2025-09-22

The pharmaceutical supply chain, globally acknowledged as one of the most tightly regulated and complex systems, is now facing renewed challenges as it expands into India’s Tier II and III markets. While metropolitan hubs have largely implemented advanced serialization, digital authentication, and secure distribution systems, India’s Tier II and III markets remain vulnerable due to weak infrastructure, fragmented distribution, and counterfeit infiltration.

For pharmaceutical manufacturers, this is not merely a logistical challenge; it is a critical responsibility. Ensuring the integrity and safety of life-saving medicines across all geographies demands securing the entire supply chain ecosystem.

The Expanding Risk Landscape in Emerging Markets

India’s Tier II and III markets are experiencing rapid growth in pharmaceutical consumption. This surge, while positive for healthcare access, exposes the supply chain to heightened risks including product diversion, unauthorised reselling, and infiltration by counterfeit medicines. These risks are especially pronounced in areas where regulatory oversight and supply chain integrity are weaker.

Reflecting this reality, the ASPA CRISIL Report 2022 highlights that substandard and falsified medicines continue to pose a serious threat in semi-urban and rural India. The scale of counterfeiting varies across cities, according to the ASPA–CRISIL report - Delhi NCR (15 percent), Agra (13 percent), Jalandhar (23 percent), Mumbai (18 percent), Ahmedabad (21 percent), Jaipur (14 percent), Indore (29 percent), Kolkata (22 percent), Patna (18 percent ), Chennai (25 percent), Bangalore (18 percent) and Hyderabad (32 percent). These figures show that counterfeiting is both a national threat and a localised crisis, calling for targeted interventions.

These products often enter the supply chain through fragmented distribution points or informal retail channels where authentication and traceability systems are weak or absent. This fragmentation significantly increases the risk of patients receiving ineffective or harmful medicines, damaging both public health and industry credibility.

Furthermore, in many Tier II and III markets, counterfeit medicines are often purchased knowingly by consumers due to the limited availability of original products and the appeal of lower prices. This highlights the urgent need to address demand-supply gaps and ensure consistent access to genuine pharmaceutical products across all regions.

Technology Solutions for Securing Tier II/III Supply Chains

To address vulnerabilities in India's semi-urban and rural pharmaceutical supply chain, manufacturers must adopt a multi-layered security approach blending physical and digital technologies. Holograms offer immediate visual authentication through features like colour-shifting, microtext, and covert markers, serving as the first line of defence at the point of sale. At the same time, serialisation and scannable QR codes enable traceability, helping stakeholders verify authenticity and track products across the supply chain.

To further strengthen protection, a combination of secure packaging formats, such as tamper-evident labels, tear tapes, tagger foils, and security blister foils, is used to safeguard against manipulation. These physical measures work alongside digital tools like phygital authentication systems, which combine on-pack security elements with mobile verification apps and cloud-based tracking. This empowers pharmacists and patients, particularly in underserved areas, to confirm a product's legitimacy using just a smartphone.

Real-time dashboards collect data at each checkpoint, enabling manufacturers to identify anomalies and counterfeit hotspots quickly. Supporting technologies like RFID tracking, covert machine-readable markers, and AI-driven verification tools automate detection and enhance accuracy at scale. Along with this, blockchain-based track-and-trace systems provide an immutable, transparent record of product movement from factory to pharmacy, reducing risks of tampering.

Ensuring these tools align with global standards such as ISO 22383 helps maintain robustness, interoperability, and scalability. Most importantly, the solutions must remain accessible and user-friendly to ensure widespread adoption in Tier II and III markets. By integrating these technologies effectively, manufacturers can curb counterfeiting, boost consumer confidence, and lead with quality assurance.

Empowering Stakeholders Through Collaboration and Compliance

No single stakeholder can secure the pharma supply chain alone. The ASPA CRISIL Report 2022 stresses the urgent need for cross-sector collaboration among manufacturers, packaging providers, technology firms, regulators, and industry associations to develop a unified, technology-forward authentication ecosystem.

Such collaboration enables the creation of standardised infrastructure, shared protocols, and interoperable solutions tailored to the unique challenges of India’s rural and semi-urban markets. Industry-led consortiums can drive investments in authentication technologies, minimise redundant efforts, and promote best practices.

Platforms and forums that bring together industry experts to discuss authentication and cyber security are increasingly vital. These platforms help stakeholders stay informed, share learnings, and jointly develop more secure systems for protecting pharmaceutical products.

Moreover, the report highlights that collective action not only strengthens security but also optimises costs, making authentication infrastructure sustainable for all stakeholders involved.

Treating supply chain security as a strategic investment not just a compliance obligation is essential. Manufacturers that proactively fortify their supply chains position themselves as trusted leaders in an increasingly competitive and regulated landscape.

According to the ASPA and CRISIL Report 2022, 33 percent of consumers unknowingly purchase counterfeit pharmaceutical products, highlighting the urgent need for awareness and robust consumer-facing authentication tools.

Looking Forward: Trust, Accountability, and Regulatory Strength

Securing Tier II and III pharma supply chains is no longer secondary; it is fundamental to the future growth of India’s pharmaceutical industry. The path ahead demands the integration of advanced authentication technologies, adherence to standards such as ISO 22383, and empowering stakeholders through accessible digital verification tools.

For pharmaceutical manufacturers, trust is the sector’s most valuable asset. By ensuring every product, regardless of where it is sold, is protected, traceable, and verifiable, the industry not only safeguards public health but also delivers the assurance patients and providers expect.

Governments must also play an active role by enforcing stricter penalties for counterfeiters, enhancing surveillance of distribution networks, and ensuring regulatory bodies are equipped to act swiftly when threats are detected.

The future of Indian pharma lies in transparent, resilient, and inclusive supply chains that uphold quality from metropolitan centres to the smallest rural clinics. Through collaborative effort and the right technologies, the sector can turn challenges into opportunities, building a safer pharmaceutical marketplace for all.