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June 18, 2018

The life sciences, pharma, and healthcare industry is perhaps the second industry after finance that is exploring and evaluating blockchain technology for use in several functional areas. Besides the drug supply chain, the sub-domains of clinical trials, drug safety, regulatory compliance, and patient health records feature processes that can benefit by adopting blockchain technology. In my previous blog, I had explored the benefits of using blockchain during clinical trials.

Drug counterfeiting is a major problem in the pharma industry, and according to research by Deloitte, approximately 250,000 to 500,000 deaths per year can be traced back to use of counterfeit medicines. Some other startling statistics around counterfeit drugs: the annual worth of the counterfeit drug industry is estimated to be $200 billion (and growing!); $75 billion of the total counterfeit market exists online; 10-30% of drugs circulating across the globe are counterfeit. The health impact of counterfeit drugs is huge: from deterioration of the condition being treated, to severe complications or side effects.

Blockchain will help companies track the provenance of the raw material supplied to the drug manufacturer, and also help in tracing the finished drugs across the supply chain to dealers, distributors, and retailers. Here’s how this would work. As each party in the supply chain receives the drugs, this event will trigger a smart contract that logs the receiving time, coordinates, and other details about the package. Simultaneously, it would also trigger payment to the transporter for the completed leg of the supply chain or the commission for the distributor/dealer. An encrypted log of the consignment path would be made available to the manufacturer and each intermediate stakeholder in the supply chain.

Blockchain will not only help trace drugs across the supply chain, but also aid the product recalls process. Drug recalls are painful and expensive, and that’s not taking into account the beating pharma brands take and the penalties arising out of lawsuits raised over delays in creating and sending recall notices. Blockchain can help in tracing specific locations and stakeholders (and batches, in case of selective recalls), and reverse logistics can then be initiated.

One of the points in the drug supply chain where blockchain technology can step in is serialization (or pedigree, as it is known in the US). Serialization needs a comprehensive system that can track and trace the passage of prescription drugs through the entire supply chain. This process works on the basis of random serial numbers that are assigned to drug units. As the drug units move through the distribution chain, blockchain technology will record each step in this process – from manufacture to packing and unpacking.

This transparency is one of the unique features of blockchain technology, and can help pharma companies regain lost trust among customers.

  • Sandeep Saxena is Program Head at TCS Research and Innovation. His current focus is on developing a data marketplace platform and a cross-domain blockchain platform using existing open frameworks. Sandeep is a TOGAF-certified architect and holds MSc (Hons) and BE (Hons) degrees from BITS Pilani.


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