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Experts Discuss Tackling Pharma Supply Chain Issues With Blockchain

As the research partner of Distributed: Trade,Chain Business Insights is providing this early access into its exclusive research on blockchains’ role in supply chain management. At Distributed: Trade, we will present highlights from our research and lead a panel of blockchain innovators to offer a technology response to business issues.

Pharmaceutical companies are exploring the use of blockchain technology to address an array of challenges with their supply chains and a recent event highlighted some of the projects underway and the early lessons being learned from them.

Chain Business Insights recently presented at the Institute of Electrical and Electronics Engineers’ 

(IEEE’s) Pharma Supply Blockchain Forum, where a group of pharmaceutical supply chain managers, as well as vendors, research analysts and lawyers, came together to discuss the promise of blockchain technology and their early experiments with it.
 
Here are the four top takeaways from the event:

1. Improved Transparency

Blockchain could improve visibility, traceability, patient safety and regulatory compliance. The technology has the potential to interconnect node systems that currently don’t speak to each other well — whether they’re between trusted participants in a supply chain or within an organization. As each drug passes from the manufacturer, wholesaler and shipper to the pharmacy and the patient level, an individual block of immutable data could be created, allowing product to be tracked and traced.

Counterfeit medicines are a major problem in the healthcare system, one that affects all parts of the global supply chain. No one knows the true scope of the problem because it’s very difficult to measure this type of criminal activity. In one high profile case from 2012, the FDA detected fake versions of the anti-cancer drug Avastin, which were made from cornstarch and acetone. Blockchain applications could potentially unify various technology formats, including barcode scanning and radio-frequency identification (RFID), creating a shared, trustworthy, accountable and transparent data platform that could advance anti-counterfeit activities.
 
Importantly, the technology could facilitate compliance with the Drug Supply Chain Security Act (DSCSA) in the U.S., which mandates a national track and trace system, and the Falsified Medicines Directive and Medi-Crime Convention in Europe.

2. Coming Change

Bridging solutions are coming onto the market. Pharmaceutical companies have signed billions of documents with their public key infrastructure (PKI) credentials and they want to be able to access them from the blockchain. 

Peer Ledger is a bridge solution that helps them do that. The company’s CEO, Dawn Jutla, explained that the solution offers compatible portal services for linked-identity creation, revocation, delegation, application management, approval and asset verification services. Users can sign and verify documents and other assets. They can approve workflow stages with regulator and/or blockchain signatures linked to SAFE-BioPharma credentials.

3. Learning from Others

Pharmaceutical companies can learn from proofs of concept (POCs) in other industries. 

Like counterfeit medicines, food fraud is a significant problem, especially in developing countries. Krishna Ratakonda, IBM fellow and CTO of Blockchain Solutions, demonstrated how IBM and Walmart are using smart contracts to track and trace mangoes and pork between China and the U.S., down to individual pallets. Blockchain could replace archaic practices: some companies still use ink stamps, for example. Further, it may be possible to complement blockchains with machine learning to detect spoilage, for instance, and to overlay various datasets such as weather forecasts.

4. Off the Sidelines

Dave Mahlum, AMGEN’s director of new innovation and technology, said that blockchain projects are a “team sport” involving business and technology partners. AMGEN breaks projects down into three phases: paper analysis, POCs and early pilots. The company hasn’t spent too much time or money on blockchain projects so far. It spends a few hours to build a team, identify a problem and draw up a shortlist of vendors. A POC only takes about two to four weeks.

Mahlum concluded that blockchain technology is going to be transformational, but it’s not ready for primetime today. That said, he warned his peers about remaining on the sidelines and encouraged them to stay current with new developments and trends.

Developments in the pharma supply chain space (and the aligned food supply chain area) are accelerating and major companies are getting involved — as witnessed with IBM’s involvement in many projects and by Merck’s recent membership of the Enterprise Ethereum Alliance.

We’re looking forward to sharing some similar highlights from our research at Distributed: Trade.

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