BlockchainBlockchain in the Healthcare Supply Chain

Philippe Gerwill Philippe Gerwill5 months ago11 min

Blockchain is becoming a popular buzzword, too often linked only to cryptocurrencies and especially Bitcoin for a lot of people. However, and although its first application was in the Fintech space, blockchain is a technology which is going to further outreached the cryptocurrency spaces to be used in barely every single industry ranking from education to food or travel to name only a few.

The healthcare supply chain is definitively going to adopt it maybe even quicker than other industries because of some specific challenges which are difficult to address with the actual technologies and which could be better covered by the blockchain technology.

But before moving into some more concrete examples in the healthcare supply chain, we need first to understand some basic.

What is Blockchain Technology

A blockchain is essentially a distributed database of records or a public ledger of all transactions or digital events that have been executed and shared among participating parties. Each transaction in the public ledger is verified by consensus of a majority of the participants in the system.

The blockchains’ primary feature is to organize information, data and content in a way that ensures information is not duplicated, but is also reliable, accurate, up-to-date and immediately verified.

In summary blockchains:

  • Offer an organized way to structure and store data online
  • Are constantly growing online databases
  • Are always gathering and maintaining records
  • Usually deal specifically with transactions
  • Allow users to exchange information or currency with one another quickly and efficiently without intermediary

Key Principles of Blockchain Technology

The five basics principles underlying the blockchain technology are:

Distributed Database

Everybody on a blockchain has access to the entire database and its complete history without any intermediary controlling it.

Peer-to-Peer Transmission

Communication occurs directly between peers and not through a central node. Each node stores and forwards information to all other nodes.

Transparency

Every single transaction and its associated value are visible to anyone with access to that blockchain.

Irreversibility of Records

Once a transaction is entered in the database thus validated, the records cannot be altered because they are linked to every transaction record that came before them. The recording on the database are permanent, chronologically ordered and available to all others in that blockchain.

Computational Logic

The digital nature of the ledger allows blockchain transactions to be programmed and tied to computational logic. Users can setup algorithms and rules to trigger automatically transactions between nodes.

Blockchain in Supply Chain Management

With the globalization and worldwide markets, the movement of goods across borders and long distances involves an increasing number of different parties like carriers, terminals, forwarders, haulers, drivers and shippers, requiring plenty of emails, phone calls, messages or fax interactions.

Blockchain technology can reduce costs and increase efficiency by simplifying this process. It will transform supply chain management in many different ways like transaction settlement, automated purchasing and planning, audit transparency including tracking social responsibility, accurate costing information, enforcing tariffs and trade policies, better shipping data, product safety, preventing compliance violations, provenance, reducing counterfeit goods while reducing human errors.

Companies like UPS, Maersk, DHL, Amazon or Walmart are already working on blockchain-based solution for their supply chain and major technology providers like IBM are working on blockchain-based platforms that can securely track and trace products from the procurement of raw materials through to manufacturing and consumption.

Blockchain in Healthcare Supply Chain

Blockchain-based new approaches to making and distributing products like pharmaceuticals offer the potential to track the whole lifecycle of drugs down to a single dose. A number of technology and pharmaceutical companies are already working on innovative solutions that combine digital marking of pharmaceutical products with blockchain technology to provide a means to securely and reliably track products throughout their entire lifecycle.

Blockchain technology will play a key role in supporting supply chain transformation in the healthcare sector by helping to reduce fraud and better manage quality in the manufacturing and distribution of pharmaceutical products. Companies like Pfizer, Abbvie or Roche through its Genentech division are already working actively on such solutions.

Drug supply chain is one facet of the pharma landscape that could benefit from the unique characteristics and key principles of the blockchain technology listed earlier.

Counterfeit medicines are becoming increasingly troublesome as the global black market has been providing such drugs to people without getting under the radar. The risk of human life that rises from taking counterfeit drugs cannot be underestimated. Counterfeiting is a significant problem within the pharmaceutical industry with the World Health Organization estimating the cost to the industry of counterfeit drugs at over $30 billion.



The picture above shows an example of fake and real boxes and blisters of Coartem which is a drug manufactured by the Swiss pharmaceutical company Novartis to fight against Malaria, a disease which is still affecting close to 200 millions of people per year mainly in poorer countries in Africa with a high percentage of kids.

The supply chain in the pharmaceutical industry is complex with drugs passing from manufacturing to distributors, repackagers and wholesalers before reaching the retailer and customers. There is little to no visibility throughout this supply chain to track authenticity. Companies are already working with blockchain technology to bring integrity, traceability and transparency to that global supply chain. The introduction of blockchain in such case can reap several benefits here. Drugs can be tagged with barcodes or RFID’s and once they are scanned, their records can be kept on a blockchain in non-alterable and secure digital blocks. These records will be updated in real-time as the drugs are transferred from one entity to the others in the supply chain. Parties with authorized access, including patients, can check the records anytime. The immutable nature of blockchain provides drug traceability from manufacturer to customer and allows people to check if the system is compromised somewhere.

Additionally, and apart from ensuring product integrity and anti-counterfeiting efforts, blockchain technology can help overcome the financial issues faced by smaller retailers and operators along the supply chain by securing and automating payments between trusted parties.

Coldchain management is another important aspect which can be supported and audited through blockchain technology in association with temperature tracking devices.

This brings us to a follow-up comment about device management through blockchain technology, which is another important topic for healthcare, and which would be addressed in a separate article about medical devices management as well as wearables and other injectables which are flourishing in the healthtech space and which need to be secured as well.

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Philippe Gerwill

Philippe Gerwill

Defining himself as a Digital Activist, Philippe is a recognized inspirational speaker, a futurist as well as a mentor/coach with a proven record of accomplishment especially in the healthcare and pharmaceutical industries. He is regularly speaking about Digital Health including Digital Therapeutics, Big Data, and Artificial Intelligence, Blockchain for Pharma, Internet of Things or other Digital Transformation topics in the Healthcare industry at major events and conferences. While he is mainly speaking in Europe, he is also well known in Asia where he is actually an Industry Advisor for IoTSG, the biggest special interest group around the Internet of Things in South East Asia. Philippe is also an official mentor for the Cherie Blair Foundation for Women and is actually working since more than 12 years at the Novartis Headquarter in Switzerland, most recently as an IT Supplier Manager.

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