The Case for Leveraging Blockchain to Improve the Global Health Supply Chain

Blockchain offers a number of potential solutions to supply chain issues currently facing the medical industry. This developing technology offers opportunities for decentralized record-keeping and tracking of transactions, as well as increased overall efficiency and the removal of unnecessary intermediaries.^1-4 Even so, questions remain as to what the future of the health care supply chain looks like and what roles blockchain may play in it.¹

Investigators have described the modern global medical supply chain as fractioned and inefficient, with expired and counterfeited products directly threatening patient care. They highlight 3 primary benefits of blockchain as a distributed ledger technology.

First, blockchain offers the ability to maintain an immutable record of available drugs and devices, which would help prevent the purchase of expired or counterfeit products.^1,2 Second, blockchain creates the potential for greater cost-efficacy and hospital system accountability through the reliable tracking of transactions between hospital and supplier. Third, blockchain infrastructure would facilitate information sharing between health care institutions and pharmaceutical companies or medical device manufacturers, allowing providers and suppliers to engage in a more effective feedback loop.¹

Modern technological advances and collaborations also offer an opportunity for more granular data to be stored and utilized through the blockchain platform. OCEASOFT, a French designer and producer of atmospheric monitors for supply chains, and Chronicled, a San Francisco based Internet of Things- and blockchain-focused supply chain technology firm, are currently collaborating on using blockchain technology for atmospheric monitoring in the drug supply chain.³

The atmospheric monitors collect data including CO2, temperature, and humidity, so that the integrity of the supply chain can be monitored by buyers and sellers. Blockchain would allow for this ledger to be decentralized, secure, and immutable, with logging and tracking operations synchronized to reduce duplicated record-keeping. The companies further suggest that in the event of atmospheric issues damaging product, a blockchain-based smart contract would allow for the automatic payment of infringed parties.³

Smart contracts, which pose conditions to be met to automatically execute a transaction, could serve a broader purpose throughout the supply chain of the medical industry, essentially replacing intermediaries and middlemen. Through smart contract automation, buyers and sellers can cut costs, reduce the potential for mismanagement, and improve overall efficiency. They can also be structured for automatic cost and compensation adjustment without the involvement of third-party coordinators.⁴

The health care industry and the supply chain industry are already beginning to leverage blockchain to track and manage products and health data.^5,6 In the supply chain space, Provenance, a supply chain transparency start-up, has used blockchain in a 6-month pilot program to track responsible sourcing of tuna in Indonesia. The company Skuchain builds blockchain-based B2B trade and supply chain finance products intended to target the global trade finance market.⁵

In health care, blockchain has been used to launch the VeChain-based Intelligent Tumor Treatment Center in China’s Renji Hospital, which plans to cover the full lifecycle management of the tumor treatment process in the hospital. Bayer China has also used VeChain to launch their traceability platform Csecure, designed to capture and track clinical trial supply chain data.⁶

While there are a number of potential benefits to implementing blockchain-based supply chain management in health care, investigators have offered a list of unanswered questions that point to considerable uncertainty as to how blockchain can and will be used by the medical supply industry. It still remains to be seen whether blockchain would offer considerable improvement over existing supply chain databases and anti-counterfeiting systems. Further, the exact way that blockchain would interact with current supply chain data technology—including RFID, Global Standards One, and Electronic Product Code Information Services—is unknown.

Though there is considerable optimism surrounding the applicability of blockchain to the problems encountered by the health care industry’s supply chain,^1-4 further research and real-world experimentation is necessary to uncover just how effective these solutions are.^1,4

REFERENCES

1. Yaeger K, Martini M, Rasouli J, Costa A. Emerging blockchain technology solutions for modern healthcare infrastructure. Journal of Scientific Innovation in Medicine, 2(1), 1. doi:10.29024/jsim.7
2. Clauson KA, Breeden EA, Davidson C, Mackey TK. Leveraging blockchain technology to enhance supply chain management in healthcare: an exploration of challenges and opportunities in the health supply chain. Blockchain in Healthcare Today. doi:10.30953/bhty.v1.20
3. Blockchain for temperature monitoring in pharma supply chain. Ledger Insights; June 19, 2018. Accessed October 20, 2021. https://www.ledgerinsights.com/blockchain-pharma-supply-chain-temperature/
4. Vervoort D, Guetter CR, Peters AW. Blockchain, health disparities and global health. BMJ Innovations 2021;7:506-514.
5. Using blockchain to drive supply chain transparency. Deloitte. Accessed October 28, 2021. https://www2.deloitte.com/us/en/pages/operations/articles/blockchain-supply-chain-innovation.html
6. From Bayer China to IVF Applications: A summary of VeChain's blockchain-based use cases in medical and healthcare [news release]. PR Newswire; June 18, 2021. Accessed October 28, 2021. https://www.prnewswire.com/news-releases/from-bayer-china-to-ivf-applications-a-summary-of-vechains-blockchain-based-use-cases-in-medical-and-healthcare-301314466.html