Combating Counterfeit Drugs with SAP and Blockchain | HCLTech

Combating Counterfeit Drugs with SAP and Blockchain

April 01, 2021
Shailesh Mahajan


Shailesh Mahajan
SAP Practice Offering Manager
April 01, 2021

Counterfeit drugs: A global problem

Counterfeit drugs are one of the Pharma industry’s most serious problems. The Health Research Funding organization reported that in developing countries, 10–30% of available drugs are fake. Similarly, the WHO has reported that around 30% of the total medicine sold in Africa, Asia, and Latin America is counterfeit. Counterfeit drugs can have serious health repercussions, ranging from a lack of active ingredients to adverse reactions due to mislabeled, or wrong quantities of, ingredients.

Counterfeit products are a major global issue, with the situation deteriorating in developing countries. The rise of online pharmacies has made standardizing drug safety more difficult. Pharmaceutical companies find it difficult to detect counterfeits because these drugs travel through complex distributed networks, creating opportunities for counterfeits to enter the true supply chain.

According to the Health Research Funding organization, 10–30% of available drugs are fake in developing countries.

It's also a big business. According to Reuters, the global counterfeit market may be worth up to $200 billion per year. The prevalence of counterfeit drugs is extremely high in developing countries. However, even in the developed world, you can purchase previously returned life-saving medication from your local pharmacy. Your drugs could be fraudulent if the manufacturer did not adequately verify the return.

According to Reuters, the global counterfeit market could be as big as $200bn within a year.

The challenge of regulation

To prevent drug counterfeiting, governments around the world have passed regulations requiring specific product identification at the production unit level, as well as industry verification or complete track and trace in respective markets. Although all supply chain stakeholders are involved in the track and trace process, verification is assigned to particular participants based on local requirements.

In Fact, several governments have begun to enforce new laws in order to restrict drug manufacturing and distribution. This involves distinguishing items at the saleable level in a specific way (i.e., drug units as sold to the end user). Serialization is the term for this particular product recognition.

SAP teamed up with leading pharmaceutical firms such as Merck, GlaxoSmithKline, AmerisourceBergen, and Boehringer Ingelheim in 2017 to develop a blockchain-based decentralized and distributed ledger solution and an application to meet legal compliance requirements.

Understanding the SAP Information Collaboration Hub (ICH)

SAP released the SAP Information Collaboration Hub for Life Sciences, which is focused on the SAP blockchain solution and technology. SAP launched the first proof of concept in Q3 2017, followed by a second in early 2018. On January 16, 2019 SAP then announced that its "SAP Information Collaboration Hub for Life Sciences" blockchain solution for the US pharmaceutical supply chain has gone online.

Using SAP blockchain technology, the SAP Information Collaboration Hub aids in the elimination of counterfeit products throughout the pharmaceutical supply chain.

The SAP ICH helps eliminate counterfeit products along the pharmaceutical supply chain.

The SAP blockchain solution is designed to reduce drug counterfeiting by adhering to directives issued by governments around the world requiring drug serialization and commensurate compliant reporting. It significantly reduces the cost and risk of pharma companies implementing required collaboration capabilities. The hub grew out of SAP's pharmaceutical network and other large pharmaceutical networks.

It utilizes a digital network based on the SAP Cloud Platform and allows manufacturers and trading partners to share large volumes of serialization and associated traceability information securely.

SAP ICH uses SAP Cloud Network Integration Services to share messages between the sender and the recipient. Depending on their business needs and technological specifications, SAP ICH provides its customers/partners with different connectivity choices. It can be accessed via web apps, SOAP, AS2, or SFTP via B2B (machine to machine), and using TPI (third-party integration) services.

Sap information Collaboration

Supported supply chain partners

The SAP Information Collaboration Hub for Life Sciences connects pharmaceutical supply chain partners, such as:

  • Marketing Authorization Holder (MAH)
  • Wholesaler
  • Contract Manufacturing Organization (CMO)
  • Third-Party Logistics service provider (3PL)
  • Governing Body

Service Options

A subscription to the SAP Knowledge Sharing Center for Life Sciences is required to gain access. Subscription options include:

  • Supply Chain Partner Collaboration with partners such as MAHs, CMOs, 3PLs, wholesalers and so on
  • Regulatory Reporting
  • Supply Chain in United states

How does the solution work?

  • SAP has released solution called Advanced Track and Trace for Pharmaceuticals (ATTP) that creates unique identifiers for drug package. The pharma blockchain is quite simple to use as it does not require any complex coding and configurations. Advanced Track and Trace (ATTP) helps to store information into four pieces: the item number based on the GS1 standard, the serial number, the batch number, and the expiry date.
  • The items get registered on the blockchain when a manufacturer ships a box, and this is stored transparently. Other groups may use their local copy of the blockchain to access information.
  • Through its scanner app, the wholesale distributor extracts the four pieces of information from the barcode of the box. They will verify that any returns will have a distinctive identity.
  • With specific code recognition, SAP has added the ability to monitor any time a package changes hand. You can actually see when certain medications are bought by a consumer. It's much easier to spot a problem if the retailer receives a returned product with the same ID. There is a map view that helps guarantee that the drugs are in the area that you would expect them to be.

Benefits of the SAP blockchain solution

  • Regulatory compliance
  • End-to-end traceability of drug products
  • Reduced losses related to counterfeiting
  • Transparency to enhance accountability
  • Cold chain shipping and tracking
  • Efficient recall management



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