Blockchain in pharma will in coming years prove to be a powerful tool for different parts of to record sensitive information such as patient health data in a permanent and incorruptible way.

The technology will also allow the industry to become more efficient and secure in important respects.

Supply chain management

One of the biggest and most important uses for DLT in future will be in supply chain management.

Projects in the global pharmaceutical industry, perhaps uniquely, involve the distribution and supply of a plethora of products across multiple countries and jurisdictions, with important considerations of safety, security and data protections in play at every step of the way.

Digital ledgers are already being developed that can be used to track each stage of the supply chain at both the level of the individual drug and for products as a whole, enabling manufacturers to eliminate counterfeiting and other types of fraudulent activity.

In Texas, USA, One Network Enterprises has developed an end-to-end fulfillment product that manages the distribution process of essential medical supplies, using its proprietary ONE Blockchain in pharma platform.

One Network says its technology affords key benefits like serial tracking, lot tracking, lot splitting and targeted recalls.

Noting significant “global implications of substandard, falsified, and counterfeit medical products,” CTO Ranjit Notani says ONE Blockchain in pharma enables “the ability to maintain confidentiality at all levels, while maintaining a single version of the truth for every transaction.”

Also in the USA, San Francisco-headquartered firm Chronicled is working on a DLT-based project called MediLedger, which is primarily aimed at demonstrating compliance with the Drug Supply Chain Security Act (DSCSA).

Enacted by Congress in 2013, the DSCSA, which seeks to establish an “electronic, interoperable system to identify and trace certain prescription drugs” will have significant repercussions for manufacturers in the USA, and blockchain is helping to meet its requirements.

Chronicled executive Susanne Somerville says blockchain “has the capability to bring trust and automation to the baseline business logic of the industry.”

The company says its blockchain-based system “appears to fully meet the requirements set forth by DSCSA and is capable of acting as the interoperable system for the pharmaceutical supply chain prescribed in the act.”

The firm is also keen to point out that it can meet the data privacy requirements of the pharmaceutical industry itself, guaranteeing that all supply chain ‘handshake transactions’ are secure.

An inherently open system works to the advantage of new entrants. Blockchain could help smaller operators in supply chain management, particularly in developing countries, to gain the security they need to fill gaps in the market.

In developing countries, retailers sometimes have to wait months for payment for delivered medicines, and can struggle to access financing due to a lack of credit records and collateral.

In China, Easysight Supply Chain Management is helping to solve this problem with the introduction of a new blockchain platform which will track drugs through the supply chain and encrypt trading records, making it easier for smaller companies to access credit and reducing the time it takes for payments to be processed.

Ultimately, these reforms, which can improve supply chain efficiency and security, have the potential to lower costs and remove barriers for patients to access medicines.

Smart contracts

DLTs could be used to power so-called ‘smart contracts’, which would significantly reduce inefficiency in the overall pharma and healthcare ecosystems.

The hope for smart contracts is that they could allow multiple parties to enter into an agreement where there is potential for miscommunication and mistrust with more confidence.

A smart contract uses DLT to create a distributed and instantly updatable agreement comprising a complex set of rules which apply to parts of the agreement.

Smart contracts are stored with all parties at the same time, and all copies are updated simultaneously when a change is made by one party.

Such an arrangement could facilitate a transition to value-based care, as payers would spend less time and money rectifying inaccurate payments. The claims process would become more seamless.

As one commentator writes, by providing complete transparency to all parties, DLTs would also allow payers, providers and other parties “to negotiate complex bundle claims that are tied to value and move away from the fee-for-service model.”

By facilitating outcomes-based agreements, DLTs could make pricing fairer and more transparent.

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