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Introduction
Counterfeiting in the pharmaceutical supply chain poses a serious threat to public health and
erodes confidence in the pharmaceutical industry. The system also presents weaknesses as
fragmentation and multiple intermediate stages in the supply chain enhance counterfeiter’s
chances of introducing fake medicines. Additionally, most of the secondary suppliers are
unregulated and the extensive network of wholesalers and distributors make tracking of the fake
drugs hard. For instance, the United States comprises several large wholesalers who distribute
majority of the drugs, while the rest is taken over by about 7000 secondary wholesalers (
Yakubu,
2020
). Nevertheless, the secondary wholesalers distribute cheap knock-offs of the medicines
from many sources. The drug also passes through various hands where other drugs are
introduced into the market making these drugs counterfeit.
In addition, it gets worse when pharmaceutical products are taken to other areas that involve so
many middlemen which includes suppliers, dealers, and transporters. The distribution process
presents ample opportunities for counterfeiting since it makes it difficult to track and identify the
producers by repackaging the drugs (UNICRI, 2012). This is attributed to the fragmented nature
of the pharmaceutical supply chain which involves several transactions and hence it is quite hard
to have efficient systems for combating counterfeits. The nature of transport makes the situation
even worse. Small shipments are preferred by counterfeiters, especially when using courier
services and mails. Of the global seizures that were related to counterfeit products between 2014
and 2016 emphasizes the importance of small parcels in the illegal trade of pharmaceuticals
(
Uddin, 2021
). They appeal in small shipments, which minimize the possibility of getting
discovered and the amount of seizure. This is the trend that has seen more rise with e-commerce.
Small parcels which are the best and unnoticeable way of transporting counterfeit
pharmaceuticals. However, the advent of e-commerce has made the above challenges more
pronounced because a growing number of small shipments are now coming into the
market. Legitimate trade is on the upswing while many small consignments make the job harder
for the customs agency (OECD/EUIPO, 2018b). Customs are faced with a dilemma – how
thoroughly to conduct inspections of legitimate imports, yet the need for speed? Small-volume
trading also means that there is usually no information available through ship manifests, thus, it
is also very difficult for customs to perform any meaningful risk assessments.
The distribution has also evolved with internet being part of the internet sales channels. It has
been a major problem with regards to online pharmacies running on the dark and surface
web. Counterfeiters find the internet to be an appealing arena because it is anonymous and offers
a worldwide audience. They take advantage of increasing online drug purchases where
consumers are enticed by claims of cheaper drugs, convenience and avoiding consultations by
doctors (
Monk, 2021
). With the birth of the internet, counterfeiters now have wide ranging reach
spanning different platforms such as social networks. With the increased direct solicitations
through emails and online advertisement, it becomes even harder to fight counterfeit
medicaments (EAASM, 2008). Criminal groups have seized the opportunity with the use of the
Internet for marketing and sale of fake drugs. The prevalence of counterfeit medicines worldwide
points out that online pharmaceutical trade should be handled with extreme caution. Free trade
zones (FTZs) initially were created to facilitate traffic and transit of goods; however, they have
evolved into hot spots of illegal activities such as the trade of counterfeit medications
(
Amankwah-Amoah, 2022
). Criminals involved in counterfeiting, smuggling and money
laundering consider FTZ as lightly regulated, hence safe for their operations (OECD/EUIPO
2018a). For illustration, Oyster Corporation and similar complex cases where several countries’
trade regulations should converge point out difficulties of FTZs regulation of the
pharmaceuticals trade (ICC, 2013). The issue of fake drugs on the drug supply chain and how a
trace and trace system based on blockchain can prevent it (
Ombler, 2021
). In this context, the
goal would be to determine the effectiveness of the system in curtailing counterfeit drugs, the
effects of changes in the viewpoints and trust of different stakeholders as well as the costs
involved and compare this with the losses caused by fake drugs. The research is more elaborate
on the intricacies of the pharmaceutical supply chain with a view to advising policymakers on
how to avoid health risks associated with fake drugs and boost the industry.
2. Aims and Objectives:
Evaluate the effectiveness of a blockchain track-and-trace system in reducing
pharmaceutical counterfeiting.
Examine changes in stakeholder perception and trust after system implementation.
Assess the cost-effectiveness of the blockchain solution compared to losses from
counterfeiting.
3. Literature Review:
3.1 Definition of Key Constructs:
Pharmaceutical Counterfeiting:
This includes the unlawful and fraudulent practice of manufacturing and distributing fake, poorly
done pharmaceutical products. The counterfeit drugs often look like the real one with similar
packaging, which jeopardize the public health and safety (
Liu, et al., 2021
). Duplication of
packaging, formulation, and appearance of original substances also constitutes the act of
counterfeiting. Such malpractice undermines medication effectiveness, patient health, and overall
drug industry integrity.
The growing occurrence of pharmaceutical counterfeiting is due to the globalization of supplies,
the increased complexity of distribution channels, and the technological advancements that have
made it possible to replicate these products (
Uddin, 2021
). This implies that innovative solutions
are needed to help in improving traceability, transparency, and authenticity within a
pharmaceutical supply chain.
Blockchain Technology
Cryptocurrencies were envisioned as a tool to establish a platform for blockchain technology that
later transformed different industries such as pharmaceutical. Essentially, blockchain is a
distributed ledger system that maintains all records across a network of computers in a secure,
transparent, and permanent manner (
Zakari, et al., 2022
).
In the context of the pharmaceutical supply chain, block chain could serve as a back bone
technology that would make an immutable record of every transaction or event related to any
pharmaceutical product. This interconnected chain of blocks constitutes the ledger that ensures
integrity, truth of records, and is secure (
Sarkar, 2023
). Smart contracts and cryptography
techniques solve the counterfeiting problem and provide a secure environment for drug
verification and tracking using the blockchain technology.
Stakeholder Trust in the Supply Chain:
Trust by stakeholders is one of the pillars of the network of relationships within the
pharmaceutical supply chain. This term suggests the confidence that all the parties involved in
the process as the manufacturers, distributors, regulators, health care providers as well as
consumers have with the supply chain process as far as its integrity and reliability is concerned
(
Sahoo, 2020
). Subsection in this respect, the issue of counterfeit drugs becomes highly
meaningful, bearing possible losses for people’s lives.
Transparent, accountable, and communicative measures are essential in fostering and
maintaining trust among stakeholders.” Break down of trust throughout the entire chain within
supply system has many consequences in terms of coordination, communication, and legal
compliance. It thus becomes essential to respond to stakeholders trust and incorporate it in
overall the pharmaceutical supply chain resilience and efficiency.
3.2 Assumed Relationships
Blockchain and Product Origin Authenticity
Product origin authenticity which includes among others block chain technology which is tamper
proof and decentralized (
Akhtar & Rizvi, 2021
). The records include the location and date of
production, supply chain exchanges, ownership details – hence the complete product history
could be traced and verified. This ensures that the information is accessible to any inquisitive
third party, including information on the origins of the product.
Traceability and Transparency:
Due to the decentralized and ineditible nature of the blockchain, it can be used as a reliable
location for storing crucial information. In other words, traceability and transparency in the
pharmaceutical chain. The blockchain records all the transactions associated with medicinal
products in production, distribution and consumption (
Sunny, 2020
). As a result, it creates an
uninterrupted chain of custody leading to a full-length view of what has occurred with the
product.
For instance, in the case of production of a pharmaceutical product, the details related to such
process like where and when it took place are securely recorded on the blockchain. The
following block records every exchange or transfer of ownership of the product while moving
through the supply chain. Up to this point, such traceability shows stakeholders the assurance
that they can authenticate the origin and validity of a product within each link on the supply line.
Tamper-Proof Information:
Blockchain technology is an immutable barrier against the widespread menace of counterfeit
drugs. This quality is crucial in determining the originality of product origin. Faking records,
making fake documents and trying to disguise their illegal activities is a common practice for
counterfeiters. The tamper-proof nature of the blockchain breaks these attempts and creates an
irresistible and uneditable record of the product’s journey through the supply chain (
Akhtar &
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Rizvi, 2021
). For instance, imagine a critical piece of information like the production area and
pharmaceutical date of medication is misrepresented. In a traditional system that is prone to
forgery and tampering, such erroneous information can easily get into the supply
chain. Nevertheless, if the data is safely stored on a blockchain, it becomes a difficult task to
alter it. Block chain is an architecture with a decentralized structure so that only all participants
of the network agree to a change in information and, therefore, a fraudulent intervention is
practically impossible (
Yadav, et al., 2021
). The security features ensure that the data cannot be
tampered with hence providing a high level of accuracy and confidence in the product origin
details. The integrity of information showing the provenance of pharmaceutical products is intact
despite being unattached or not affixed directly to such products. The most difficult to copy
information is tamper-proof information. Reliability in the entire of the drug supply chain. The
information about a drug product must be correct since during the movement through the
sophisticated supply chain, one needs to confirm that the product in question is genuine and
safe. Another vital leg to building a secure and transparent environment for pharmaceutics is
blockchain.
5.3. Tokenization of Physical Assets:
Blockchain-enabled tokenization for purposes of securing product origin authenticity of pharma
chains (Ferrara et al., 2021). Herein, means the transition of real physical pharmaceuticals into
digital unique tokens with lots of information on the original. This digital representation includes
aspects of all the processes of manufacturing and complicated logistic transactions ending up
with a very secure document.
However, it uses the combination of digital and physical tokens such as labels, barcodes or
RFID, which are joined by technology. These linkages form a chain that is as solid as the chain
of the physical drug product and its copy on the blockchain (Heines, et all, 2021). This is how
virtual and physical spaces integrate strongly, creating trustworthy and transparent system.
The process of tokenization of a digital equivalent of a pharmaceutical product assures that the
product stick in the blockchain’s circuitous pathway. An uninterrupted link functions as a
perpetual mark for the stakeholders to map the course the product moves with never before
experienced precision (
Blossey, 2019
). In addition, it serves as a powerful barrier against fake
products as having this evidence of being genuinely authentic is one indisputable proof.
However, tokenization goes much further than simple digitalization. It marks an era change in
how we conceive and verify physical products. Blockchain technology provides a unique way of
digitizing and securely packaging the whole journey of a product, bringing trust and
accountability even in the pharmaceutical supply chains.
5.4. Enhanced Security Against Fraud:
Pharmaceutical firms always face highly developed counterfeits. The other actors take advantage
of loopholes present in conventional supply chain structures. Blockchain as a modern solution
provides more robust fraud protection. The barrier is very high because of its cryptographic
foundations and consensus mechanism, which cannot be accessed or manipulated by unapproved
parties (
Peltier-Rivest
& Pacini, 2019
). Any effort to pass fake products or forgery of
information in a blockchain-based system will trigger alerts across the whole
network. Verification can also be automated by using smart contracts which are self-enforcing
contracts having coded rules. That is where stakeholders can take prompt corrective measures if
the discrepancies are detected. Such a proactive approach considerably narrows the window of
opportunity for counterfeiters.
5.5. Establishing Trust in the Pharmaceutical Supply Chain:
Blockchain technology’s transformative effect on product origin authenticity is crucial for
resuscitating confidence in the pharmaceutical supply chain. Historically, trust, which is crucial
in relations that exist among the parties involved including manufacturers, distributors,
regulators, and consumers has been a challenge due to issues like drug counterfeits and
information asymmetry (
Jamil, et al., 2019
). Therefore, the special characteristics of blockchain
provide a manifold remedy to the mentioned problems.
Shared Truth:
Blockchain, therefore, is an enabler of a commonly held truth between the involved
parties. Blockchain makes it possible to ensure that all authorized participants in the supply chain
have access to an identical, unchanged version of the same information, thus eliminating the
inconsistencies that commonly occur as a result of information asymmetry (Helo & Hao,
2019). Decentralization and distribution of the ledger do not allow to have full control of
information which leads to collectively understand whether the origin of a pharmaceutical
product could be traced back. It is this shared truth basis on which a more transparent and
collaborative pharmaceutical ecosystem is built.
Real-Time Verification:
The blockchain technology also has one of its strong selling points, which is its ability to verify
in a real-time. It is possible for stakeholders anywhere in the pharmaceutical supply chain to
confirm the authenticity of a product instantaneously (
Martinez-Rendon, et al., 2022
). In
addition, it is a fast verification process which creates deep confidence about genuine medicines
from the supply chain. This is because stakeholders are assured of current data concerning where
a given product originated hence, they make confident decisions.
Collaborative Security:
Blockchain remodels the paradigm of trust in the pharmaceutical industry. Unlike traditional
models where the trust is often entrusted in one authority, blockchain spreads the trust
throughout the network (
Patel, 2023
). Collaborative security model involves numerous parties
confirming transactions via consensus protocols. Such a decentralized approach reduces
tremendously the trustworthiness dependency on a single central authority.
Every participant forms an organic component of the security infrastructure, providing input into
the validation and verification process. The system could not be compromised unless every node
in the network agreed to it. Therefore, this would make it immune to fraud and unscrupulous
attacks. First, it increases the reliability of this supply chain and encourages all stakeholders to
trust that the system is enforced with collective caution.
Relationship Diagram
Traceability and Transparency
Tamper Proof Information
Tokenization of Physical Assets
Trust
4. Methodology
4.1 Research Philosophy and Approach: Positivist Orientation and Deductive Reasoning
For this study, the research philosophy adopted is aligned with positivism, whereby an objective
and empiric assessment of the effects of blockchain on supply chain dynamics is employed. As a
guiding philosophy, positivism emphasizes the view that knowledge can be generated from
systemic experiments and observations on phenomena (
French, 2022
). In this regard, such an
approach is especially significant for analyzing the impact of the technological intervention of
blockchain, where material, measurable results are necessary for drawing relevant conclusions.
Positivism supports a narrowed examination of empirical evidence on blockchain application in
supply chains for pharmaceuticals (
Bille and Hendriksen 2023
). An objectivity is focused to
bypass the subjective readings and the biasness as much as possible to understand without doubt
the impact that blockchain has on product origin authenticity as well as stakeholders’ trust.
The application of deductive reasoning compliments the positivist philosophy. This is an
aspirational deductive approach which seeks to arrive at verifiable results based on logical
reasoning deducted from existing theories and hypotheses. This process involves moving from
general premises to specific predictions, aligning with the overarching goal of the research: to
investigate methodically, the causal links among blockchain adoption, product origin
authenticity, and trust.
The deductive approach will ensure that the research questions are well explored by following a
systematic manner. Specific hypotheses derived from previously existing theories can be utilized
to provide a framework for testing and substantiating the effect of blockchain in pharmaceutical
supply chain. It is important to this research as it will provide the strong foundation on which the
systematic empirical data gathering will be based.
Block Chain Technology
Pharmaceutical Counterfeiting
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4.2 Research Design: Longitudinal Case Study for In-Depth Exploration
In order to thoroughly understand how blockchain is changing product origin authenticity, we
take a longitudinal case study approach (
Sundarakani, 2021
). This makes it possible for us to
explore the phenomenon in a deep manner over a relatively long time so as to be able to capture
subtle features, patterns and changes that could emerge while the technology is embedded in the
pharmaceutical supply chain. By concentrating on a particular case, we will follow and measure
how certain variables change in time thus having the possibility to see the causal relationships in
detail.
4.3 Data Collection: Blending Quantitative and Qualitative Insights
4.3.1 Quantitative Data:
The pre-implementation and post-implementation phases of a dual-
phase survey approach will yield quantitative insights (
Hailu, 2021
). The pre-implementation
survey will provide a baseline insight into existing issues and perceptions, and the post-
implementation survey will record the quantitative effect of blockchain implementation. This
includes administrating surveys to manufacturers, distributors, regulators, as well as consumers
involved in the process of manufacturing and consuming these products. For this study, 100
people would be chosen.
4.3.2 Qualitative Data:
Additionally, the qualitative data will be acquired through interviews
with the major players among stakeholders. The purpose of this interview is to uncover subtle
views, experiences, and challenges regarding blockchain application to pharma supply
chain. Such stakeholders may include supply chain managers, technology experts, regulatory
authorities, among other actors.
Measurement Variables
Blockchain Implementation Metrics:
For the purpose of evaluating the effect of blockchain on the pharmaceutical supply chain, the
sub-construct of Blockchain Implementation Metrics is determining the degree and depth of
implementation of the blockchain technology in the industry (
Sabbagh, et al., 2021
). This
therefore involves identifying particular characters which are used, such as traceability, digital
signatures, and tokenization. This measure endeavours to quantify the extent to which an
industry uses these types of digital ledgers by periodically assessing the technology imprint.
Product Origin Authenticity:
Product Origin Authenticity, looks at how efficient blockchain can be in tracing the origin of
pharmaceuticals. This implies thorough verification of authenticity and validity of data on
essential issues like the place of manufacture, date and records of supply chain transaction
(
Akhtar & Rizvi, 2021
). This metric digs deep into details of the recorded data to understand the
extent by which blockchain enhances the trustworthiness of product- related information
especially counterfeits.
Stakeholder Trust:
It is important to understand the trust dynamics among manufacturers, distributors, regulators,
and consumers as a significant variable to quantify stakeholder trust in the pharmaceutical supply
chain. This metric aims at capturing the holistic influence of blockchain technology on
relationships in the industry by quantifying levels of trust involved (
Montecchi, 2019
). Trust
relationships between stakeholders need to be understood so as to examine the wider societal
implications of the technology.
Counterfeit Incidents:
Counterfeit Incidents is a variable which implies tracking of the occurrence of the counterfeit
events in the pharmacy supply chain. However, it also incorporates cross-checking the number of
fake events with the extent of blockchain usage (
Akhtar & Rizvi, 2021
). The authors analyze the
relationships between introducing blockchain technology against counterfeits and their practice
implications on to risks to product’s integrity through this variable.
Supply Chain Efficiency:
Blockchain, and its influence on Supply Chain efficiency” is one variable measuring the
enhanced supply chain efficiency within the pharmacy. This means identifying any barriers from
blockchain adoption as well as improvements in supply chain processes. Efficiency changes’
measurements can reveal how blockchain reshapes flows of information and commodities and
inform this information further down.
Cost-Benefit Analysis:
The Cost-Benefit Analysis variable addresses a quantitative cost analysis that weights against the
benefit value. This is an attempt to take into account all the economic implications of blockchain
by systematically evaluating them (Hassani & et al., 2020). Stakeholders must understand the
cost-benefit profile to be able to decide on the viability of using blockchain in the pharmaceutical
supply chain.
Regulatory Compliance:
On the variables for regulatory compliance, its impact on blockchain implementation in the
pharmaceutical supply chain. Such measures include the extent to which block technology
enhances the regulatory compliance in the industry, and this provides a broader perspective on
the regulatory aspects of distributed and tamper-proof systems.
Stakeholder Perception:
A qualitative study named stakeholder perception provides indepth interviews to uncover
perceptions about trust, authenticity and the overall effect of blockchain technology on the
pharmaceutical supply chain. This variable is intended to supplement quantitative findings with
detailed qualitative insights into stakeholders’ perceptions of how the application of blockchain
can be interpreted and responded to by industry players.
4.4 Data Analysis: Harnessing the Power of Statistics and Qualitative Content Analysis
4.4.1 Quantitative Analysis:
There will be stringent and detailed statistical analysis of the
quantitative data. The descriptive statistics will give an overview and, inferential statistics such
as the regression will be used to test specific hypotheses (
Hassani, et al., 2020
). Such approach
builds strong understanding of the quantitative impact that blockchain have on authenticity of the
product origin and stakeholder confidence.
4.4.2 Qualitative Analysis:
Content analysis of qualitative data collected through interviews. This
involves grouping and explaining the big picture and patterns in the interviews. The qualitative
insights would give a clearer picture of the contextual issues, challenges and opportunities in
implementing blockchain in the pharmaceutical supply chains.
4.5 Research Ethics: Safeguarding Integrity and Confidentiality
The provision of research ethics is a part of our work and it represents the commitment that we
have for protecting the integrity of all participants in it. This is a key pillar towards guaranteeing
the reliability and authenticity of the findings.
Moreover, confidentiality will be of the highest order and strict steps will be employed to ensure
that participants remain private. During presentation all data will be anonymized in order to
avoid personal identification of participants. It is paramount to preserve privacy and
confidentiality of those making contribution to this research by using this anonymization
process. Therefore, the research team tries to create a friendly atmosphere for the participants to
be comfortable in expressing their opinions regarding their experiences.
The obtaining of the informed consent will be comprehensive and transparent. The involvement
of participants in the research will be clearly discussed, including the objectives, techniques
used, and possible consequences (
Obando, n.d
). This will allow the participants to take
autonomous decision of their participation in the program and ensure respect for their
rights. Moreover, the informed consent process will highlight the voluntary nature of
participation, assuring participants that they may withdraw at any time without suffering negative
consequences.
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Our ethical framework is guided by voluntariness in participation. Participants will
autonomously choose whether and will not be penalized after dropping out from the
study. Upholding of voluntary nature helps to upkeep ethical standards and shows concern for
participants’ righteousness during the research period.
5. Research Plan
Research Phase
Timeframe
1. Literature Review
Weeks 1-3
2. Survey Design & Ethics Approval
Weeks 4-6
3. Survey Distribution
Weeks 7-10
4. Data Collection & Interviews
Weeks 11-14
5. Data Analysis
Weeks 15-18
6. Results Interpretation
Weeks 19-20
7. Report Writing
Weeks 21-24
8. Review and Editing
Weeks 25-26
9. Submission
Week 27
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