The pandemic has accelerated the digital transformation in the healthcare industry, from telemedicine to e-pharmacy, from Electronic Health Records (EHRs) to digital therapeutics, from apps to Artificial Intelligence (AI) in scanning and other tests. The pharma and healthcare will continue to lead the integration of new-age technologies like Internet of Things (IoT), AI, machine learning and blockchain in the coming years too, at a much higher pace.
However, what can be the imminent revolution that will accelerate the adoption of blockchain technology in the pharma supply chain that will change for the better soon? According to a study by Brandessence Market Research, the value of blockchain technology in the healthcare market will be nearly $513.1 million by 2028, growing at a CAGR of 50.6 per cent from 2021.
India has so far made a few half-hearted attempts to implement a foolproof track-and-trace system in the pharma value chain, despite mounting cases of spurious or substandard drugs denting its image as the pharmacy of the world. According to the World Health Organization (WHO), one in every 10 medical products, whether drugs, kits or vaccines, is substandard in the middle-income and low-income countries. Even in the US, more than $200 billion is lost every year due to counterfeiting, according to Deloitte. The World Economic Forum reports a 20 per cent annual growth of counterfeiting trade. Transnational Alliance to Combat Illicit Trade (TRACIT) reported that $2.6 billion was lost in Southeast Asia in 2020 alone due to fake drugs. Official statistics by the Union Ministry of Health say that three per cent of drugs in India are substandard or spurious. The WHO even reported a fake Covishield vaccine in Kolkata as recently as in August 2021. Everybody knows that untraced cases could be much more than the detected cases.
On the other hand, we still lack a strict tech-driven monitoring system or law enforcement to weed out spurious drugs from the supply chain. The Directorate of General of Foreign Trade (DGFT) has again extended the deadline for track-and-trace system in pharma exports till 1st April, 2022.
However, there is a silver lining. Many leading companies, voluntarily, are taking the lead to adopt the latest technologies for tracking their pharma produce. During the pandemic, it was also witnessed that several companies were going for self-imposed tracking systems to win export orders, in the face of growing awareness and demand for quality drugs. That makes a perfect ground for blockchain technology to make a big impact in the pharma supply chain.
Niti Aayog, which piloted a blockchain-powered system to track and trace, found that drugs from the manufacturing facilities are usually trustworthy. The risk of fake drugs happens more during various stages and layers of a complex supply chain. At any transfer point from the factory to the patient, drugs can be stolen, adulterated and replaced. Some estimates say that pharma cargo theft itself is worth $1 billion, annually. Blockchain makes a valid point against these vulnerabilities.
Being immutable, transparent, trustworthy, traceable, decentralised and hackproof, blockchain can almost eliminate the threats of counterfeits in the value chain, besides making the movement of goods seamless, cheaper, easier and faster. It can offer a reliable end-to-end tracking. The supply chain can be well-knit block-by-block with the use of this technology, thus making unauthorised external interference nearly impossible.
The first benefit would be the high-efficiency aspect, as blockchain stores data in a single distributed ledger, unlike the traditional labour-intensive record-keeping processes. There is no need to consolidate or reconcile different sets of records and products. Location, batch number and expiry dates can be traced easily with the help of blockchain-powered barcodes or QR codes, thus improving the overall stock management efficiency. Even this technology can be used to monitor the temperature and other valuable information during the transit of drugs.
Secondly, the immutability of blockchain means that noone can alter the data without the consensus among all the participants. A retailer cannot insert counterfeit drugs as tracking of goods and data are done on a real-time basis. Thirdly, the records stored are more secure than the traditional process where data is stored in a single server. In the blockchain, it is entered into multiple locations in a decentralised manner across the network of nodes along with the corresponding timestamps in a chronological manner. The records are tamper-proof. Another advantage of blockchain is its transparency as the data is visible to all participants. Again, traceability is the biggest hallmark as the data is auditable and this will bring a sea change to the pharma supply chain.
World leaders in the pharma industry are already working on blockchain solutions for their requirements. Pfizer, Amgen and Sanofi are working together to adopt blockchains to speed up clinical tests of new drugs. Novartis and Merck have adopted it to check counterfeiting and improve the supply chain security. Some leading manufacturers and wholesalers have created a consortium called MediLedger Network to explore further use of blockchain as the US government is implementing stern track-and-trace norms called DSCSA. The UK 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 the transactions. More importantly, it can cover the entire value chain right from the API manufacturer to the patient, involving formulation manufacturers, wholesalers, retailers, hospitals, pharmacies, etc, thus significantly alleviating the risk of denting the trust and to peoples’ lives.