A technological innovation that's primarily associated with the finance industry is unexpectedly emerging as a major disruptor for pharmaceutical and supply chains. Blockchain can be a solution to help build the trust needed between parties to drive transactions using a process that could upend the pharma supply chain and completely transform the cold chain as we know it.
This technology is best known--and understood--within financial industry circles as the engine behind Bitcoin, a virtual currency launched in 2009. It creates an unchangeable record-keeping system for a data-driven monetary system and all its transactions. Like other emerging technologies, Blockchain is constantly evolving as new applications for it are discovered.
This decentralized, digital ledger system uses algorithms and encrypted keys in linear blocks of time to create a sequential chain that ensures a level of verification and trust. Almost every industry may be affected and is exploring its potential.
Blockchain is gaining attention for its possibilities in both healthcare and supply chains. One particular application fueling interest may be the track and trace requirements of the Drug Supply Chain Security Act (DSCSA). This act requires a standard for the interoperable exchange of track-and-trace information.
"The fact that it is immutable--no one can change that record--should be of interest to the Food and Drug Administration and other regulators," says Susanne Somerville, founder and principal of The LinkLab, which specializes in helping companies comply with track and trace requirements.
Together with the Internet of Things (IoT), Blockchain is poised to revolutionize the healthcare ecosystem. And, according to Somerville, the pharmaceutical industry is already on board. As part of its MediLedger Project, The LinkLab is spearheading a working group of top pharma companies and wholesalers to explore and develop innovative Blockchain strategies. Potential use cases include cold chain management and verification of temperature monitoring.
A "block" is grouped data showing all transactions completed in the prior 10 minutes between parties tapping the Blockchain. "Each block is a time-stamped record of transactions, linked together in a growing, unbreakable chain," explains Ryan Orr, CEO of Blockchain and IoT company Chronicled, which focuses on smart supply-chain solutions.
"Blockchain uses a 'hash' function to shrink data and cryptography to secure records, creating a shared ledger that can be public or private, where parties need digital keys to access and interact with the system," he explains.
Because it has no central database, Blockchain can avoid the risk of tampering with the record, which makes it "a good tool for transfer of custody and event logs for pharmaceutical products," Orr says.
For time- and temperature-sensitive healthcare products, safe delivery is crucial. Blockchain solutions could help speed up logistics, minimize discrepancies, create potential cost savings from streamlined processes, improve product visibility and add visibility as products travel through the pharma supply chain.
"For example, if a vaccine is out of its required temperature range for too long, it could become less effective or, in some cases, wholly ineffective," Orr says. "So for providers that offer temperature monitoring services, it's very important to have a shared understanding of the temperature history across the many players in a supply chain prior to product administration."
But watch for bumps in the road. The energy intensive nature of the current Bitcoin network is simply not sustainable across healthcare, so new methodologies are under examination to reduce computing power, according to Somerville. "Our work on the track and trace of prescription medicine needs 2,000 transactions per second," Somerville says, up from the eight transactions per second recorded under existing Blockchain technology.
So what's next? Strengthening blockchain's infrastructure to be enterprise-ready. The technology is evolving, and Somerville is confident that with work underway in the industry, many enterprise solutions will emerge.
Now is the time for pharmaceutical companies to engage in working groups, participate in pilot programs, and build collaborations with others that have products or prototypes in this space.
With an inevitable ripple effect on supply chains Blockchain has the potential to propel an industry. It is a record of truth--critical in healthcare--where privacy and security are important.
"Blockchain could catapult the transaction verification process for the pharma industry," Orr predicts.
While still in test pilot mode now, Somerville foresees an emergence of actual industry solutions within the next nine months. But first, Orr says, stakeholders must grab a seat at the table: "If you want to be involved in sculpting strategies, be part of the conversation."
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