation can just as easily either decrypt the data or copy it.

The decryption key is not only available to the customer, but it is also usually present in the decryption app as well. Further, if not that, then the counterfeiter can copy the encryption data and replicate the information across several medicines.

How Blockchain, IoT, And AI Can Help…?

The blockchain technology paired with AI and IoT can provide a solution. When drugs are manufactured, placed in packets or bottles, and packed in a group, these packages can be labelled. The labels on the packages would be scanned at every point from the factory to the distributor or pharmacy. These labels would form a chain in the blockchain system.

At every stop or junction, the drop or pickup activity would be recorded in the blockchain system with a time stamp. While every stakeholder in the supply chain would be able to identify the authenticity of the medicine, no stakeholder would be able to change any information including his own.

Since this blockchain model is real-time and decentralised, it is nearly impossible to hack into this system to acquire information regarding medicines.

When this system is integrated into the Internet of Things, it connects the physical and the digital world. With the help of IoT, the distributed ledger of blockchain gains the ability of recording location, origin, and ownership of products at every single stage of the supply chain. The IoT technology also helps manufacturers mark the humidity and temperature-sensitive drug products separately for safe arrival at the destination.

Combining this method with Artificial Intelligence links the system to peer-to-peer contractual performance without the need of a third-party who can identify IoT transactions.

Together, all these technologies resolve challenges and help the pharma industry build trust in the supply chain.

Blockchain system further helps the manufacturers form an effective back-supply when a drug package is returned. It can be ensured that this packet is not compromised along the journey.


RealMed is an effective track and trace system for anti-counterfeit drug movement across borders. This system is powered by blockchain, IoT, and AI, providing enhanced validation checks, secure network, and sensitive data monitoring capabilities. The system follows the principle of blockchain network which helps in identifying counterfeit transactions almost immediately, in real-time.

According to global standards, this system of drug track and trace is GS1 compliant with full transaction transparency. The well-thought structure, architecture, and features have the ability to reduce counterfeit drug regulation to zero in no time.

For more information about this cost-effective solution, visit our website or reach out to us at hello@RealMeds solutions.