Lately, more and more analysts have said that the pharmaceutical industry is an almost perfect match for blockchain technology.
A big reason for this is the need for sophisticated tracking and tracking technology, which comes with the need for detailed data on the product's point of origin and supply chain control. When pharmaceutical products are returned, most of them are wasted and destroyed because the company is unable to verify the authenticity of the product, which translates into billions losses across the industry each year. . Blockchain technology has qualities that can simplify and support these needs and beyond, which is a great reason why it is explored to help solve real-world problems in the industry. Many companies have already tested the technology or are already using it in the wider industry.
Contract Pharma: What are the main pillars of blockchain technology?
David Thomas: A blockchain is a decentralized database of transactions (or data) that exists on multiple computers simultaneously. This is a record-keeping technology that, in simple terms, is conceptually similar to a spreadsheet that is duplicated thousands of times across a computer network and is constantly updated.
The advantages of blockchain are that, intrinsically, it is independent, transparent and secure. Its security derives from the fact that its data can not be modified, can not be controlled by a single entity and does not have a single point of error that can be exploited by hackers. Encryption technology allows digital assets (data) of people to be kept anonymous and protected. Furthermore, the removal of intermediaries from the process allows transactions (data transfers) to be performed on a faster and cheaper blockchain than traditional methods.
CP: What are the two main problems of the real world in the pharmaceutical industry to which blockchain technology offers a solution?
DT: The biggest problem in the real world in the pharmaceutical sector today is the origin of drugs. It is all too easy to counterfeit drugs and it is not only the final patient who suffers from imitations that make their way onto the market, but the cost to the pharmaceutical companies is enormous. In the first place, being able to detect counterfeit drugs is very difficult and secondly, the difficulty of being able to trace them back to their origin makes traceability almost impossible.
Even the origin is a problem when it comes to returning the inventory. Instead of intentionally destroying this surplus product, the pharmaceutical company should prefer to resell it, so as not to lose clean profits. There is, however, a problem: before the drugs can be resold, the manufacturer must verify the authenticity of the returned medicines.
Thus, the problem of provenance provides two problems in one. Blockchain's ability to track and track data with the inherent benefit of immutability is able to provide a viable solution.
CP: How can blockchain technology verify the authenticity of returned drugs?
DT: Blockchain is proving effective in the financial sector due to the fact that it prevents double counting. Transactions are verified by the blockchain network itself, in contrast to a third party or central counterparty. The same principle can be applied to other sectors, the pharmaceutical being one of these.
For example, in the United States there are plans for the complete serialization of products, so they are traceable, but this would be based on each manufacturer doing it independently. By implementing a decentralized blockchain solution, it is possible to provide clarity about the provenance both for producers and customers, who could independently verify the quality and the point of origin of the drugs quickly and safely.
Merck has worked with SAP to develop the SAP Blockchain POC (Proof of Concept) app, which allows the user to connect various pieces of data to a barcode linked to a product. The item number, serial number, lot number and expiry date can be entered on the product. This data is extractable via the app, which is powered by the blockchain.
CP: How much money could you save on the whole industry when it comes to reselling returned medicines instead of destroying them?
DT: Even if the returned pharmaceuticals represent a relatively small proportion of goods (about 1-3% of sales), this equates to $ 7-10 billion a year.
CP: What new trends in the industry are conducive to the introduction of blockchain technology worldwide?
DT: Another use of the blockchain would affect the safety and integrity of clinical trial data. Security is a fundamental pillar of blockchain technology and, as far as confidential patient information is concerned, is of the highest priority. Being able to have accessible and secure data would mean that when a trial involves the participants, they could be checked against the existing chain, allowing them to be included or excluded from multiple studies at the same time. About 20-30% of the traditional budgets of pharmaceutical companies are spent on the safety of clinical trials, so there are big potential savings to be made with this technology.
CP: Any predictions for what will be the prevalence of blockchain in the pharmaceutical industry in 2023?
DT: In the pharmaceutical industry, where reliability is a cornerstone in terms of public perception and revenue is key to producers, blockchain technology has multiple applications that can satiate public hunger for transparency, strengthen whole supply chain of drug production and realize substantial savings. We may be a couple of years of full integration, but suffice it to say that when the industry fully understands the blockchain and the true value of what it can do, adoption will grow rapidly and become the norm for many. years to come.
Before starting a London-based cryptocurrency broker GlobalBlock, David Thomas was a partner in the FCA currency operations sector GlobalReach the group, where he spent
over fifteen years and has been responsible for the business and private relationships of business customers, helping to grow the business into a leader in the international payment industry.
In 2018 David set the cryptocurrency broker only by telephone GlobalBlock to meet the growing demands of both retail and institutional investors in trading, clearing and settlement of cryptocurrency transactions.