WASHINGTON – About seven out of ten Americans take a prescription drug. Although most of us do not think twice about the journey that our medicine takes from the factory to the pharmacy, the drug supply chain is in trouble.
Approximately 10% of world drugs are spotted or dangerous and the counterfeit drug market is now a $ 217 billion industry. Because drugs are produced all over the world, products change hands dozens of times before ending up on pharmacy shelves. This creates many opportunities for fake, expired or contaminated drugs to infect an increasingly chaotic supply chain.
The FDA and other regulatory bodies have tried to solve this problem by asking companies to use audit trail and barcode-based tracking systems, all with limited success. But according to health sector experts meeting at the 2018 Blockchain Summit here last week, a new technology called a blockchain is ready to solve the problem of the broken drug supply chain.
Blockchain has risen to the fore as the backbone of the Bitcoin cryptocurrency, but it is now finding a home in the health sector. Basically, it is a turbo accounting system that encrypts and stores transactional data on multiple computers, making it virtually tamper-proof. Better yet, blockchain provides a consistent record for all participants to see – similar to a shared Google Drive document.
Within the highly regulated drug industry, blockchain could bring regulators, manufacturers, distributors and pharmacies on the same page and provide a verifiable record of a drug's travel around the world. In the end, the federal government could use the blockchain to prepare for the scarcity of drugs, predicted Jim Nasr, vice president for technology and innovation at Certara's Synchrogenix unit.
Blockchain exploded on the health scene about 5 years ago, just as Congress passed the 2013 Drug Supply Chain Safety Act (DSCSA) – a new regulation designed to repair the interrupted supply chain.
DSCSA establishes a set of requirements for the monitoring and traceability of pharmaceutical products over a 10-year period. This means that by 2023, pharmaceutical companies will need to have "interoperable and electronic product-level traceability at package level", according to the regulation.
Since then, a handful of startups with names like Cryptowerk, Ambrosus, FarmaTrust, Spiritus and LinkLab have sprung up to offer blockchain platforms for supply chain management. Their clients are pharmaceutical companies, raw material suppliers, wholesalers and pharmacies.
In the United States, the blockchain is taking off because of the high-downward regulatory pressures imposed by the DSCSA. But in some developing countries, where counterfeit products can account for up to 30% of the supply of drugs, blockchain is adopted as a means to combat rampant fraud.
Garbage In, Garbage Out
Blockchain would not radically change the way drugs go through the supply chain, said John Bass, founder and CEO of Hashed Health. Instead, Bass said, it's about monitoring the system that already exists.
"You're creating a fingerprint for that resource and you're recording it on a ledger or blockchain," Bass said. "Once you've identified it, you [can] monitor its status as it moves through all the actors in the supply chain."
Blockchain will not immediately solve all frauds, because even a track powered by blockchain- The and-trace system relies on company employees to manually enter data into a computer or scan a barcode, Pradeep notes. Goel, CEO of the Solve Care Foundation.
"We can trace a product from A to Z, but that means point of creation, you have to have enough sensors in this product that can not be changed," Goel said.
Bass agreed that in the future, the system will work much better when all pharmaceutical products are rigged with small wireless sensors that automatically writes data to the shared blockchain system, rather than relying on employees to enter that data.
"All blockchain solutions – supply chain or other – do not solve the problem of" incoming garbage, trash "," said Heather Flannery, co-founder of Blockchain in Healthcare Global. But, he added, the main difference is that today, any company can modify its documents after having covered fraud and deception.
Today, "the ability to cover fraud or criminal activity is endless," he said. "The key thing that Blockchain brings is that everything has persisted [with] little or no chance of tampering by the parties involved."
In addition, a network of shared blockchain could be verified by regulators seeking to verify the authenticity of the product and to recover every single lot of drug involved in a product recall.
Low hanging fruit
Although the blockchain was proposed as a panacea for a wide range of health problems – including correcting the tangled mess of electronic health records – experts agree that it is not ready for prime time for most of its potential applications.
The supply chain is one of the few areas in which the blockchain is being used now and shows a real promise for the future.
"The supply chain is a very interesting use case for blockchain in general because it is a very low lift," said Jake Dreier, director of growth and operations for SimplyVital Health, speaking at the Blockchain Health Conferen 2018 here. "That's what was the initial use of the blockchain – an immutable track of control."
"The supply chain for me is so obviously perfectly in tune with this technology," Flannery said.  "There is no comparison between a value chain that has an ecosystem [blockchain] … and one that has not done so – not in speed, not in efficiency, not in compliance, not in track and track."
"There is no advantage in not using blockchain in the supply chain," he said. "It is a fruit so weighed down."
2018-08-18T13: 00: 00-0400