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Abstract
In this paper I present the usage of blockchain technology under the specific constraints of the pharmaceutical industry. The specific areas considered are the supply chain with specific regard to the regulatory issue regarding security and the delivery and authentication of the finished products.
Furthermore the use of blockchain technology for the data storage delivered from the documentation and results of clinical trials and how the needs of the industry and the generic public can be matched using blockchain.
Blockchain is not intrinsically limited to these use cases. Areas like pharmaceutical R&D may be investigated as further fields that blockchain can positively impact. That however is beyond the scope of this paper.
Key words: blockchain technology; pharmaceuticals
Introduction
When it comes to blockchain, the pharmaceutical sector is not an exception. This vital industry is looking forward to exploiting the benefits that blockchain has to offer. The importance of the pharmaceutical industry can not be overstated, as its failures imply not merely inconvenience but hardship and death.
Although the pharmaceutical industry is a very old industry and a vital to human health, it is essential to keep striving toward improvements, to keep up with the development of new technologies and to remain state-of-the-art.
Rapid technology development can bring inevitable changes, forcing companies to rethink or adapt their business models, their value proposition, and to modify their processes. New technology has a potential to completely reshape some industries. Some companies succeed in recognizing the benefits of new technology at early stages and taking advantages through incorporating the technology productively. On other hand, some companies can disappear completely from the market scene if they fail to adapt to the changes. Companies that operate in pharmaceutical sector are more rigid and their processes are more complex but they are not immune to these changes.
Blockchain could be an answer to questions like how to make inefficient supply chains works, fighting counterfeit drugs, problems with data management, clinical trials, scattered bogus pharmaceutical industry certifications and many more. There are many stakeholders concerned and affected by such affairs and finding a working solution would benefit all the parties.
Blockchain in pharmaceutical industry
First of all, what is blockchain? – Blockchain, at ist name implies is a chain of ordered blocks that contain immutable records of data that is distributed and managed by computers scattered all over the globe. These properties are guaranteed by an algorithm requiring a majority validation of the chain. Ordering also requires use of cryptographic hashes. Hence once the data is recorded there is no way back. Though that may be inconvinient when trivial errors are to be corrected, it allows for processes that rely on total reproducability at all times. Although it became known for use in financial application, most famously cryptocurrencies, blockchain is earning its place in nonfinancial applications as well (Michael et al, 2016).
Maybe it comes as a surprise, but blockchain is not that novel a technology to the pharmaceutical sector. There have been many initiatives in the past and reasons to dive deeper and explore the advantages of such a promising technology that everybody is talking about.
The current estimations are that more than 60% of pharmaceutical companies are using or looking for ways to implement Blockchain. One of the biggest names in the pharmaceutical industry is Pfizer. The main reason why Pfizer got involved in the blockchain technology is the disconcerning growth of counterfeit drugs on the market, given the sensitive nature of one of the company’s top products, Viagra (Berkeley, 2019).
Another example is UnitedHealthcare, whose main motivation for using the blockchain technology is reducing the costs and keeping their data up to date. Further examples of companies who are looking to exploit the benefits of Blockchain technology are NMC HEALTHCARE, Roche and other(“How can blockchain,“ 2019).
Supply chain security
The supply chain in pharmaceutical industry starts with a drug discovery and ends with getting this drug approved. This process on average can take up to 15 years and consists of the drug passing through multiple consecutive phases. The drug development is highly reactive to any unplanned events and can be terminated at any phase (Ding, 2014).
The extraordinary duration and legal risks arising out of the process generate a pressure on documentation and record keeping in the course of completing each step in the process. As the drug is moving throughout the supply chain, it changes internal ownerships and it is necessary to be able to reproduce and verify each earlier step at any time during the process (Petrova, 2014).
The pharmaceutical supply chain encounter a numerous issues. But what can blockchain do about it? – To begin with, Blockchain technology reduces the overall complexity and the comprehensiveness of the system. There have many attempts to get some some clarity about this technology and how to utilize it.
According to Akash Takyar, CEO at LeewayHertz and serial entrepreneur in California: “The pharma blockchain holds the potential to enhance security, integrity, data provenance, and the functionality of the supply chains with its transparent, immutable and auditable nature“(2020).
Furthermore, he lists potential benefits of Blockchain as a solution to pharmaceutical supply chain problems such as: end-to-end traceability of health products, improving the inventory management, transparency to enhance accountability, make the recall management more efficient and reducing losses related to counterfeiting (Takyar, 2020).
Fake and counterfeit drugs
It is well known fact that Counterfeit drugs costs the pharmaceutical industry billions on a global level. This trend is reinforced with the increaseing online sales in pharmaceuticals. An even more alarming cost stemming from fake medications is the potential damage to human health, in expreme cases to the extend of causing death (Debapriya, 2018).
Counterfeit drugs are drugs that are produced questionably and then put in forged packages and even incorrect doses. They may or may not contain the original ingredients or the correct concentrations and may contain other impurities. Hence they are potentially very harmful and can jeopardize human health. Patients often acquire them online, blindly believing that these fake drugs are legitime medicines(Anderson, 2019).
Here is when the Blockchain technology comes into play: Blochchain solution to this problem is to increase transparency and rebuild the trust in pharmaceutical companies. The drug packages are equpped with unique tags or scannable codes that are immutably documented on the digital ledger. The blockchain platform in conjunction with cryptographic hashes provides verification, proper identification of the package, traceability to its origin, allowing scammed customers to notify the proper local authorities(Ariella, 2018).
According to the Gunjan, a strong believer in Blockchain technology, third-party companies can also contribute toward the solution: “such as shipping logistics and cold-chain management companies, who provide research on the movement of pharmaceuticals, could be replaced by a blockchain-based tracking system, reducing overheads for larger companies and small pharmacies,“ 2018).
Pharmaceutical data governance
Keeping relevant data secret and blocking access for anybody not convinient to the company are commonly practiced in the phmarmaceutical industry. Customers and the public require more transparency to increase the trust in the pharmaceutical industry, yet much of the data is sensitive or confidential. Keeping people ready to be open in responses and increasing transparency needs a novel solution. (Mohamad, 2018).
Here is when blockchain comes to the rescue. Data can be stored on distributed ledger technology, eliminating the need of involvement of a third party. If all predetermined conditions are met, data can be shared and exchanged immediately thanks to smart contracts. Smart contracts are programs that enable transaction to be executed automatically. Blockchain ensures security, data integrity, availability and regulates who the ownership over the data , which usually is the business unit. (“Why Blockchain for Data Governance in the Pharmaceutical Industry,“ 2017).
However, blockchain is ill suited for the storage of large data sets. Obviously for more or even all storage needs to be taken over by blockchain, technological hurdles need to be overcome by further research. A further limitation of the technology that needs to be considered is a weakness in transactional performance, as changes need to be pushed out to the whole network. It cannot be denied, that block chain was designed for other goals and is not an analytical platform (Randy, 2018).
Future
No doubts that blockchain technology is more than just a buzzword. Although operating under a lot of uncertainty, many leaders and CIOs active in pharmaceutical and health industry put their bets on the blockchain technology. This input of information can shorten the long cycle of drug development and bringing it to the market ( Mohamad, 2018).
Mark Treshock, Global Solutions Leader for Blockchain in Healthcare & Life Sciences, employed at IBM claims that: “Blockchain has the potential to transform how pharmaceutical data is controlled, managed, shared and acted upon throughout the lifetime history of a drug”(2018).
Another leader, Mohamed Zahreddine, CIO at TrialAssure, a leading clinical trial transparency and disclosure technology in the pharmaceutical industry, believes that creating a greater transparency through Blockchain will increase the trust among the population and it will result in a better image of pharmaceutical companies in the public eye(2018).
Blockchain technology is taking over in the pharmaceutical sector and no signs of slowing down. Now we just need to wait and see the effects of this technology and what kind of changes it will bring to this vital industry.
Conclusion
Blockchain owes its reputation to its characteristics like transparency, incorruptabilty, immutability, security etc, which are desirable features of every new technology on the market in today’s world. The pharmaceutical industry is focused on reproducibility and secure record keeping to a degree only matched in few other industries like aeronautics or nuclear engineering. Neither of these industries routinely deals with the general public among its customers.
Blockchain technology has a potential to support current processes in pharmaceutical sector, as well as to modernize and revolutionize the pharmaceutical industry.
References
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