Blockchain Surge Could Save Pharma Billions [VIDEO]
Gartner Research has predicted business value from blockchain technology will total slightly more than $176 billion by 2025, then surge to exceed $3.1 trillion just five years later. Given blockchain’s peer-to-peer transactional capabilities, those growth projections signify huge potential disruption for many industries, especially pharmaceuticals. I found out how Merck & Co. is getting ahead of the pack during my VIDEO interview with company leaders at SAP TechEd in Las Vegas.
Returned drugs worth billions
As the world’s seventh largest pharmaceutical company headquartered in New Jersey, Merck must comply with the United States Drug Supply Chain Security Act (DSCSA) that calls for the tracking and authentication of returned drugs. Returned drugs represent a total value between two to three billion dollars each year.
“We have a legal obligation over time to interoperate with all of our supply chain trade partners to verify and authenticate Merck product before they can resell that product,” said Paul Cocuzzo, Senior Director, ERP Program Integration and Operation at Merck. “We’re partnering on a blockchain-enabled POC to comply with regulations and help fight counterfeit drugs.”
Fast-tracked in just eight weeks by teams from SAP, Merck, AmerisourceBergen and Cryptowerk, an SAP Startup Focus company, the SAP Pharma Blockchain POC app uses SAP Advanced Track and Trace for Pharmaceuticals, and runs on a mobile Android or iOS device. It uses simple barcode scanning to provide real-time visibility to the location of drugs wherever they might be including the manufacturer, brand owner, wholesaler and delivery.
“Using blockchain, we can identify and track drugs by serial number, batch and expiration date,” said Jeff Denton, Senior Director, IT Global Secure Supply Chain. “We can verify drug authentication, seeing exactly where and when items were shipped and packed.”
If any industry qualified for blockchain enablement it would be pharmaceuticals. Manufacturing, shipping and delivering drugs involves multiple parties who need to exchange and share the same information. There’s a lack of trust among everyone across the network, and they need a single source of truth, in this case, the location and authenticity of drugs. And of course, there are many high-volume transactions taking place every day. Blockchain’s value to the healthcare industry likely won’t stop with drugs. The World Health Organization estimates that more than 8 percent of medical devices in circulation are counterfeit. The impact of blockchain could well save many lives.
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