Blockchain: the answer to securing the pharma supply chain

Recently a story popped up in my news feed that made me wonder why more isn't being done to exploit the power of blockchain to bring true traceability to the pharma industry. The World Health Organization (WHO) now estimates that one in ten medical products circulating in low and middle income countries are sub-standard or fake1.

In India, a shocking 20 percent of drugs sold in the country are estimated to be bogus. In China, the government announced an investigation into 250,000 children being given a faulty tetanus vaccine by a leading manufacturer. These are just a few examples.

I’m quite sure that blockchain could be a way to hold pharmaceutical companies accountable for their supply chains, stop fake drugs from entering the system and restore confidence in the industry.

It is little surprise therefore that India’s government think tank, the National Institution for Transforming India (NITI Aayog) is looking to use blockchain to stop counterfeit drugs. A proof of concept should be ready by the end of this year that will give each drug in India a unique identification code, registered and trackable on blockchain. I hope others will follow its lead.

The industry needs to work together

The technology is now being explored by a number of industries, such as food and logistics. This fast and secure, decentralized, distributed digital ledger designed to validate data in real-time also holds much appeal for the pharma industry. Blockchain records transactions across a number of computers using hefty encryption. It isn’t totally immutable however, as we are often led to believe. Like any other technological mechanism, it depends on the validation processes. The chance of it being overpowered, however, is incredibly low, which is why it is garnering such interest.

A blockchain-enabled supply chain could include the ability to identify and verify drugs and notify all stakeholders if a counterfeit drug is discovered or someone attempts to make an unauthorized change to a record. The whole system would be seamless, transparent and, most importantly, secure to all participating parties.

In the challenging market of new drug research, blockchain could be used to validate drugs as they pass through clinical trials, for example enabling all stakeholders to ensure that drug specifications are correct. It can also eliminate data inconsistencies, hence mitigating the number of faulty or inefficient drugs reaching the market. This makes the development process far more trustworthy and will dramatically cut down on drug recalls.

Blockchain’s ability to record, track and trace drugs in the pharma chain could also be invaluable in helping wholesalers manage returns from pharmacies and hospitals, ensuring they get back to safe hands.

Playing our part

Health is one of the vertical markets we are focused on, which has fired my interest in this area and got me thinking on how new technologies like blockchain could help society. Indeed, it does fulfill the requirements for global traceability in terms of security and flexibility but there is still much to do from an integration standpoint. At the same time, interoperability technologies will continue to evolve with new protocols that will support communications between different assets. With that in mind, Orange Business recently agreed to acquire Enovacom, an expert in interoperability, on behalf of our dedicated entity Orange Healthcare.

There are additional hurdles, though. The pharmaceutical supply chain is a vast and complex one with many players and a large number of entry points that are vulnerable to exploitation. Drugs, for example, may pass through a number of companies before they get to their final destination without any sort of logged quality checks.

To make the solution work, it necessitates all the entities joining this great blockchain initiative to work closely together as trusted partners, including drug ingredient suppliers, manufacturers, distributors, pharmacies and hospitals.

Blockchain may have arrived just in time ….

This may seem like a giant leap of faith, but it could happen far faster than at first anticipated, thanks to stringent regulations coming down the pipe such as the U.S. Drug Supply Chain Security Act (DSCSA). This global mandate requires any company selling pharmaceutical products in the U.S. to ensure traceability by 2023 in “an electronic and interoperable way.” The Falsified Medicines Directive in the European Union will come into force earlier, in February 2019, stipulating that all drugs in the pharma supply chain must be serialized for track-and-trace.

Blockchain’s innate power to record, track and trace products in the pharma chain from beginning to end has to be the best solution yet that the industry has found to ensure regulatory compliance and product integrity. As well as providing visibility and transparency in the manufacturing supply chain, the technology can help in managing complex data sets in drug trials. I see many benefits in the health sector where one simple record of the truth is key to patient trust.

Blockchain is an exciting technology, and I think we are still learning about its many benefits, not only within the health sector, but how it can transform business transactions as a whole. I am interested to hear your thoughts on how blockchain is set to evolve.

1World Health Organization – pharma industry research 2017

Fabrice de Windt

Fabrice de Windt is Senior Vice President Europe at Orange Business.

With 17 years’ experience in ICT in sales functions, Fabrice’s responsibilities include defining the regional partner strategy, managing presales functions and practices, and ensuring the organization is geared to providing the best customer experience. He is also executive sponsor on key new logo opportunities and existing customers.

Fabrice has held senior positions in sales functions across several companies in the telecom and IT industry.

Fabrice speaks English, Dutch and French fluently and is the proud father of three children. In his spare time Fabrice likes to play tennis and golf.