Blockchain prototype could secure US drug supply chains

27 September 2017

Big pharmaceutical companies including Pfizer and Amerisource Bergen in the US could use blockchain technology to verify the authenticity of their drugs.

A joint venture between blockchain firm Chronicled and supply chain consultant the LinkLab is developing a system that uses blockchain to track drugs from the original manufacturer down to pharmacies while still protecting sensitive company data.

The system, called MediLedger, will allow every step of the supply chain from manufacturer to pharmacist to verify a drug’s origin without disclosing to any one individual the drug's commercial details.

It has been created to meet a legislative need for an inter-operable database to track prescription drugs through the supply chain by 2023, a requirement brought in by the US Drug Security Supply Chain Security Act (DSCSA).

Unlike many countries that have brought in similar legislation, the US has not mandated a single register or database, so Chronicled and LinkLab are hoping to prove that their blockchain system is the best for industry.

“People are meeting the law with lots of different solutions as the specific requirements unfold,” Susanne Somerville, founder and principal at the LinkLab, told SM. But many solutions are piecemeal and lack a connected logic that ensure drugs can be verified as they pass through the supply chain, she said.

“Can we demonstrate to our participants that [blockchain] is more attractive to any other solution they have, or complements existing solutions they have to add value, that will make them want to participate?” said Somerville.

This means demonstrating to the industry the technology can improve brand protection and make transactions easier. “All these products with serial numbers almost require perfect inventory management and that’s not the way the world works so there’s going to be a lot of exception handling – we believe that the blockchain can automate a lot of those.” 

Traditionally, blockchain is a shared ledger where multiple copies of the same database, stored across computers connected to the internet, communicate with each other. This allows new entries to a database to be shared with all stakeholders, while constant cross checking ensures the integrity of existing entries. 

In blockchain’s most notable application, the crypto currency Bitcoin, all the data is transparent and accessible to anyone on the database, while user identities are kept hidden. However, Somerville said this would not be acceptable in the pharmaceutical industry.

Original manufacturers will be the only ones allowed to assign barcodes to drugs and start a new chain, which Somerville described as equivalent to a “royal seal” designating it as authentic. “Every transfer afterwards effectively goes back and references, ‘Did this come from the original manufacture’, and if the answers is 'Yes' then they’ll bring that verification forward with them, that royal seal.”

To ensure transactions between companies stay private, the technology uses what Somerville calls a “zero-knowledge proof”, a form of encryption that essentially acts as a middleman between the two parties that verify the drug’s supply chain history without letting either side actually see this history. This is to protect commercially-sensitive information. 

Somerville has worked with a number of big pharmaceutical companies, including Pfizer and Amerisource Bergen, as well as wholesalers and others in the industry to understand their various business needs. A prototype is now in development.

☛ Want to stay up to date with the news? Sign up to our daily bulletin.

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates