Blockchain: a transformational force in the future of life sciences

As the world grapples with COVID19 pandemic and its far-reaching impact, Life Sciences industry plays a pivotal role in shaping the future. A complex ecosystem of diverse stakeholders, the industry faces an uphill challenge with regulations, IP, heterogeneous data, privacy etc. These constraints are further amplified due to the current crisis and the expectation of bringing new therapies, drugs, and vaccines to the market quickly. The siloed legacy operations and fragmented landscape not only compromise productivity in the value chain, but also increase overheads.

Lack of end-to-end trusted traceability in the ecosystem is the primary reason for the thriving business of counterfeit drugs globally. WHO1 estimates 20-30% of medicines in circulation to be counterfeit globally, with Asia, Africa, South America being even higher. Counterfeit drugs cost pharma industry over USD200 billion2 in lost revenues annually and the problem only seems to be worsening with an estimated increase of 20% yearly. A single recall can cost USD1-6 billion in immediate impact and a long-lasting effect on the financial outlook of the firm.

As a heavily regulated industry, Life Sciences firms have an enormous task to comply with the ever-changing regulations. The revised DSCSA3/FMD4 guidelines enforce, drug track & trace with serialization capabilities to establish end-to-end provenance – sourcing of ingredients, manufacturing, quality assurance, safe transportation, and administration to the patient. The human toll is alarming as well. Each year tens of thousands of people lose their lives to overdose and abuse of prescription drugs. Therefore, foolproof traceability across the value chain is becoming essential and not a nice-to-have for the Life Sciences industry.

The dawn of a new era

Distributed Ledger Technologies5 have evolved over the past few years with noticeable improvements in transaction throughput, performance, latency etc. paving the way for greater adoption in Life Sciences. Building on the key features of trust, transparency, and immutability, firms can establish a stronger “co-opetition” amongst competitors. A decentralized system can alleviate the challenges of provenance, transparency and data security in the pharma supply chains. Record keeping on blockchain enhances trust amongst all parties – regulators, partners, and public by ensuring end-to-end tamper-proof documentation. A decentralized system strengthens collaboration and allows real-time dissemination of information across the ecosystem. The recent uptick in adoption of blockchain in this industry is evidence of its potential to add value to the ecosystem.

Empowering life science supply chain with blockchain

Blockchain presents tremendous potential across the entire Life Sciences value chain. It can power resilient supply chains which will accrue benefits across the ecosystem in reduced cost, increased agility, greater compliance, higher data quality, and reduced fraud. Such a system will ultimately bend the healthcare cost curve for a nation with improved outcomes.

Following are top use cases -

· PHARMA SUPPLY CHAIN: The incumbent centralized landscape with point-to-point interfaces exacerbate risk of fraud, counterfeit, and trust gap between siloed systems. A blockchain based decentralized track and trace system can help track medicines from source-to-patient. Improved end-to-end traceability can reduce cost and, in some cases, avoid product recall, thereby preserving the firms’ brand and goodwill.

· SPECIALTY DRUGS are used to treat complex and rare medical conditions which can be fatal if left untreated. These drugs are expensive, have stringent manufacturing processes and require distinctive supply chains that guarantee ambient parameters such as temperature from manufacturing to storage to transportation and final delivery. A blockchain based system will enable end-to-end traceability and chain of custody for the specialty drugs including environmental parameters. An immutable, trusted, shared ledger can deliver significant improvements to the supply chain, reduce refill costs, increase compliance, and potentially reduce the healthcare costs.

· CLINICAL TRIALS are multi-step research studies performed on volunteers aimed at evaluating the effects of a medical, surgical, or behavioral intervention on humans. Trials face significant challenges with consent management, sample collection and replacement of volunteers. Blockchain can enforce data security and confidentiality, for the wide range of actors involved in clinical trials. For example, proof of consent can be timestamped and stored on-chain as patient owned data. It can also impose explicit re-consent in real-time, prevent data misuse, and ensure higher data quality, therefore creating a highly agile system.

· PHARMACY BENEFIT MANAGEMENT: Current pharmacy claims processes are inefficient, time consuming, complicated. Blockchain can transform the landscape of payers, manufacturers, wholesalers, and pharmacies with a transparent real-time mechanism for validating, pricing and processing prescription transactions. A decentralized ledger will reduce wastage, minimize price discrepancies and ensure better purchasing experience for consumers. Such a system can also reduce the long-term prescription medicine costs.

· CLAIMS SETTLEMENT for charges that accrue toward coinsurance/deductible or not covered in the policy are time-consuming, complex, and prone to fraud. A blockchain based workflow will not only protract the turnaround time, but also significantly reduce fraudulent claims.

A decentralized future powered by blockchain

In a world full of uncertainties, like many industries, Life Sciences also face numerous challenges. However, these circumstances also present boundless opportunities to innovate. Blockchain in conjunction with Artificial Intelligence, Analytics, IoT etc. will enable an agile and resilient supply chain which can substantially increase operational efficiencies and propel the entire value chain into the future. A future that is secure, trusted and decentral.