The pharma supply chain: Poised and ready for blockchain

The most important commodity in the pharma and life sciences sector is trust. When a patient pops a pill, they’re are putting their life in the hands of the doctor who prescribed it, the drug company that developed it and the supply chain that delivered it, reports Tim Jenkins, Partner, Life Sciences Practice, Infosys Consulting

Although problems with drug production and supply are thankfully rare, the consequences of failure could not be more significant — for the consumer, of course, but also in terms of reputation for the pharmaceutical company. We trust that these supply chains are watertight, but this isn’t always the case.

Earlier this summer, The Guardian reported that criminal gangs in Italy had stolen unsafe medicines and sold them to UK pharmacies.1 Although these drugs weren’t counterfeit, they had been outside the regulated supply chain for so long that they were classified as “falsified.”

The pharmaceutical industry is well aware of its responsibilities to its patients and is quick to take steps to address any problems that put people’s safety at risk. The Chicago Tylenol murders back in the early 1980s provide a great example.

Not only did Johnson & Johnson, the company whose products were spiked with cyanide, win praise for the way they managed the crisis, but the industry as a whole quickly developed tamper-resistant packaging. But maintaining consumer trust means that the industry must constantly anticipate future challenges and harness the technologies to ensure verification and traceability throughout their supply chains.

Towards perfect oversight

As the pharma supply chain becomes more complex, the industry needs to keep working hard to maintain the trust that they have built up among the public. As far back as 2013, the US Food and Drug Administration (FDA) recommended the creation of an electronic, interoperable system to identify and trace prescription drugs.

This comprised a three-stage guideline encompassing product verification — including transaction histories and the integration of data from different software systems — serialisation, which defines “start-to-finish” product identifiers across all packaging, and full traceability throughout the entire supply chain.

Since then, the technology and pharma industries have collaborated effectively to develop systems that address these guidelines. New systems now add extra layers of trust, data security and audit trails while also improving the quality and economy of clinical trial processes. The challenge that remains is how to take the wealth of data and integrate it into a single, standardised system, which is where blockchain promises to be revolutionary.

Tamper-proof supply chains (and other game-changing opportunities)

Blockchain is fast emerging as one of the most important technologies to manage the masses of data involved in drug development and supply — from clinical trials to consumer marketing to logistics. Blockchain was developed to track and record bitcoin transactions and uses a distributed ledger model.

Because information is replicated across every node in the network, the technology acts like the tamper-proof seals on modern medicines, as it makes it virtually impossible to falsify information stored on the blockchain.

One of the immediately obvious uses of blockchain in the supply chain is to register the transfer of goods between two parties, identified as two addresses in the blockchain. The transaction, including all supporting information, is then logged in the blockchain and is made available to all parties involved in the transaction, enabling them to trace its provenance throughout the entire supply chain.

Blockchain’s distributed ledger means that it is impossible for anybody to manipulate this data, giving regulators the ability to determine with certainty who is responsible for contamination or other compliance breaches … and where these occurred.

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Blockchain doesn’t just have the power to increase traceability and combat counterfeiting at the supply level, it also has the potential to revolutionise the entire supply chain from supply to manufacturing, warehousing, shipment through to distribution and even at the pharmacy, doctor, patient and clinical trial level.

But the benefits aren’t purely about keeping track of drugs, important as that is. There are a host of other potential applications, from making clinical data tamper-proof to making governance and compliance more transparent, to using blockchain to help wholesalers access credit faster through more efficient credit checking and onboarding.

Unblocking blockchain

Exciting as it is, we’re still some way from blockchain delivering on its promises. The technology is still in the very early phases of adoption in general, and the pharmaceutical industry is no exception. One of the key obstacles to implementing blockchain successfully is acquiring the skills needed to ensure smooth implementation.

Additionally, although there are already some real solutions in the market, integration remains a key concern for businesses. The best way to ensure the compatibility of solutions is to have a dedicated network and develop a consortium of companies to agree upon general standards for adoption.

It’s difficult to imagine these teething troubles delaying blockchain’s adoption for long. That’s because, among blockchain’s many benefits, it adds immeasurably to those central concerns of every pharma and life science firm: protecting patients’ safety and strengthening their trust.