The development of blockchain technology is poised to revolutionise the pharmaceutical supply chain in Southeast Asia, enhancing drug safety by ensuring no one receives counterfeit or contaminated medication. The pharma market is on target to reach USD 14.29 billion in 2024, but it could grow even further as new tech revolutionises the medical sector.
According to professional services firm Deloitte & Touche, the National Association of Manufacturers (NAM) Manufacturers’ Outlook Survey revealed that in the 4th quarter (Q4) of 2023, 86.2% of respondents had worked to de-risk their supply chains in the previous two years. However, they are now prioritising a resilient yet efficient supply chain.
Can AI help the pharmaceutical industry in Southeast Asia develop better drugs?
Leading medications look set to garner over USD 9 billion each in 2024, with drugs like Keytruda (Cancer) and Ozempic (Diabetes and weight loss) ahead of others at USD 27.2 billion and USD 16.1 billion, respectively. The pharmaceutical market revenue generated in 2023 was USD 12.74 billion, covering segments like Oncology, Vaccines, Immunosuppressants, Anti-Hypertensive, Multiple Sclerosis, Anti-Diabetes, Dermatological, Bronchodilators, and Anticoagulants, among others.
Blockchain adoption in Southeast Asia’s pharmaceutical industry
Southeast Asia is a pharmerging market, where demand for pharmaceutical products is already high, is snowballing, and has support from government initiatives and investments. Singapore is the most developed pharma market in the region, attracting substantial foreign investment funds and being a research and development (R&D) base for large pharmaceutical companies like Pfizer.
Blockchain is helping the pharmaceutical industry globally and in the Association of Southeast Nations (ASEAN) in several ways:
- Bringing extensive government support: Leaders in ASEAN are looking to bring in universal healthcare coverage (UHC), and they can use these solutions to benefit the people. For example, the Biomedical Science (BMS) initiative was launched in 2000, which led to the construction of the major R&D centre Biopolis and attracted funding from abroad.
- Improving traceability: Blockchain technology, with its ability to save vital, unchangeable data, plays a crucial role in improving traceability in the pharmaceutical supply chain. This step helps supply chains enhance traceability, reduce fraud, and track drugs from manufacturer to patient to ensure authenticity. Inventory traceability also makes identifying expired drugs or delays in replenishing much-needed prescriptions possible.
- Enhancing patient safety: The adoption of blockchain in medical practice can significantly enhance patient safety. By securely storing electronic health records (EHR), patients can access their data at any moment, even when visiting a different hospital. This reduces the risk of being prescribed the wrong medication, instilling a sense of confidence in the safety of medical practices.
- Improving compliance with regulatory initiatives: Statista said Southeast Asia adopted the ASEAN Pharmaceutical Regulatory Policy (APRP) in 2022. The APRP laid out the framework for further integrating the region’s pharmaceutical market, seeking to harmonise regional regulations and safety standards. It also has a knock-on effect on startups by opening up the opportunity to attract international players and receive funding.
Challenges facing ASEAN in pharmaceutical supply chain operations
Here are a few obstacles that pharma ecosystem stakeholders are dealing with:
- Technological integration delays: One of the main challenges facing the region is technological integration difficulties. Transitioning from traditional to new-age tech is a struggle. Additionally, disruptive technologies often have high implementation costs, which may rule them out for many businesses, hospitals, and pharmacies.
Secondly, there is a tech talent shortage in ASEAN, delaying the implementation of timely solutions for safely transporting untainted medication where needed.
- Need for cross-border regulatory harmonisation: The lack of a unified blockchain regulatory framework in ASEAN poses a significant challenge. If cross-border pharmaceutical supplies occur, supply chain issues resolved in one country may still cause problems in another.
This highlights the need for cross-border regulatory harmonisation to ensure seamless regional operations and compliance.
- Infrastructure limitations: Each country in Southeast Asia suffers from infrastructure limitations. For example, disruptions caused by power cuts and failures to power backup generators due to the high cost of fuel.
- Data privacy and security: Customer data is at risk when collecting and analysing data. While blockchain saves information accurately, more steps must be taken to guarantee protection from supply chain online attacks.
- Sustainability concerns: Transporting medications globally causes a lot of pollution. Thus, stakeholders should support sustainable supply chain solutions like green manufacturing, transit route optimisation, recyclable packaging, waste management, and using blockchain for carbon footprint tracking.
Transforming ASEAN’s pharmaceutical sector with blockchain technology
Blockchain technology can transform the pharmaceutical sector in ASEAN. Developing drug databases to identify medication shortages and reduce return rates through detailed product descriptions can streamline the ecosystem and remove trade uncertainties. This inspires hope for a future where technology can solve geopolitical problems, such as Yemen’s blockage of the Red Sea, and make the pharmaceutical sector more efficient and consumer-friendly.
The future is tech-integrated, and blockchain will play a significant role in the pharmaceutical supply chain by ensuring drug safety in Southeast Asia. Addressing the factors preventing consumers from adopting healthtech solutions like data privacy will make people more comfortable using medical technology to enhance their quality of life and hospital experiences.