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This article originally appeared at Disruptor Daily.
The entire pharmaceutical industry has been booming, from the manufacturing of clinical trial materials to support research studies to the regulated medicines on the pharmacy shelves. It has been one of the top industry performers of the past three decades.
By maintaining the highest safety and quality standards, many pharma business units along the supply chain, such as research and development materials, manufacturing, sales and marketing, have enjoyed rising profits. However, in recent years the industry has been showing a gradual decline in performance, due to the many challenges and “growing pains” facing the industry.
Lost ingredients in the supply chain, inactive chemicals due to inefficient cold-chain monitoring, wrongly prescribed medicines from faulty computer systems, counterfeit medicines because of gaps in security — all of these significant challenges have created demand for utilization of the latest technology to maintain visibility across the supply chain. It has come to the attention in many pharmaceutical communities that Blockchain technology can effectively repair all of these problems.
Blockchain, most commonly referred to as an electronic ledger or sheet, can securely record transactions between several parties, and in a chronological order. The features of this technology make it a very attractive tool to implement for a number of reasons.
The supply chain in the pharmaceutical industry is enormously complex, with products changing ownership from suppliers to manufacturers, distributors, and on to the re-packagers and wholesalers before finally reaching the end-consumer. It is widely known to be very difficult for anyone within the pharmaceutical supply chain to track any one product’s authenticity from start to finish. This major inefficiency ultimately results in loss of financial gains from current and future products, as well as overall loss of trust in the market.
Product portfolios have grown much more complex, and with many niche products and generics being developed for new markets, it’s only going to get even more complex. Over-the-counter (OTC) products sold in large drugstore chains are requiring high standards just the same as the prescription products, which has created a difficult path to profit for most companies.
Regulatory officials continue to pressure the large pharmaceutical conglomerates to lower prices on their consumer drugs, as these same drugs are being counterfeited at an extremely high rate, forcing them to create more robust supply chains to ensure complete traceability along the way. With all of these operational and regulatory constraints put on the supply chains, it is necessary to integrate Blockchain technology in order to address these challenges and return quality-driven, cost-effective products back to the market.
Blockchain is a platform that develops opportunities to increase trust and transparency with all business units being able to track products throughout the entire supply chain. With blockchain, the drug packaging could be scanned via barcode at any point in the chain, and also whenever the drugs change ownership. Only trusted parties would be granted the access to update information on the blockchain, and all activities would be shown in real time, as opposed to hours or even days of wait time with regular supply chain logistics systems. All parties involved in the process, from the manufacturers to the patients and consumers, would also be able to scan the barcode and see the complete history path of the product.
An optimized blockchain platform would include drug identification, verification, and instant notifications when illegitimate drugs are found or unauthorized edits are made in the system. Once blockchain is completely integrated into the supply chain, each unit of medicine will have a customized identification tag, allowing for seamless transfer of ownership through a trusted and verifiable network that is transparent and totally secure, from upstream suppliers to downstream patients and consumers.
The overall benefits of blockchain are enormous, from data security throughout the supply chain to full regulatory compliance throughout the industry. However, creating a truly integrated, global-scale operation is no easy task especially for every pharmaceutical company out there. If a company is interested in blockchain, they must carefully plan to thoroughly educate themselves, evaluate the technology, and explore if the system is a valuable asset for their products.
New strategies are starting to be developed for blockchain in the pharmaceutical industry, such as cloud-based networks that enable end-to-end visibility and complete collaboration throughout all of the supply chain partners. Other strategies combine cloud-based networks with decision-support applications using the large amounts of data in the system. Both of these strategies will ultimately increase the quality of the industry by creating higher on-shelf availability of products, lower inventories, and higher margins of profit. Many pharmaceutical companies have already adopted some of these beneficial strategies putting themselves ahead of their competition.
In the future, blockchain will revolutionize the industry and eventually become a common element within every major pharmaceutical operation. Currently, blockchain technology is adapting and integrating into the industry gradually and with a great response, but it still remains to be seen whether or not it will impact the overall distribution on a global scale. One thing we do know is the world of pharmaceuticals works at a very fast pace, and blockchain is surely a necessity for future generations.
https://innoplexus-marketing.s3.amazonaws.com/video/Parexel+Teaser+vParexel.mp4?_=1 Michelle Hoiseth, Chief Data Officer for Parexel and Dr. Gunjan Bhardwaj, CEO Innoplexus discuss the importance of access to the…