Using blockchain against counterfeit drugs
Many of the drugs in circulation in Africa are counterfeits. That can cost lives. But now, with support from a GIZ advisor, a start-up in the German city of Chemnitz has developed a code to tackle the problem of counterfeit drugs in Côte d’Ivoire.
The World Health Organization (WHO) estimates that around 10 per cent of all drugs sold in developing countries and emerging economies are counterfeit and have no active ingredients. This figure is likely to be even higher in some parts of Africa. Côte d’Ivoire is one of the countries where counterfeiting is a problem: for financial reasons, many Ivorians have to obtain their drugs on local markets, where counterfeits circulate virtually unchecked. This can have very serious consequences and even cost lives: around 116,000 people across Africa die of malaria each year because they have taken counterfeit drugs.
Cracking the code: support from German business
authentic.network, a start-up based in the German city of Chemnitz, has developed a solution based on blockchain technology. Blockchain is a database comprising a chain of data blocks. Conventional databases are stored in one central location, but blockchain’s data chains are stored on a series of networked computers and controlled, validated and administered decentrally. The same data chain with the same information is stored on each computer. The digital code developed by authentic.network makes use of the advantages of this technology. The code takes the form of a green tick and is affixed to the drugs. Pharmaceuticals companies and importers can label their products with the code; consumers then use a free app to scan the code with their smartphone. Within a few seconds, the app reveals whether the product is a genuine drug or a counterfeit. The technology is currently being trialled with anti-malaria drugs in cooperation with the Côte d’Ivoire Ministry of Health and industry associations.
Bridge builders and local sparring partners
The project is supported by Rene Megela in the port city of Abidjan. The business studies graduate works for the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, which is implementing the project on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). As a Business Scout, Megela supports cooperation arrangements between Côte d’Ivoire and German companies.
As he explains, ‘What is important is to find the right local partner for companies. We work together to ensure that market entry is as smooth as possible.’ However, he also finds he is approached with a range of other questions, such as how to register a business locally, how to retrieve containers from the port or where to find a surveyor and a reliable notary. ‘Knowing exactly this sort of detailed information is really valuable,’ says Megela, ‘and is key to whether a company will be successful locally.’
Long-term involvement by the private sector
Since GIZ was founded in 2011, Business Scouts have promoted long-term and responsible involvement by the private sector in developing countries and emerging economies. Based in around 40 countries worldwide, these GIZ experts advise German, European and local companies on the opportunities for promotion, financing and collaboration available through German development cooperation, facilitate networking with potential partners and initiate cooperation projects. Business Scouts in partner countries are either based in GIZ country offices or work within German Chambers of Commerce Abroad (AHKs) and Delegations of German Industry and Commerce. They have an important liaison function between private sector business, foreign trade promotion and development cooperation. The objective is that all parties benefit – and the Chemnitz start-up illustrates that perfectly.
Potential for other sectors and countries
The success of ‘his’ German companies in Côte d’Ivoire has encouraged Rene Megela: ‘What authentic.network are doing is a hot topic,’ he says; ‘the trade in counterfeit drugs is a multi-million business in Africa.’ But now, he adds, digital technology can help save lives.
And the Chemnitz technology is not limited to malaria drugs, so the roll-out is just getting under way. The project has also, for example, launched cooperation arrangements with a German consortium to manufacture rapid COVID-19 tests in Côte d’Ivoire and to label them with a code to prove their authenticity.
Meanwhile, Megela is already working with authentic.network on rolling the technology out in other sectors and in other African countries, including Niger and Rwanda.