Tracking pharmaceutical drugs on the blockchain…
Here’s something that may surprise us…
The FDA studied 163 drugs that had shortages between 2013 and 2017. It found that quality problems caused the shortages about 62% of the time. In other words, the drugs were produced with ingredients that did not meet quality standards. So production had to be halted.
Can we imagine how disastrous it would be if a life-saving drug or therapy suddenly fell into short supply, especially during a pandemic?
The world desperately needs to track the supply chain of vital drugs. And blockchain technology might be the answer.
IBM, Merck, Walmart, and KPMG teamed up to pilot a blockchain project that tracks pharmaceutical drugs as they move through the supply chain. This is a great application of blockchain technology. And it’s got regulatory backing from the FDA. Legislators are also pushing for it…
Back in 2013, Congress enacted the Drug Supply Chain Security Act (DSCSA), which requires the pharmaceutical industry to adopt very strict policies for tracking drugs through the supply chain. The deadline for doing so is November 2023.
We didn’t see much progress on this in the early days due to such a wide deadline. But now that we are just over three years out, we’re seeing work on the drug supply chain picking up.
And I’ll point out that this is incredibly important, especially in light of COVID-19.
The drug supply chain is one of the most complex supply chains of any industry in the world. Most active pharmaceutical ingredients are produced in mainland China and distributed from there for eventual drug production. The problem is that quality standards have been notoriously bad.
A lot of shipments go to India, which produces most generic drugs sold in the U.S. Drugs are formulated in Europe, too. And, of course, biopharma companies in the U.S. depend on drug shipments from China as well.
Right now it is incredibly difficult to keep track of where drugs are in the supply chain and where ingredients have been produced. When a quality problem has been identified, it can take several days to determine where the quality problem came from and inform all members of the supply chain. By then, it can be too late.
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That’s why this partnership caught my eye.
These four companies are applying Hyperledger, which is a blockchain technology that IBM has supported. It will track all drugs and ingredients at every point in the supply chain. And early results of this pilot are promising.
The FDA announced that Hyperledger allowed these companies to identify quality problems in seconds and immediately alert their partners downstream in the supply chain. The problem can be fixed right away… before there is any risk of patients consuming problematic drugs from a pharmacy.
This is a game changer. And it has nothing to do with cryptocurrencies or digital assets.
Blockchain technology’s advantage here is a permissioned, secure, immutable, decentralized ledger that can be used to track critical information in real time. We can determine provenance and trace products in seconds.
As consumers, we’ll be able to rest easy knowing that our prescriptions are made with safe, trusted ingredients. It can’t come soon enough.
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