Blockchain is set to transform the healthcare industry with more efficient distribution of medicine, improved tracking and tracing of drugs in the supply chain, improved compliance to standards, tighter inventory control, and counterfeit drug detection.
Blockchain is making great strides in Pharmaceutical and Healthcare Industries. This technology is expected to transform these industries as a whole, delivering a number of powerful benefits including:
- More efficient distribution of medicines to patients,
- More accurate track and a trace of drugs in the supply chain,
- Improved compliance to standards,
- Enhanced inventory management, and
- Improved counterfeit security.
What is Blockchain?
Blockchain is a distributed digital ledger where all the transactions and activities related to the business process are recorded in a series of blocks. Each new block of the transaction is linked back to the previous blocks and is secured using cryptography. Since the ledger transactions are distributed, each participant of the network can follow the transactions but can’t alter any data.
The Need for Blockchain technology in the Pharmaceutical and Healthcare Industry
The tracking of drugs and medicines from the start of manufacturing to the time of commercialization is a daunting task, often creating multiple points of potential failure throughout the supply chain: opportunities for falsified records, contamination, etc.
Blockchain is now being increasingly seen as a means to curb such pitfalls in the Pharmaceutical industry.
How does Blockchain Benefit the Pharmaceutical Industry and Healthcare Sector?
This technology is already bringing the Pharmaceutical and Healthcare industries increased beneficial functionality like:
- Recording Patient Details – Blockchain helps hospitals and clinics with storing and sharing information related to the healthcare sector such as the patients’ health records, test results, medical sample details, payment details, and more.
- Tracking a Drugs Lifecycle – With the help of a scanner, Blockchain helps combat vulnerabilities in the drug supply chain by tracking the complete lifecycle of a drug from the point of ownership to procurement, to the shipment and delivery. The scanner tracks the drugs in real-time by scanning barcode tags.
- Tracking The Shipment of Drugs – In the case of any misdirected deliveries, tracking the complete history of the shipment of drugs can be performed using this technology.
- Identifying and Preventing Counterfeits – In the case of any counterfeit issues, this technology helps in the tracing of medicines back to the origin of the raw materials manufacturer.
- Speedy Drug Delivery – The distributed ledger technology helps to speed the delivery of drug supplies to pharmacies and end-consumers by optimizing the supply chain.
- Automated Payment Process – Blockchain supports hospitals, clinics, and other healthcare facilities in sending invoices to patients and automating the payment process.
- Digitized Prescriptions – This technology can leverage digitized prescriptions helping to eliminate paper waste and avoid the possibility of forged or altered prescriptions.
- Enhanced Communication and Collaboration – Through additional security, this technology enhances the collaboration and communication between pharmaceutical companies, researchers, drug manufacturers, hospitals, doctors, and patients.
- Reduced Cost – Reducing costs for drug manufacturers and pharmaceutical companies by streamlining the production process, increasing productivity and efficiency.
- Automated Drug Supply Chain – Enhance the automation of processes in the Pharmaceutical and Healthcare supply chain.
Complete Visibility – It provides decentralized, secure records of all transactions and provides complete visibility of processes in the Healthcare and Pharmaceutical industries.
How can Blockchain help Combat Counterfeit Issues?
First, we need to understand what type of counterfeit issues exist to defend against, which may include Counterfeit drugs or even Medical equipment.
Counterfeit drugs, for example, are drugs duplicated to look exactly like the original drug, right down to the size, shape, and color. These drugs may be contaminated with poor quality ingredients, wrong formulations, or even incorrect doses which could result in severe consequences for human life. The same severity is extended to counterfeit medical and test equipment as well.
Even though the FDA has enforced the Drug Supply Chain Security Act to control counterfeit drugs, tracking and controlling the entire trade of falsified drugs is extremely challenging and difficult.
- The World Health Organization (WHO) estimates that up to 10% of drugs in low-middle income countries are counterfeit.
- Falsified drugs are a global menace. According to the World Health Organization(WHO), falsified drugs account for over 1M deaths annually while contributing to losses of over $30B to the industry. While it is estimated that <1% of all drugs in developed nations are fake, the number could be as high as 30% in Asia, Africa, and Latin America.
- Even Ireland, a country increasingly becoming a popular investment destination for pharmaceutical companies, owing to lower taxes, access to market, and favorable market conditions are not immune to counterfeit drugs. According to the Health Products Regulatory Authority, Ireland recorded over 650,000 dosage units of falsified medicines in 2016 alone.
- The World Health Organization(WHO) reported that falsified drugs contributed to the loss of over 10,000 lives annually in Africa.
- An even more alarming statistic points to the fact that a $1,000 investment in counterfeit medicines could potentially yield up to $500,000 in return, while the same outlay in heroin and counterfeit currency could fetch in just $20,000.
All these facts combined make a compelling case for organizations in the pharmaceutical and healthcare industries to embrace Blockchain Technology, avoiding regulatory hurdles, damaged reputation, and loss of revenue related to counterfeits.
“The pharmaceutical industry has already welcomed this technology, and formed consortiums to deal with this issue.“Pfizer, Amgen, and Sanofi are in fact exploring means to use the distributed technology in the process of developing and testing new drugs.” Milind Kamkolkar | Chief Data Officer at Sanofi
This technology can address these and many other concerns to a greater extent. The drug details are added to the distributed ledger and each drug is attached to a unique identification tag. The smart contracts on the blockchain then verify whether the tags are counterfeit or legitimate.
A number of technologies are already considered useful in the pharmaceutical and healthcare industries, but one technology, in particular, is emerging in the healthcare sector – blockchain. This technology has the potential to completely transform the healthcare industry, making it a must for pharmaceutical companies to look to embrace this technology to significantly benefit from complete visibility, digitized prescription, optimized drug supply chain, speedy drug delivery, improved compliance, reduced counterfeit and more.