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Blockchain for Drug Supply Chain and Its Application to DSCSA

by Athena Team on August 17, 2018 under Blockchain Technology

In this post, we are going to share blockchain for drug supply chain use case in length. This exclusive post will help you realize how blockchain has injected not only financial and enterprise-data applications but also supply chain industry as well.

As per a recent survey, 64% of the pharmaceutical companies have either integrated or planning to integrate blockchain in various applications. And this includes collecting clinical research data, managing logistics and trading-partner transactions in pharma supply chains. They have certainly ascertained the potential of blockchain in the supply chain sphere.

“Within one value chain – the pharmaceutical supply chain for drug products – many use cases exist across the board where there’s an opportunity to leverage blockchain technology. Why? Because in this value chain there are many points where processes break down due to a lack of transparency and coordination.”

The rapidly changing environment in the supply chain industry demands a quicker response to the drastic changes. Blockchain service providers like Athena are offering specially designed solutioning in blockchain for drug supply chain. Their solutions add greater visibility and efficiency to the pharmaceutical companies. Integration of this advanced technology also helps them deliver deeper impact and obtain optimum customer satisfaction at the end. The healthcare entities, for instance, have access to a shared ledger that is frequently updated and assessed in real time with each network participant. By doing so, the healthcare companies achieve greater visibility of activities. They get clarity on where an asset is at any point in time, who owns it and what condition it’s in.

Before proceeding with the application of blockchain to DSCSA, let’s first have a quick sneak peek on what is DSCSA

blockchain for drug supply chain dscsa

Here’s an excerpt from FDA,

The Drug Quality and Security Act (DQSA), was enacted by Congress on November 27, 2013. Title II of DQSA, the Drug Supply Chain Security Act (DSCSA), outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States. This will enhance FDA’s ability to help protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. The system will also improve detection and removal of potentially dangerous drugs from the drug supply chain to protect U.S. consumers.

Additionally, the DSCSA directs FDA to establish national licensure standards for wholesale distributors and third-party logistics providers, and requires these entities report licensure and other information to FDA annually.

Introduction

As with most new inventions, blockchain has also experienced its fair share of speculation, hype, myth, and curiosity by the public. While blockchain technology is lauded by the tech lovers and development community; it is also scrutinized by a highly regulated industry in need of responsive, secure, stable and risk-free systems. History proves that there is usually a wide gap between the futuristic inventions and the ground reality of business and regulatory requirement.

Blockchain for drug supply chain is nothing but a distributed ledger, where every member would have a copy of the ledger. And whenever someone makes a purchase, every other member gets notified. Each member would then verify the transaction and add it to the ledger. The added record is called a “block”. These blocks get added forming a chain – a logical sequence of transactions. Blockchain ensures complete surveillance, as there’s no centralized authority that could manipulate the record. Therefore, whenever a ledger is hacked, the other ledgers can easily verify it.

The purpose of this brief is two-fold:

  1. To educate non-technical readers about blockchain technology and its unprecedented potential in drug supply chain. Readers will also learn about its compliance with the DSCSA, new business opportunities, etc.
  2. To help readers explore blockchain options with this knowledge in hand

The challenge for pharmaceutical companies

The 2013 DSCSA has imposed a set of compliance requirements for drug supply chain participants over a 10-year period i.e. 2013-2023. The manufactures of drugs sold in the U.S. are required to serialize, or uniquely identify the products at the lowest saleable level. Besides, they all must share data in regards to certain medicines, manufacturing, trading partner and change of the ownership if any. The supply chain participants are furthermore required to integrate an electronic system so as to facilitate the data for all current and previous changes of ownership (tracing back to the original manufacturer/relabler).

This regulated process could result in piling up of thousands of electronic connections between previously “unknown” entities thereby creating chaos. Since most of the transactions are typically between the known trading partner pairs, the new challenge of “instant trust” has emerged thus demanding for a technology that can authenticate records and data.

Can blockchain for drug supply chain be the solution?

blockchain for drug supply chain dscsa

As we have already stated how blockchain can be leveraged upon to provide clarity on transactions and every other data that is being put in blocks; in the context of a supply chain, blockchain technology can be used to track the flow of drugs and supply chain operations across borders. This means that, at each step of the drug distribution process, blockchain applications can vouch for the authenticity of a shipment, thus making it nearly impossible for any kind of fraudulent activity.

Blockchain and its platforms including Ethereum, Hyperledger and Web Three JS etc. have successfully demonstrated the ability to establish a trusted, secure exchange of currency/data between unknown parties. Furthermore, by implementing blockchain, drug companies can now seamlessly address the challenge of an “interconnected system” called for by the DSCSA.

DSCSA Requirements

  1. Setting the Groundwork

All trading partners in the supply chain must:

  • Engage in sales transactions with only appropriately licensed and registered trading partners
  • Have systems in place to investigate, identify, and remove product suspected of being counterfeit, diverted, or otherwise unsafe Pass and accept Transaction Information (TI), Transaction Statements (TS), and Transaction History (TH) with all sales.
  1. Serialization

Supply Chain trading partners must only engage in transactions of products which are encoded with a unique product identifier and be able to verify the legitimacy of the product by:

  • Manufacturers
  • Repackagers
  • Wholesale Distributors
  • Dispensers (Clinics, Retail)
  1. Unique Identifiers

Supply chain participants must be able to uniquely identify the products.

As per GS1 Standard, data carriers are provided with a Global Trade Item Number (GTIN) – It uniquely identifies products that are traded. This unique number can be combined with extended data such as serial numbers, lot numbers, and expiration dates at all packaging levels.

  1. Data Carriers

Data carriers must be present at all packaging levels and the supply chain participants must ensure that they can be universally interpreted.

GSI data carriers capture the huge amounts of data about different business requisites including DSCSA lot number, serial number, and expiration date. They also include linear and 2D data matrix barcodes and EPC-enabled radio frequency identification (RFID).

How blockchain can solve the DSCSA problem much before 2023

Blockchain could be the missing ingredient in the “interoperable system” the law calls for. Click To Tweet

blockchain for drug supply chain dscsa challenges

As per the DSCSA regulations, post-November 27, 2023, pharma supply chain companies in the U.S. will no longer have to pass the transaction histories to their customers. However, they are required to be equipped with the necessary systems and processes to promptly facilitate the collected data required to produce the history of all the transaction made so far leading back to the manufacturer.  The act of gathering the transaction history would only be necessary, provided there is a situation when an investigation is required on account of an illegitimate product. When something so crucial is needed, its complexity is actually compounded and this is where blockchain can play a pivotal role in delivering the authenticating information.

Upon being contacted by a federal agency, the healthcare institutions will be asked to produce their transaction details for a given set of the product leading back to the manufacturer. This will alert the manufacturer and he might legitimately ask a couple of questions like, “Who are you?”, “Are you a legitimate member of the supply chain?”, and “How do I know that you own the drug you requested information about?

blockchain for drug supply chain compliance

Blockchain eliminates the necessity of raising such questions of trust. Without blockchain for drug supply chain, the healthcare managers, and the manufacturer, who have no direct business relationship, can take more time than the regulated timeline to establish the trust by responding to each other’s queries.

Blockchain for supply chain introduces a viable way of maintaining transparency and easy access to the data related to ownership, quality or shipment of the drugs. This state-of-the-art technology eliminates the need for a central repository. It instead creates a distributed architecture that works with information packets consisting of any format, including GS1 EPCIS events.

Conclusion

Blockchain for drug supply chain is an imperative digital solution that meets DSCSA compliance. Besides, this advanced technology can also be leveraged upon to extend its potential into other value-added areas such as recalls, reimbursements, returns, clinical trials, etc.

Much like its counterparts such as artificial intelligence, Internet of Things and data science, blockchain for drug supply chain promises to revolutionize the operations in a much-secured environment that’s essential for business transactions and consumer and patient interactions.

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