In Blockchain We Trust

Oct 29, 2018

What if innovations in the life sciences supply chain kept up with innovations in medicines and treatments?

With many serialization and track and trace regulations in the compliance period, and others (e.g., EU FMD, US DSCSA) on the horizon, life sciences companies need to think beyond serialization as a core capability and prepare for the next generation of supply chain. Verifying the provenance of a medicine—from where its ingredients were made and where the drug was manufactured, to how the medicine was handled through the end-to-end supply chain and all the way to the patient in a trusted manner, is becoming an increasingly mandatory supply chain capability. That scenario is now possible using blockchain technology.

Blockchain (sometimes referred to as Distributed Ledger Technology or DLT) is protected by cryptography, that allows a network of nodes to collectively maintain a shared ledger of information without the need for complete trust between the nodes. Blockchain is essentially a time-sequenced chain of events based on an agreed upon consensus mechanism. The mechanism guarantees that, as long as most of the network validates the entries (i.e., the “blocks”) posted to the ledger (i.e., the “chain”) as per stated governance rules, information stored on the blockchain can be trusted as reliable. Investors and enterprises across multiple industries and functions have taken notice of blockchain’s potential.

In one example, patients with acute lymphoblastic leukemia are now benefiting from a type of immunotherapy called chimeric antigen receptor T-cell (CAR-T) therapy. The approach pioneered by University of Pennsylvania, involves the extraction of immune cells from a patient modified with cancer targeting proteins and given back to the patient. These cells are “living drugs” in the patient’s body with autologous therapies tailored to each patient. Other macro life sciences influencers are driving a shift in products coming to market specifically within oncology, central nervous system, and systemic anti-infectives. These innovative therapies challenge the traditional life sciences supply chain, increasing the need for secure and authenticated drugs that are delivered without delay and kept at a verifiable temperature. The right treatment needs to be delivered to the right patient at the right time, all through a secure supply chain.

Even today in the clinical trial phase, the data / results from the trial are not easily accessible for the patient for either purpose of sharing with their physicians or sharing across clinical trials depending on the therapeutic area.  With the use of blockchain, patients can get access and control their data to whom they want to share and what data they want to share while ensuring full security of the information. 

Looking further to practical applications across the life sciences supply chain, blockchain has applicability across all supply chain functions. However, it can particularly address certain unique aspects of the life sciences supply chain as the requirements of the supply chain evolve with the product and therapy mix.

Provenance: One of the most complex life sciences supply chain challenges has been the ability to effectively track the origin of a product (or therapy) from raw materials to the finished product. Despite the various efforts of full chain of custody systems that exist today, the fragmentation of systems between trading partners opens the risk for fraud. Blockchain technology is an ideal solution, given that no single organization is responsible for provenance. Organizations across the life sciences ecosystem benefit from having authentic product in the supply chain, ensuring brand integrity and improved patient outcomes by delivering authentic product to the patient. Blockchain enables the idea of a “digital passport” for a product, containing all relevant information for each component or ingredient, including instructions and patient adherence information from the packaging.

Serialization track and trace: For the last two decades, regulators across the globe have been implementing requirements for unique product identification to deliver greater security of finished products through the supply chain. These requirements have the aspiration to eliminate counterfeit and diverted products, ultimately contributing to increased patient safety. Like provenance, one of the major challenges with track and trace is the effective exchange of data across the ecosystem of partners—from the pharmaceutical manufacturers, to wholesale distributors, to dispensers. With the use of blockchain, supply chain partners can more effectively and securely share data across the supply chain and, eventually, with the end patient. A significant business opportunity exists in using blockchain with serialization capabilities for the recall process. Recall notification, once injected into the blockchain, can initiate communication and alert messages to all affected parties (manufacturers, distributors, dispensers and eventually patients). All parties can track and verify the recalled product, minimizing the time it takes to dispose of the recalled products, reducing risk and costs.

Specialty logistics: In one aspect of the life sciences supply chain, cold chain logistics take center stage. This series of uninterrupted temperature-controlled, refrigeration, production, storage, and distribution of products is complicated and expensive. The pharmaceutical industry expects to spend nearly $17 billion by 2020 on cold chain management.4 When applied to the cold chain, blockchain combined with technologies like IIoT (Industrial Internet of Things) can create secure documentation of storage temperatures at every point in a product’s journey. This enables supply chain managers and executives to identify potential temperature excursions and other efficiencies across the end-to-end supply chain and presents an opportunity to the challenges posed by CAR-T, as previously mentioned. Additional opportunities exist to complement blockchains with artificial intelligence (e.g., machine learning) to detect potential specialty logistics issues.

Recent industry statistics find that investment and spending on blockchain-based technology have each topped more than $1 billion and continues to accelerate. Accenture’s current projections for the blockchain services market alone estimates a CAGR of more than 60%, hitting close to $7 billion by 2021. Within life sciences alone, blockchain technology could provide a $3 billion opportunity by 2025.

Even today, drug discovery continues to be a very lengthy and cumbersome process, and, in most cases, duplicate research has occurred or is occurring at the same time. With the use of blockchain, researchers can share results from preliminary research and potentially research funding to help streamline the time and cost to do drug discovery.

But looking beyond the supply chain to the last mile to the patient, Accenture research finds that only 38% of patients feel knowledgeable about new products coming to market that may benefit their health and less than half of patients feel that their doctors discuss the entire spectrum of therapies, which often leads to treatment decisions being made without the big picture being understood. Once all the product data in the supply chain is stored in the blockchain, life sciences organizations will be able to target patients with far more relevant information—such as product availability, detailed product information, and specific product history. The ability to tie the patient to the product will not only increase patient satisfaction, but ultimately their ability to manage their own health for better outcomes. Inevitably, blockchain will more effectively deliver personalized medicines to patients in the right setting at the right times, with the right dose.

Compared to the financial markets as an example, the life sciences industry’s participation with the technology remains in its infancy. But Accenture research shows that within the next three years, approximately 30% of life sciences companies plan to utilize blockchain, opening new business opportunities and addressing challenges of the past.

However, the following represents the key barriers the technology must overcome to gain a legitimate place in life sciences:

Network effect: To reap full value from blockchain, many partners in the ecosystem must participate. Interoperability between blockchains and other technology solutions need to be addressed to get full ecosystem participation.

Governance: Smart contracts require agreement on allowed transactions among the ecosystem partners and is an ongoing exercise—this requires strong ecosystem participation and buy in.

Regulatory and legal: Because blockchain technologies offer a new sociopolitical paradigm for doing business, few legal and regulatory frameworks are in place to govern their use. From a life sciences perspective, strong regulatory frameworks can ensure the integration of blockchain technology to avoid challenges in terms of regulatory reporting, HIPAA compliance, etc. Regulators also need an in-depth understanding of how to operate in a blockchain environment.

Performance: As the blockchain in data and number of nodes, the time to verify—transaction may increase causing potential delay to standard business actions.

Supply chain applications of blockchain are endless for life sciences companies given the requirements for specialized medicines and therapies. Those that start now—who are willing to experiment, fail fast, and innovate based on that experience—will be the organizations to achieve competitive advantage and improve patient outcomes. 

 

Carly Guenther is managing director at Accenture Life Sciences.

 

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