How blockchain adds value to the pharmaceutical industry
- Since blockchain enables secure and rapid transactions, the pharmaceutical industry is leveraging its capabilities to improve the supply chain
- Among the top use cases of blockchain in pharmaceuticals include manufacturing supply chain, drug safety, and Inventory management
- The technology also promises the potential for faster delivery of safe medications and meeting government requirements at the same time
Blockchain has been serving as a disruptive technology within most industries that have increasingly embraced it over the past decade. But only when the Covid-19 pandemic struck, it became clearer that the global supply chain within the pharmaceutical industry is lacking the connectivity and data exchange that can ostensibly be resolved with blockchain technology.
Blockchain is a distributed, decentralized, and digitized ledger of transactions that records data in a way that prevents hacking and data altercation. Most people associate blockchain technology with the volatile nature of Bitcoin and other cryptocurrencies. The disruptive technology, however, has more to it.
Statistics suggest that worldwide spending on blockchain solutions is expected to grow from US$1.5 billion in 2018 to an estimated US$5.9 billion by 2023. Data shows that the financial sector accounts for over 60% of the market value of blockchain worldwide in 2018, but the technology has spread to nearly every industry from healthcare to agriculture.
Why pharma is moving towards blockchain
When cracks started appearing in the early days of the pandemic, after China switched off the lights and manufacturing largely ground to a halt, that is when the healthcare industry realized the urgency to improve the global supply chain. Supply chains across the globe started crumbling when border closures around the world took place, followed by reduced workforces, and an insatiable demand started growing internationally for goods and services that were suddenly not as available as usual.
Blockchain as a technology is crucial since it provides traceability in product lifecycles by relating data, propagating it, and distributing it securely throughout the organization. It is especially important among highly regulated industries such as pharmaceuticals. This industry requires transparency in its activities like clinical trials, supply chain control as it scales up, product validation, and quality assurance unit the final approved product is commercialized.
The primary use for blockchain within the pharma industry, according to KPMG analyst Arun Ghosh, is to serve as a “ledger of truth” for sharing complex information with regulators, pharmacy benefit managers, contract manufacturers, physicians, patients, academic researchers, and R&D collaborators, among others.
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Hence, given the ability of the technology to enable secure and rapid transactions around the world, much of the efforts in the pharmaceutical industry to leverage its capabilities are focused on improving the supply chain. In fact, three of the biggest pharmaceutical conglomerates – Pfizer, Amgen, and Sanofi – are working side-by-side to find the most effective ways to utilize blockchain technology, from storing safe data to speeding up clinical trials and ultimately lowering drug development costs.
Beyond Covid-19 and vaccinations, the technology can be used to give more confidence in the privacy of information in clinical trials, which will open the door for people to trust in providing more information. This can also lead to shorter cycles for drug development and discovery. A BioMed Central report touches on how the reproducibility of clinical research studies has been an issue for quite some time and using blockchain technology can combine privacy with secure, decentralized tracking of all data.