Pharma to lead blockchain adoption in supply chain
The pandemic has accelerated digital transformation in the healthcare sector, from telemedicine to e-pharmacy, from electronic health records (EHRs) to digital therapies, from applications to artificial intelligence (AI) in analytics and more. tests. The pharmaceutical and healthcare industry will continue to lead the integration of new era technologies such as the Internet of Things (IoT), AI, machine learning and blockchain in the coming years as well. a much higher rate.
However, what can be the impending revolution that will accelerate the adoption of blockchain technology in the pharmaceutical supply chain that will soon change for the better? According to a study by Brandessence Market Research, the value of blockchain technology in the healthcare market will reach nearly $513.1 million by 2028, growing at a CAGR of 50.6% from 2021.
So far, India has made some timid attempts to implement a foolproof track and trace system in the pharmaceutical value chain, despite increasing cases of falsified or substandard drugs that tarnish its image as a world pharmacy. According to the World Health Organization (WHO), one in 10 medical products, whether drugs, kits or vaccines, are substandard in middle and low-income countries. Even in the United States, more than $200 billion is lost each year to counterfeiting, according to Deloitte. The World Economic Forum reports a 20% annual growth in the counterfeit trade. The Transnational Alliance to Combat Illicit Trade (TRACIT) reported that $2.6 billion was lost in Southeast Asia in 2020 alone due to fake medicines. Official Union Health Ministry statistics indicate that 3% of medicines in India are substandard or fake. WHO even reported a fake Covishield vaccine in Kolkata as recently as August 2021. Everyone knows that untraceable cases could be way more than detected cases.
On the other hand, we still lack a strict technology-driven monitoring system or law enforcement to weed out fake drugs from the supply chain. The General Directorate of Foreign Trade (DGFT) has again extended the deadline for the tracking and tracing system for pharmaceutical exports until April 1, 2022.
However, there is a silver lining. Many leading companies voluntarily take the initiative to adopt the latest technologies to track their pharmaceutical products. During the pandemic, several companies have also been seen to opt for self-imposed tracking systems to win export orders, in the face of growing awareness and demand for quality medicines. This provides ideal ground for blockchain technology to have a big impact on the pharmaceutical supply chain.
Niti Aayog, who piloted a blockchain-powered track and trace system, found that drugs from manufacturing facilities are generally trustworthy. The risk of fake medicines occurs more during the different stages and layers of a complex supply chain. At any point of transfer from factory to patient, drugs can be stolen, adulterated and replaced. By some estimates, pharmaceutical cargo theft itself is worth $1 billion a year. Blockchain makes a valid point against these vulnerabilities.
Being immutable, transparent, trustworthy, traceable, decentralized and hack-proof, blockchain can nearly eliminate counterfeit threats in the value chain, besides making the movement of goods transparent, cheaper, easier and faster. It can offer reliable end-to-end tracking. The supply chain can be well integrated block by block through the use of this technology, thus making any unauthorized external interference nearly impossible.
The first benefit would be the high-efficiency aspect, as blockchain stores data in a single distributed ledger, unlike traditional labor-intensive record-keeping processes. There is no need to consolidate or reconcile different sets of records and products. Location, lot number, and expiration dates can be easily tracked using blockchain-powered barcodes or QR codes, improving overall inventory management efficiency. Even this technology can be used to monitor temperature and other valuable information during medication transit.
Second, the immutability of the blockchain means that no one can modify the data without the consensus of all participants. A retailer cannot insert counterfeit drugs because the tracking of goods and data is done in real time. Third, the stored records are more secure than the traditional process where data is stored on a single server. In the blockchain, it is entered in several places in a decentralized way on the network of nodes with the corresponding timestamps in a chronological way. Records are tamper-proof. Another advantage of the blockchain is its transparency because the data is visible to all participants. Again, traceability is the biggest feature as the data is verifiable and this will bring a sea change to the pharmaceutical supply chain.
Global leaders in the pharmaceutical industry are already working on blockchain solutions for their needs. Pfizer, Amgen and Sanofi are working together to adopt blockchains to speed up clinical testing of new drugs. Novartis and Merck have adopted it to control counterfeiting and improve supply chain security. Some leading manufacturers and wholesalers have created a consortium called MediLedger Network to further explore the use of blockchain as the US government implements strict track and trace standards called DSCSA. The UK’s National Health Service (NHS) has started using this distributed ledger technology to monitor the distribution of COVID vaccines.
Blockchain technology is all about bringing more trust to transactions. More importantly, it can cover the entire value chain from API manufacturer, to patient, to formulation manufacturers, wholesalers, retailers, hospitals, pharmacies, etc., greatly mitigating the risk of damaging people’s trust and lives.