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Product Code: 00006450

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In recent years, poor quality and counterfeit drugs have penetrated the Pharmaceutical Supply Chain (PSC) at an increasingly alarming rate. One factor that has significantly contributed to this surge of fake drugs in the supply chain is the lack of traceability. Therefore, a need arises for the implementation of a solution that would ensure traceability i.e., the product’s journey would be visible to all stakeholders within the supply chain. This paper aims to address this problem using a blockchain network that accepts accurate tracking data for monitoring drug commodity movement history. Blockchain allows for distributed peer-to-peer networks where non-trusting members can interact with each other without a trusted intermediary, in a verifiable manner. It is also immutable. Specifically, this study aims at enabling consumers to verify the provenance of their medication.
An exploratory sequential design was adopted for this study. A non-probability sample was used. Google forms were used to collect information from the respondents. A blockchain prototype was developed using the Design Science Research Methodology. Then, virtual interviews were conducted with participants to evaluate the system’s functionalities. The developed system traced a given product using its unique ID back to the manufacturer. That way, a product’s journey was transparent to all stakeholders within the supply chain. Feedback obtained from respondents suggests that traceability is likely to greatly contribute to reduced instances of counterfeit drugs in the market.

Keywords: Pharmaceutical Supply Chain (PSC), Traceability, Blockchain, Identification (ID), Counterfeit.



1.1 Background 9
1.2 Problem Statement 11
1.3 Research questions 11
1.4 Objectives 11
1.5 Scope 12
1.6 Assumptions 12
1.7 Significance 12

2.1 The Pharmaceutical Supply Chain. 13
2.1.1 Injection of Counterfeit Drugs into the Supply Chain 14
2.1.2 Traceability in the Pharmaceutical Supply Chain 15
2.2 Anti-Counterfeit technologies 16
2.2.1 Barcoding 16
2.2.2 RFID tags 17
2.2.3 Calling in the Numeric Token (CNT) 17
2.2.4 Serialization 18
2.2.5 Blockchain Technology 18
2.2.6 IoT integrated Blockchain. 21
2.3 Summary 22
2.4 Gap Statement 23
2.5 Conceptual Model 23

3.1 Research Design 25
3.1.1 Target Population 26
3.1.2 Sampling 27
3.1.3 Sample Size 27
3.1.4 Data Collection 27
3.1.5 Data Analysis 30
3.2 Design Science Research Methodology 30
3.2.1 Problem identification. 30
3.2.2 Definition of the objectives. 31
3.2.3 Design and development. 31
3.2.4 Demonstration. 32
3.2.5 Evaluation. 32
3.2.6 Communication. 32
3.3 System Validation 32
3.4 Ethical Concerns. 33

4.1 Presentation of Results 34
4.1.1 Questionnaire 34
4.1.2 Setting up the Blockchain Network 39
4.1.3 System Implementation 42
4.1.4 API Testing 49
4.1.5 Validation 53
4.2 Discussion 53
4.2.1 The Final Model 56

5.1 Summary 57
5.1.1 Requirements for the blockchain solution to tackle the issue of drug counterfeiting 57
5.1.2 Consortium Blockchain Suitability For a Pharmaceutical Supply Chain 57
5.1.3 Data veracity and traceability in a blockchain solution 58
5.2 Limitation 58
5.3 Recommendations for further work 58
Appendix 1: Questionnaire 64

Table 1. 22

Table 2. 45

Table 3. 46


RFID - Radio Frequency Identification DoS - Denial of Service
CNT - Calling in the Numeric Token ID - Identification
PPB - Pharmaceutical and Poisons Board HPTs - Health Products and Technologies
LMIS - Logistics Management Information System KEMSA - Kenya Medical Supplies Authority
LMICs - Low- and Middle-Income Countries
OECD - Organization for Economic Cooperation and Development EAC - East African Community
KAM - Kenya Association of Manufacturers PSC - Pharmaceutical Supply Chain
SC - Supply Chain


1.1 Background 
The African Community of Practice on Managing for Development Results (2017) claims that piracy and counterfeiting have become a global epidemic, draining resources from businesses and the economy, jeopardizing investments in innovation and creativity, and posing dangers to consumer health and safety. The amount of subpar and fake goods has significantly increased in African marketplaces in recent years. These products include anything from software to textiles to electronics to spare parts to cosmetics to household goods to food.

Original products that are offered under brand names are imitated in product counterfeiting and the trade in counterfeit labels, packaging, and goods. For consumers, entrepreneurs, and traders in African countries, counterfeit goods are becoming problematic. These imitations typically consist of clones or altered products, labeling, and packaging. Unverified dealers produce, process, or provide counterfeit goods by illegally using the ideas and intellectual property of other businesses or people (African Community of Practice on Managing for Development Results, 2017).

The pharmaceutical industry is a complex one that involves numerous diverse players, including producers, national regulators, government departments, distributors, and others. It has been severely impacted by counterfeiting. Fake pharmaceuticals are becoming more and more of a concern nowadays, and the logistical chain from the supplier to the pharmacy is where the weakness comes in. These stakeholders must work collectively to develop the sector. According to Libby Baney et al. (2015), counterfeit pharmaceuticals are usually produced in unsafe settings, increasing the likelihood that contaminants will be mixed into the drug. In many cases, these contaminants include toxic substances like floor wax, chalk, boric acid, road tar, paint, etc. Additionally, counterfeit drugs frequently lack the proper concentration of the active ingredient. In the end, this might cause severe reactions or even death.

Many entities are tasked with protecting pharmaceutical consumers, including governments and pharmaceutical companies. To further analyze this problem and find solutions, a joint global effort is required to safeguard the global supply chain, expand the capacity for quality control, and enhance surveillance.

According to a statistical model created by the London School of Hygiene and Tropical Medicine (2017), fraudulent antimalarial medications are probably responsible for up to 158,000 annual malaria deaths in Africa south of the Sahara. These drugs have significant risks for patients and their families, frequently resulting in severe damage that spirals over time into financial difficulty and, ultimately, death. The threats that counterfeit drugs pose to the world's public health have increased, according to Tim K. Mackey (2018) despite the industry having already benefited from technological advancements that should ideally stop the spread of fakes. The use and production of counterfeit medications surged by 122% between 2005 and 2010. One in ten medicines supplied in developing nations, according to (Justin D. Evans,2018), are fake; they either have harmful impurities left over from the manufacturing process or improper dosages of the active ingredients. Ozawa et al. (2019) account that according to a recent meta-analysis, 19.1% of all antimalarials tested in low-and-middle-income countries (LMICs), were substandard or falsified. Furthermore, The Organization for Economic Cooperation and Development (OECD), (2008) estimates that the East African Community (EAC) loses over US$500 million in tax revenue annually due to counterfeiting. Kenyan manufacturers are said to be losing up to 40% of their market share to counterfeiters, according to a 2012 research on illegal trade in Kenya by the Kenya Association of Manufacturers (KAM).

Tim K. Mackey (2018) remarks that the inability to ensure the integrity and safety of pharmaceutical companies' global supply chains is a major contributing factor to the proliferation of counterfeit medications. According to Deloitte (2017) the supply chain's information traceability is significantly hampered by the difficulty of sharing information across many stakeholders. Additionally, tracking and linking information to material without bias becomes difficult due to the intricacy of stakeholder interactions. Due to a lack of secure sharing and the fact that information is split across numerous stakeholders, stakeholders can experience difficulty accessing information effectively. According to Towett Ngetich (2021) access to medical product data (through efficient tracking and tracing of medication along its full supply chain cycle) could help prevent incidents like these and further reveal the supply networks and entrants of counterfeit medical items. The existing solutions have struggled to keep up. They include dated methods like barcoding and serialization as well as new advances that aim to enhance pharmacovigilance and post-marketing surveillance of drugs. However, they don't appear to be well-equipped to handle the issue alone. According to a Ministry of Health study (2020) in Kenya, the traceability of health products and technologies (HPTs) throughout the public health supply chain is now carried out by actual visits to service delivery sites, thorough reviews, and reconciliations of documentation, and comparisons of issue data with consumption data. Such audits take a lot of time and resources. For instance, the Kenya Medical Supplies Authority's (KEMSA) Logistics Management Information System (LMIS) lacks real-time stock visibility while in transit. This presents a chance for the market to be flooded with fake or inferior pharmaceuticals.

1.2 Problem Statement
As discussed above, it is clear that counterfeit drugs pose a great challenge in the pharmaceutical supply chain. This negatively impacts the supply chain’s stakeholders from the manufacturers down to the end consumer and hence there is a pronounced need to combat this issue. According to Christo Hall (2012) as counterfeiters' methods improve, there is a constant need for highly effective anti-counterfeit technology. Markers that are clearly visible on a drug's packaging have traditionally been used to distinguish between genuine and counterfeit ones, however, holograms and other distinguishing features that are affixed to the blister foil, film, or paper substrates of the package are often accurately imitated. Genuine and fraudulent products can appear the same to the untrained eye.

Current technologies presented have not been able to make a significant impact in the fight against counterfeit drugs due to the non-immutable nature of the data stored in the systems which in turn raises the question of the accuracy of data present for auditing purposes. This implies that the traceability of the drugs is therefore affected.

1.3 Research questions
1. What are the requirements for a blockchain solution to tackle the issue of drug counterfeiting?

2. What are the features in consortium blockchain that make it best suited for a pharmaceutical supply chain?

3. How does a blockchain solution contribute to data veracity and traceability?

1.4 Objectives
Main Objective.

Build a blockchain network that can accept accurate tracking data for monitoring drug commodity movement history through a web application.

Specific Objectives.

1. Investigate the current technologies used to combat counterfeit drugs in the pharmaceutical industry and the processes involved in its supply chain.

2. Build a consortium blockchain on hyperledger fabric that can be integrated with other technologies.

3. Validate the system.

1.5  Scope
Inasmuch as counterfeit drugs have become a complex problem around the globe, the technologies used to a large extent have been used independently. This study aims to design and implement a tool that can combine two technologies e.g., IoT and Blockchain - to enable effective tracking and tracing in the pharmaceutical supply chain.
The study will cover the pharmaceutical stakeholders namely; the manufacturer, the distributor, the wholesaler, and the regulatory authority. The stakeholders covered are based in Nairobi county, Kenya. The sample population will be selected from each stakeholder group for data collection. This study only covers one-way supply and not returns or recalls of assets. The project is to be carried out within a time frame of 3 months or less.

1.6 Assumptions
One presumption is that, in the end, consumers will be willing to check the legitimacy of drug items and report any irregularities they may observe. To do this, it will be necessary to raise awareness, provide training, and a commitment to establish a supply chain environment where genuine medications are available.

Another is that the end consumer is well aware of the trusted outlets for medication and the track and trace process, and is also informed of the government website through which to report cases of counterfeits.

1.7 Significance
The aim of this study is to make sure that pharmaceutical orders can verify that genuine medications are delivered to an authorised personnel at each transfer point, ensure compliance with the right requirements for transportation and asset transfer, and make sure that a mutually verified ledger of all transactions is always available. This refers to each drug's origin along the supply chain. The manufacturers and users of the medications would stand to gain the most if the provenance of every drug in the chain could be established.

For the manufacturer, the elimination of counterfeit drugs from the supply chain would ensure that their brand names' reputations are upheld, and they would not have to face unfair competition. Apart from manufacturing costs, manufacturers also incur other costs in advertising, remuneration of employees, taxes, etc. Counterfeiters, on the other hand, incur very minimal costs but end up taking profit on legitimate business investments (AfCoP, 2017). The end consumer would benefit greatly as well since the elimination of counterfeit drugs would ensure that if a patient acquires their prescription medication from a pharmacy or hospital that is supplied with drugs from the supply chain, the drugs would be authentic. By providing consumers with genuine medication, their exposure to dangerous or ineffective products would be non-existent and as a result, complications resulting from falsified medicines would be removed.

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