Blockchain enthusiast developer and writer. My telegram: ksshilov

The Fake Drugs Market is Over $30 Billion. Are Your Supplements and Vitamins Real?

The industry of pharmaceuticals is one of the largest in the world — its global revenue was $1.2 billion in 2018 and it continues to grow, since the growing human population is finding new ways to increase the quantity of their consumption by supplementing their diet with processed nutrients extracted from food sources. By 2023, the global revenue of medicine, vitamins, and supplements is projected to reach $7.35 billion.

But the problem is that it is pretty much an unregulated market. When someone buys a pill, there’s a high chance that it could be a fake. Sadly, statistics say that there are tons of fake and ineffective products on the market, sold, and given to unsuspecting people.

We can remember the recent scandal in China when thousands of faulty vaccines, produced by Changchun Changsheng, were given to children, which even caused deaths in some cases.

Officials say that in total, up to 500,000 of Changchun Changsheng’s DTaP vaccines may not have met the proper standards. Another case happened recently when a private hospital was closed dozen; dozens of patients were given fake HPV vaccines. This, too, happened in China.

But this problem isn’t unique to China, it’s widespread on a global scale. Doctors say that fake drugs kill more than 250,000 children a year. They are everywhere, and something must be done about it. But we already know the solution; a blockchain-based solution, such as, say MidasCaps, Paragon, or a VeChain.

But first, we have to dive deeper into the problem.

Origin of the problem

The fake drugs market is an enormous one — it’s worth more than $30 billion! The vitamin and supplement market is just a portion of that worth, but it sends 23,000 people to the emergency room every year. Medical marijuana, another minority (for now) in this market, was found to contain mold and diverse bacteria that may cause harm to those who inhale it — and nobody even checks this!

At this moment, there’s no proper way to tell a genuine product apart from a fake one. Perhaps a “Certificate of Origin” could have helped, but in the current environment that can be faked, too.

The majority of these bad products come from countries such as India, China, or those in Africa. These developing countries exhibit poor quality control, and the absence of a strong legal system that punishes the manufacture of fake products attracts many criminals and other bad actors to the medicine-related industries.

According to a report by the World Health Organization, 1 in every 10 medical products found in circulation in low- and middle-income countries are either fake or of poor quality.

When cartels and companies producing these bad products get caught, they face no severe consequences, only fines or minor sentences. Without counting the human factor, everyone in the supply chain can be bribed. It became a game with small losses and big wins for the fraudulent manufacturers.

No Human — No Problem

The obvious solution that should be used, that has already shown its effectiveness in handling the food supply chain, is the blockchain. Major companies like Walmart track their food via the blockchain, and it’s almost revolutionary — every container has its own tracking number, and its route from the manufacturer to a store can be checked in seconds.

Fake food, obviously, can’t have a genuine number in the blockchain.

So why can’t we implement this same technology when we’re dealing with various health-related products? Well, we actually can! The blockchain market can already offer us a lot of solutions for all the above-mentioned industries — tracking supply chains and issuing certificates of origin!

In this article we’ll look at MidasCaps, Paragon, and VeChain, all blockchain projects that are developing unique solutions to prevent the delivery of fake pharmaceutical products to stores.

MidasCaps concentrates on implementing decentralized certificates of origin together with manufacturing their own product — capsules with supplements. The idea is simple and beautiful — every capsule comes with a predetermined number of MDC tokens, the new tokens get minted along with the production of capsules.

To find the code containing the proof, it’s necessary to break the capsule and then redeem the code for their tokens. The only way to falsify a capsule is either using a capsule with no code, using one that is visibly fake, or using a copied code from a genuine one.

Luckily, the product is so cheap that there’s no economic incentive to do it.

Their tokens will be used to pay for participating in various sporting activities, supplements, equipment, and gym subscriptions on their platform.

Or they can be used to buy other capsules as a form of bonus points system. Anyway, the main feature here that evokes our interest is the certificate, and it works perfectly.

Paragon provides a solution exclusively for the marijuana supply chain. It offers a CRM for buyers and sellers, coupled with a set of tools, and built to facilitate the life of the cannabis industry and to provide extra safety for end users.

Every plant, batch, strain or product can be tracked, and every operation is written onto the blockchain ledger. If someone tries to sell a bad product and the truth comes out, this manufacturer’s reputation will be ruined forever.

Recently, given the SEC accusations for selling unregistered security tokens, Paragon didn’t stop the development and they eventually came to an agreement with the regulator. Now they have a functional platform with real cannabis manufacturers, and it will aid the industry to grow further.

VeChain is a generic supply chain project developed in China. As stated earlier, the majority of fake drugs are manufactured in China. VeChain, together with DNV GL, was selected to develop a local drug and vaccine traceability solution.

It was already successfully implemented in Shanghai where an IoT device will capture and record on the blockchain all the relevant data about vaccines manufacturing and transportation.

Each vaccine receives an individual ID number that can be scanned to retrieve the entire history of that vaccine. Even if it’s a private chain, it’s a very useful one, and it can save many lives.

While their are several other Provenance solutions based on Blockchain technologies, I picked these three out to use them as examples for explaining.


As we can see, the current state of healthcare, pharmaceuticals, and the supplement industry can be categorized as terrible. The global market is flooded with fake medical products, and it’s even worse in developing countries where those fake products are manufactured. It’s a great problem for humanity, because we are talking about matters of life and even death.

There’ll always be ways to trick the system and maintain fraudulent status quo, but it will be a lot harder if the blockchain would be implemented globally in the industry. These provenance Blockchain projects, along with many others, set the route for all manufacturers, and this route leads us to a better future, where people don’t eat ink instead of vitamins and don’t get injected with a faulty liquid when they need a vaccine to live.

More by Kirill

Topics of interest

More Related Stories