SAP Announces Blockchain enabled Solution to Eliminate Counterfeit Drugs

SAP recently announced the general availability of a blockchain-technology based SAP Information Collaboration Hub for Life Sciences.

The newly introduced SAP Information Collaboration Hub helps eliminate counterfeit products along the pharmaceutical supply chain with the help of blockchain technology.

As of November 2019, U.S. Drug Supply Chain Security Act (DSCSA) mandates wholesalers to verify prescription drugs that are returned and intended for resale. The compliance with DSCSA ensures that consumers are protected from fake, contaminated and stolen medication. This blockchain based solution from SAP helps customers to comply with DSCSA rules.

According to the announcement, the distributed Ledger technology enabled hub helps authenticate pharmaceutical packaging returned from hospitals and pharmacies to wholesalers before products are resold. It further states that U.S. wholesalers encounter nearly 60 million returns annually, accounting for an estimated US$7 billion.

Executive Opinion

Senior director, Global Secure Supply Chain, AmerisourceBergen Corporation, Jeffery Denton, said, “Blockchain is driving a new breed of enterprise applications that could drastically improve cooperation for wholesale distribution. The blockchain-based solution from SAP provides the best opportunity to fully satisfy our need to be interoperable with our trading partners and their solutions as well as to remain compliant with the U.S. DSCSA.”

Chief product owner, SAP for Life Sciences solution portfolio, SAP SE, Dr. Oliver Nuernberg, said, “This blockchain product supports the industry’s need for an immutable and shared ledger, avoiding many complex integrations. With this product, we are offering a scalable and secure solution to pharmaceutical manufacturers and U.S. wholesalers to comply with the upcoming regulatory requirements for verification.”

Benefits of SAP Information Collaboration Hub

A recent report from PwC titled "Fighting counterfeit pharmaceuticals & New defenses for an underestimated — and growing — menace" noted that counterfeit pharmaceuticals are the most lucrative sector of the global trade in illegally copied goods with sales ranging from €150 billion to €200 billion (US$163 billion to $217 billion) per year, according to industry estimates. Fraudulent drugs harm or kill millions around the world and inflict serious damage on the brand names and bottom lines of major pharmaceutical manufacturers.

The blockchain enabled SAP Information Collaboration Hub allows customers to verify the product code, lot, expiration date and a unique serial number embedded in the barcode against manufacturers’ data stored in the blockchain.

AmerisourceBergen, Boehringer Ingelheim AG & Co. KG, GlaxoSmithKline plc and Merck Sharp & Dohme, among others have participated in developing this software, SAP said.

SAP has been supporting customers in different industries with the adoption of blockchain technology and also started global blockchain consortium with industry players such as A³ from Airbus, Amkor, FLEX, Hewlett Packard Enterprise, Intel Corporation, UPS, and SAP. In 2018, SAP Cloud Platform launched its blockchain as a service to enable enterprises to easily build and extend business solutions with blockchain technologies, such as Hyperledger Fabric and MultiChain.