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Blockchain’s Application in the Pharmaceutical Supply Chain

Written by Becky Ali, Blockchain Analyst at

Blockchain pharmaceutical supply chain.

For pharmaceutical companies that pursue operational excellence, an efficient healthcare supply chain is characterized by a state of interoperability that capably ensures drug quality, tracks medications and reduces the incidence of drug counterfeit.

Regulatory players like the Food & Drug Administration (FDA) are now setting standards for fully secure drug supply chains for pharmaceutical companies. These regulations were introduced in the Drug Supply Chain Security Act (DSCSA). The DSCSA outlines product tracing requirements for the interoperable exchange of information across the entire supply chain including all trading partners: manufacturers, repackagers, wholesale distributors, and dispensers. By 2023, data standards must be in place to improve transaction documentation.

The Pharmaceutical industry is now looking into blockchain technology to unlock the value-addition coming from a secure drug supply chain. By the virtue of this technology, each individual product would be set with a lot number, Global Trade Item Number (GTIN), serial number and an expiration date which would be accessible to each trading partner along the supply chain but cannot be altered. In this blockchain ecosystem, drugs act as digital assets allowing pharmaceutical companies to track the assets journey across the entire chain from authorized parties such as manufacturers, distributors, and retailers all the way to the end customers.

Leading players in the pharmaceutical industry are realizing the need to adapt with the new regulatory environment and streamline the supply chain to gain operational efficiencies. Pfizer and Genentech have teamed up to create the MediLedger Project which employs blockchain technology to track drugs across the supply chain. The technology provides a decentralized platform where ownership lies with all stakeholders instead of a single centralized authority; drug manufacturers, distributors, wholesalers, retailers and hospitals all take part in recording drug deliveries. This allows the system to keep track in real time all legal changes in ownership of the drug. Hence, at all steps, the participants on the blockchain system are authenticating drug shipments. The system also possesses the unique ability to verify the origin of serialized global trade identifiers (SGTINs) and to trace the provenance of drugs to their original manufacturers. MediLedger and its blockchain backbone is helping to bring increased product authenticity, inventory transparency, reduce counterfeit, and ensure DSCSA regulatory compliance.

Blockchain technology aims to counter medical errors and improve the handling of critical health data in a safe and secure way; blockchain technology’s application in life sciences is expected to provide a $3 billion dollar opportunity by 2025. The use of blockchain technology in the healthcare supply chain ensures regulatory compliance, customer trust and product authenticity as it avoids the occurrence of counterfeit drugs that currently cost US pharmaceutical manufacturers more than $163 billion per annum in foregone sales. Companies that are proactive and willing to experiment with the technology have the potential to achieve competitive advantages and improve customer satisfaction and safety.

AlliedBlock is a global blockchain research and development firm that is focused on delivering tailored blockchain development solutions. Contact us to learn more about how we can help you tailor a blockchain solution for your business (


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