Blockchain: a game changer for pharmaceutical supply chain?

Blockchain, the revolutionary digital ledger technology, has brought about extraordinary opportunities across various industries – receiving much attention from the banking and finance industries in particular.

However, the pharmaceutical industry and specifically the supply chain markets are catching up quickly. As projected by the International Data Corporation (IDC), blockchain solutions would create an opportunity of an estimated USD3 billion by 2025. This highlights an example of why the pharmaceutical industry is willing to embrace change and innovation given its great prospect.

Let’s find out the reasons for this shift in mind-set, along with the opportunities that early adopters can achieve to improve the capabilities of the supply chain within the pharmaceutical industry. 

1. Greater efficiency and reliability of supply chain

In supply chain, products are assigned unique identifiers that allow their entire history to be captured as it moves along the process to the end customer. Big pharma companies, for instance, currently use several different software programs and databases to manage drug supplies. The limitation of this is the fragmentation within supply chain that results in various inefficiencies and errors.

However, since the introduction of a blockchain system, these pharma firms can now streamline the development, testing and distribution of drugs, allowing supply chain management to be much more flexible, transparent and secure. It is the nature of blockchain’s ability to streamline processes including the operations of the pharmacies’ supply chain, removing the manual process of payments, invoicing and routine human error.

Moving away from a fragmented supply chain with separate databases, a unified blockchain system also enables manufacturers to better anticipate drug shortages at one glance, and better target drug recalls. Cold Chain monitoring in particular can also benefit from blockchain as it allows manufacturers to monitor and ensure that the temperature integrity of pharmaceuticals across the supply chain adhere to the guidelines and regulations stipulated by organisations like the FDA and WHO.

Shipment of drug supplies would also be kept up to speed. In the event a shipment is disrupted or missing, the data stored on the common ledger provides a rapid way for all parties to trace it, and determine who or where the shipment was last handled.

2. Eliminating counterfeit drugs

It is estimated that the global annual loss of USD200 billion within the pharma industry is due to counterfeit drugs. The 21st century drug distribution chain has grown immensely in scope and complexity, but is lagging behind in their digital technologies and management systems necessary to simplify and secure the whole process. Thus, assuring the integrity of pharmaceutical’s supply chain is the main cause for a rising demand in the adoption of blockchain.

Blockchain-based system could ensure a chain-of-custody log, tracking each step of the supply chain at the individual drug or product level. It will also be able to highlight any tampering which can reduce the risk of counterfeits and even save lives.

Singapore based startup, VeChain, is looking to use blockchain technology to track genuine products throughout the supply chain. It uses a mix of blockchain technology and their in-house built smart chip to track items throughout their lifecycle. The smart chip can be implemented within different IoT channels such as NFC chips, RFID trackers, or QR codes. Companies can use VeChain’s network to create registers of drugs and easily monitor their supply chains.

Similar blockchain-based solutions are offered by a few other companies like CalQLogic that helps companies with an alert — or "triggers" — when something is “off” or “not right” within the supply chain. With blockchain, a company like CalQLogic could access the entire data of the drug’s supply chain to provide triggers to various supply chain players, assuming everyone along the chain adopts blockchain.

3. Compliance to regulations

By 2023, pharma companies would be required to adhere to the Drug Supply Chain Security Act (DSCSA), which calls for the complete tracking, producing and dispensing of drugs from raw materials. The DSCSA would also require the industry to adopt an "interoperable system" to track and trace prescription drugs across the supply chain. Blockchain is likely to be the solution.

Blockchain can also ensure the integrity of data generated while maintaining privacy. Proponents also suggest it could store trial metadata, such as the trial protocols and statistical analysis plans, collect and track consent, and manage phase control using smart contracts. Hence, compliance to new regulations within supply chain can be achieved with greater ease once blockchain systems are in place. 

Journey to achieving supply chain integrity

For pharmaceutical logistics, integrity of the quality of the products manufactured needs to be maintained throughout the supply chain. The ability to provide evidence for compliance remains high with stricter regulations in place.

Adoption of blockchain could even have an impact on drug prices for patients and health systems – this is however dependent on the type of cost savings companies pass on to their customers.  Nevertheless, Blockchain is bound to impact supply chains globally and if your business does not proactively prepare yourself for the future, you may miss out on tangible returns of investments that blockchain can bring.

The pharma manufacturing and supply chain sector are undergoing great changes and to get updated on the latest industry trends, Real Life Sciences Singapore will be attending the much anticipated ISPE Singapore conference. The conference will also touch on similar topics which we will be happy to discuss. If you’d like to find out more, get connected with me for updates. You may also visit our website at for more industry related insights. 


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