Blockchain will save future life science supply chains

Read the article in Danish here. 

In pharmaceutical, biotechnology and medical companies, the fear of passing on intellectual property to competitors has, to date, led players to view any collaboration as "high-risk." Yet, today, we know that collaboration, sharing and partnerships within the supply chain are crucial to survival.

On 3 March 2020, the World Health Organization (WHO) reported growing concerns about the lack of personal protective equipment (PPE). Almost overnight, the concern became a reality for many hospitals in the early days of covid-19, including in Danish hospitals. In addition to the lack of PPE equipment such as masks, clothing and face shields, there was a critical shortage of the anti-gen test kits that the experts considered the most important tools for reopening the world economy.

Hospitals all over Denmark (and the world) saw an increasing demand for personal protective equipment, which meant that staff and government agencies could not rely on their traditional procurement processes for buying new products and finding new suppliers. The problem exacerbated the weaknesses in the medical supply chain as the new increased demand meant that counterfeit PPE products filled some of the shortages. According to the customs authorities in Denmark, almost two out of three packages of PPE products entering the Danish market were counterfeit!

The pandemic has challenged the pharmaceutical industry's supply chains and demonstrated the importance of using product verification  to create a commercial advantage. Therefore, many are looking at blockchain technology, as it has many features to help improve a large part of the supply chain.

Features of the technology such as decentralisation, transparency and immutability make it cheaper and faster to verify the validity of various products as they pass through the jungle of supply chains. According to a survey conducted by the Pistoia Alliance, almost 70 percent of pharmaceutical, biotechnological and medical leaders believe that blockchain will have the greatest impact on the supply chain in the future.

However, this will only happen if all the stakeholders involved in the supply chain are able to share and update data without being afraid of losing control and confidentiality of their own data. This requires "governance" to be governed by all links in the supply chain and not just by one party.

The good news is that the technology is now so mature that companies can safely work together cross-functionally without having to relinquish control or even show their own data to other members of the chain. The technology makes it possible to have confidence in the network, the code and the cryptography, which ensures a form of transparency, detects fraud and confirms what is true. 

Transparency across the supply chain is a team game
The life science industry is a highly regulated industry, where the fear of passing on intellectual property to competitors has meant that companies have so far viewed any collaboration as "high-risk". Today, it is well understood that collaboration, sharing and partnerships within the drug supply chain are / will be crucial for long-term survival. Without collaboration and partnerships, blockchain technology will not benefit as the technology can only work if industry standards are in place.

An example is Merck, AmerisourceBergen & GlaxoSmithKline, who established a partnership with SAP to develop a blockchain solution to identify and track medications by serial number, batch and expiry date. The solution used barcode scanning to provide real-time visibility of the location of drugs, wherever they might be, including manufacturer, brand owner, wholesaler and delivery. Their mission then, as now, was to abide by the rules and fight counterfeit drugs.

Another blockchain project is the MediLedger network, which is a consortium focusing on pharmaceutical supply chains. Here, drug manufacturers and wholesalers were brought together in a working group to investigate the blockchain's potential for a track and trace system for US drugs to meet the requirements of the Drug Supply Chain Security Act (DSCSA) by 2023. Among the working group members in the MediLedger network are Pfizer, AmerisourceBergen , McKesson, Bayer, etc.

The pilot project was with retailers, transport providers, wholesalers and manufacturers, and according to the final pilot project report, it was possible to use a blockchain-based solution to comply with DSCSA requirements for interoperable, electronic tracking of packages.

Finally, there is PharmaLedger, where some of the consortium partners include Novartis, Pfizer, Novo Nordisk, AstraZeneca and many more global pharma executives. The project is supported by the EU and aims to enable health innovation in supply chains, clinical trials and health data.

With the increasing compliance pressure from the EU (Falsified Medicine Directive), the USA (Drug Supply Chain Security Act) and other rules around the world, organisations will eventually become more mature about cooperating, and with the help of blockchain, organisations can establish an infrastructure, which can verify the authenticity of a product faster and cheaper. If we create a good infrastructure within blockchain, we will not only be better prepared for another pandemic, but also generally be better prepared for the future, as technology will make it easier to identify counterfeit, expired and damaged products.