How New Technology Fights Counterfeit Medicine Fraud

Technology continues to influence our lives, our health, and the business of healthcare in so many ways. Each time a new and disruptive technology transitions from skepticism to mainstream business adoption, the possibilities of adapting that technology to achieve better, faster, or safer results for patients and healthcares teams becomes a carefully studied subject. 

In an industry plagued with a series of never-ending problems, how can technology be used to solve healthcare problems? How can a technology like “blockchain” be used to solve a problem like counterfeit medication? 


Relying largely on imperfect supply chains and imperfect supply chain data, counterfeit medication is unfortunately far too common, as a global healthcare issue which sees the wrong people profit and the right people receive severely-compromised health care. 

“Counterfeit medicine is fake medicine. It may be contaminated or contain the wrong or no active ingredient. They could have the right active ingredient but at the wrong dose. Counterfeit drugs are illegal and may be harmful to your health.” [1]

So how big is the problem? And is it really worth solving? 

  • 100% of therapeutic industries are affected by counterfeit medicines (WHO)
  • $4.4 billion is the estimated value of counterfeit pharmaceuticals traded worldwide [2]
  • 96% of all global online pharmacies are operating illegally in some capacity [3]
  • 96% of all seized counterfeit pharmaceuticals between 2014-2016 were bought on the internet and delivered by post or courier services [2]
  • 10% of all drugs distributed in low and middle-income countries are fake [4]


Certainly the worst part about our counterfeit drug problems is that, ultimately, it’s killing us! Everyday somebody swallows a pillow that does not work or has perhaps some substitutes hazardous for human health. Printer ink and arsenic are examples of elements unfortunately found in daily, consumable medications. 

The poorest countries with no proper supervision and with the high demand for medicine unfortunately suffer the most. The latest reports suggest “up to 72,000 childhood pneumonia deaths can be attributed to the use of substandard and falsified antibiotics if there is reduced antibiotic activity. This increases up to 169,000 deaths if substandard and falsified antibiotics have no activity.” [2] Hundreds of thousands of lives would be saved if medications and cure were simply ‘genuine.’ Hundreds of thousands of lives…These numbers are beyond imagination.


Pharmaceutical supply chains are very vast and have many players. Some drugs or active medicinal components moved through supply chains today are imported from one country to another, lacking the surveillance, traceability and data to confidently acknowledge where they came from, and precisely what’s inside the pill bottle itself. 

The issues of supply chain visibility as it relates to counterfeit medication is not just an issue in developing worlds; it’s officially a global issue! In established countries, approximately 1% of medication is considered ‘fake,’ whereas in less-developed countries, closer to 10% of all medications is potentially ineffective or dangerous. 


The Pangea operation, aimed to fight medical criminals, has been carried out by the World Health Organization (WHO) and INTERPOL since 2008. More than 100 countries participate today, thousands of medical devices worth hundreds of millions of dollars has been seized, and tens of thousands of websites have been permanently shut down [2]. Not a bad start. 

Positive steps aside, the main step being taken is related to the improvement of supply chain security: tougher import rules, unique identifiers, stronger record-keeping requirements, online pharmacy authentication… Smarter supply chains should help to prevent the substandard and falsified medical products appearing on the market. This is precisely where technology is helping, will continue to help, and perhaps were particular technologies such as blockchain will fully flourish. 


IoT, Blockchain and AI are the latest trends in digital transformation. They have proven they can help us solve a lot of big business problems, including us ridding the world from counterfeit meds. 

Misha Hanin, Founder & CEO of DeepDive Technology Group often reflects on the “stackable nature” of new & disruptive technology; it’s often possible to create a winning solution involving IoT, blockchain and AI at once.

Blockchain – particularly well-suited for it’s features of transparency, traceability, refutability and trust.

IoT – particularly well-suited to optimize the speed, efficiency & collection of data.

Pair IoT and Blockchain together in the supply chain universe and it’s quickly possible to see a plastic medication bottle flow through a warehouse assembly line, be time-stamped, photographed & digitally recorded from an IoT device, written to a refutable, immutable blockchain ledger that’s shared up and down the supply chain vertical to provide transparency, authenticity, and decision-making support to all stakeholders involved. 

If blockchain brings visibility…if IoT brings automation…if the internet brings data…technology can certainly solve today’s problem of counterfeit meds. 

This system (proposed above) would use unique cryptographic identifiers to track and confirm information (they can be different, i.e. QR or barcode scanners). These identifiers can be put on each individual item or in batch. To manage asset provenance, only verified medicine should be registered on the blockchain. Entering assets – from physical pills to medical equipment – at the very beginning of the production process would allow supply chain stakeholders to track the product at each and every stage as data is recorded. Then, if any pill or sachet, bottle or needle is NOT found on the immutable online ledger, it will be questioned, considered as counterfeit, and removed from the supply chain completely. 

Artificial Intelligence could be used to detect whole production batches of counterfeit products or meds. Programmed to analyse the characteristics of the particular product or brand, AI will find fake assets and help us rid them from the internet. It could be as simple as training an image recognition tool to identify the characteristics of a real pill or bottle vs a fake pill or bottle…with greater speed AND accuracy as compared to humans can. 

If we are able to check the authenticity of drugs, we are able to prevent them from getting into people’s hands and thus the technology can literally save human life.Implementation becomes the challenging part. 

“Implementing disruptive technology is no 1-time event. It’s a never-ending cycle of studying, building, validating and operating,” shares Misha. “Adopting new & disruptive technology like IoT, blockchain & AI begins with understanding the opportunity or pain, creating a precise plan of HOW the new technology can be implemented and integrated into an existing enterprise process securely & scalably, followed by experimenting, analyzing and continuously improving. It really never stops.”


Although we spoke specifically of fake-drugs, forgery affects ALL existing supply chains. Using the method described above, and the innovative technologies outlined above, we can improve the whole supply chain management system, and change the rules of modern trade with only honest players on the field, throwing fraudsters overboard.

Fighting counterfeit is not the only burning use-case for new technologies like AI, IoT and Blockchain – to be used individually or in concert. In healthcare alone, disruptive technologies can be applied for improving patient data management, clinical trials, billing, insurance, emergency healthcare, and so much more. With great effectiveness, new technology can be used in just about any industry imaginable. The art-of-possibility is endless.  


[1] U.S. Food And Drug Administration, Counterfeit Medicine,,be%20harmful%20to%20your%20health 

[2] EUIPO, Trade in Counterfeit Pharmaceutical Products, 2020

[3] LegitScript, January 2016, The Internet Pharmacy Market in 2016 Trends, Challenges, and Opportunities,

[4] WHO Global Surveillance and Monitoring System for substandard and falsified medical products,

[5] United Nations Office on Drugs and Crime, COVID-19-related Trafficking of Medical Products as a Threat to Public Health