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Perspectives

Blockchain: An Efficacious Therapy for Life Sciences

2017-09-06


When combined with smart contract and strong encryption technology, distributed ledgers housed on blockchain networks will enable pharma and medical devices companies to more effectively and efficiently interact and transact, ensuring product provenience, aiding cross-industry collaboration and delivering tamper-proof data along the way.

Blocks, chains, miners — those may sound like ingredients for a killer video game but in fact they are the building blocks of a business-changing technology known as blockchain. Blockchain often is thought of as an accounting system for hipsters who babysit for Bitcoins or a potent technology confined to the rarefied air of investment banking and trade settlements. Yet blockchain’s intrinsic qualities make it a potential game changer for a wide array of life sciences processes and transactions, too. 

Figure 1

At its most basic level, blockchain creates a distributed ledger that is a single, immutable source of truth. This means two or more parties can share information about virtually anything and be certain of its provenance and veracity — without verification from a central authority. Blockchain’s decentralized and secure framework lends itself to multiple uses for life sciences and medical devices companies. These include:

  • Data governance and records management. Life sciences regulations require extensive documentation and records management that create significant administrative activities and costs. Many of these processes could be automated using blockchain and smart contracts, with the required business rules and processing logic embedded in the contracts and their data verified on the blockchain.

  • Provenance. Blockchain verification of the point of origin of a product or molecule is immutable. Blocks are essentially tamperproof, so coupling them with digital markers helps establish and verify chains of custody to help defeat counterfeit product and meet regulatory requirements.

  • Handling sensitive data. Rules can be embedded into blockchain networks to control access to sensitive medical data as well as immutably log who accessed data and when. Healthcare consumers could use this ability to specify detailed access rights to their health records.

  • Collaboration. Blockchain networks can be created that would enable multiple parties — such as trial sponsors, clinical trial investigators and regulators across many sites — to share data securely, without fear that any single party could alter information. All parties would work from the same version of the truth, enabling more fluid and trusting collaboration.

  • Internal process management. Life sciences companies often create complex reconciliation processes to track goods and transactions across their own internal systems and factory operations, such as the evolution from raw materials to packaging and labeling finished goods. With a blockchain, transactions across systems can be tracked in a single shared ledger, eliminating the need for multiple reconciliation processes.

Building Proof Cases

We’ve built several proofs of concepts (PoCs) for applying blockchain to some of these common life sciences challenges. Temperature excursion is one such case). Many pharma products are highly temperature sensitive; if exposed to a temperature beyond specified limits, the product should be marked invalid or expired. The challenge is in tracking and verifying temperature excursions across shippers, warehouses, delivery vehicles and trial sites.

Figure 2

For our PoC, we inserted IoT-enabled loggers into batch packages and created a blockchain network for all supply chain participants. The loggers transmit temperature data, which is stored on the blockchain where all participants may access it. A smart contract includes a rule for stability checks based on temperature excursion data. The contracts compare the logger data with stability data defined in a batch master. If the logger data values exceed permissible limits, the batch is marked as expired or invalid so it can’t get to market. 

All stakeholders share a single version of the truth about temperature excursion data, and further, any batch or product is traceable via the blockchain to its origin so duplicate product cannot replace the original without notice.

We’ve also built PoCs for blockchain and certificates of medical necessity; clinical data sharing; and drug provenance.

Prepare for the Future Now

Although blockchain technology is still evolving, it is likely to be a powerful tool for reshaping industry value chains. To ensure they are in position to make the most of blockchain’s potential, life sciences and medical device companies should prepare as follows: 

Start the conversation.

Consider creating a group of evangelists to explore key tactical and strategic areas for blockchain. These teams should be made up of business and technology professionals who can explore use cases, gain hands-on experience, suggest innovations and collaborate with partners.

Build a framework for identifying use cases.

Not all transactions and processes require blockchain’s features and benefits. Points to evaluate include the need for a repository of tamper-proof data shared by multiple parties, the value of being able to trace provenance, and whether a trusted intermediary is necessary. 

Understand the differences among blockchain types.

Competing infrastructure platforms and blockchain storage solutions are emerging. The key to evaluating these is knowing your own business requirements first, then determining which offerings, e.g., permissioned or public chains, immutable or decentralized storage, etc. are best suited to delivering those. 

Follow the regulations.

Blockchain requires a rethinking of regulatory considerations that often do not apply to shared infrastructure and decentralized business models. We recommend clients participate in the Chamber of Digital Commerce, the world’s largest blockchain trade association, and connect with regulatory groups when doing PoCs to share lessons learned. 

Create a network.

Blockchain needs collaboration across traditional boundaries to reveal its true potential. Start cultivating a blockchain network ecosystem, such as creating a shared ledger with data accessible to insurers, regulators, and providers.

Blockchain could be the catalyst that enables the life sciences industry to greatly reduce costs while improving health outcomes through the use of shared infrastructure. Blockchain can also increase productivity through process automation of everything from contracts and transactions, through reconciliations. It can speed clinical discoveries and enhance clinical trials through secure data sharing and greater collaboration. Life sciences companies experimenting with blockchain will be among the first to achieve these benefits and lead the industry toward new and more effective ways of delivering better health outcomes.

To learn more, read our white paper, “Blockchain: A Catalyst for the Next Wave of Progress in Life Sciences” or visit the life sciences section of our website.

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Blockchain: An Efficacious Therapy for Life Sciences