Traceability And Transparency In Supply Chain Management System Of Pharmaceutical Goods Through Block Chain

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Traceability And Transparency In Supply Chain

Management System Of Pharmaceutical Goods

Through Block Chain

Shruti Srivastava, Arun Bhadauria, Sunil Dhaneshwar, Suneel Gupta

Abstract: In the phase of rapid transformation through digitalization, innovation is considered as the new dis ruptive force for development of new business models. Block chain technology is gaining significant interest across wide range of industries in India. Hence it becomes imperative that its relevance is discussed and shared for the practical advancement and also know- how. Block chain helps in managing the integrity of the finished products, managing drug recalls, safety announcements, traceability, security of its supply chain from raw material to manufacturing and then onto final dispensing to the customers. This offers a superior way to ensure the accuracy, an enabled track and trace system having distributed & decentralized ledger technology amongst the stakeholder which is cryptographically secured with tracking solutions having bar codes or radi o frequency identification codes (RIFD).The primary focus and purpose of the paper was on exploring the concept of block chain, key applications in phar maceutical industries, the supply chain visibility to manufacturers, authentication of drug supply chain, the drug serialization process, drug distribution, clinical trial management process and temperature excursion .The study is based on detailed secondary research backed by queries answered vi a email through questionnaire, various web journal, annual reports, news articles on web, and inputs from recent conferences discussion. The concept of block chain in India and abroad is mainly in proof of concept phase in life sciences and nothing has been implemented yet. In near future bl ock chain technology promises to revolutionize all aspects of medicines and medical equipment the possibilities to transpire to take a fresh approach in accelerating a digital business across pharmaceutical products, as it is enabling safe, fast, cheaper, transactions in a completely transparent manner.

Index Terms: Block chain, immutable, transparency, supply chain, drug distribution, clinical trial, serialization.

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LOCK chain, beyond leveraging in providing innovative financial services, it also provides huge benefit in other sectors as well. There is a growing pressure on industries in health care services to be more patient centric. As digital technologies are transforming, the IoT (Internet of Thing) also has enabled pharmaceutical industry and consumers a way to monitor and manage their health and there are various possibilities for the world of pharmaceuticals . Blockchain has emerged out to be a recent technology that has already paved a new way of progress and has steadily emerged in few sectors including Nasdaq‟s blockchain-based link. YES bank‟s blockchain-based vendor financing system, BNP Paribas‟s cross border B2B payments are all powered by blockchain concept, the effect of which was felt beyond finance services to retail, manufacturing and in healthcare. In recent studies it has been found that blockchain will revolutionize business and will help redefine companies and economies by 2022 using blockchain‟s decentralized and secure framework. Blockchain is a distributed ledger technology where transactions are recorded and stored making them tamper resistant which is built around strong cryptographic technology. Recent studies focus on the key principle of blockchain where it can be applied to areas such as data security exchange, patient‟s safety, to enhance productivity and in accelerating business across pharmaceutical. The concept has original inbuild security features to stop the substandard and counterfeiting of drugs. Even at the level of individual stock keeping, the blockchain will ensure the tracking of supply chain of any

product developing a proof of ownership using specific sources. The concept allows transparency in all types of transactions as every time a product changes hands the transactions can be documented, from its manufacture to sale and this can be rightly said that blockchain is immutable, provides consensus and provenance. This would drastically reduce human error, added costs ,time delays and could become a universal supply chain operating system.

How blockchain works

Blockchain does not introduce entirely new paradigm but has replaced a lengthy paper trail into an automated process of storing and securing data in tamper resistant digital format. Fig: 1 explains the anatomy of operation in financial transactions which are being carried out and recorded using block chain concept. With blockchain technology each page in a ledger of transaction forms block, this block has an impact on the next block or page through cryptographic hashing technique, which is computationally linked. When a block is completed, it creates a unique secure code, which ties into the next page or block creating a chain of blocks. Since the concept is based on strong cryptographic hash technique so transactions made cannot be duplicated or encrypted, the copies are identical and specific permission is required to access the data. As it is a distributed shared ledger amongst the network of stakeholders, it is not auditable by any one administrator, it can only be updated with the agreement of

network participant.





3202 Blockchain network can be either public (non-permissioned) or

private (permissioned): a public block chain is opened to all participants and transactions are broadcasted publicly to all, while in private only the authenticated participants are allowed, only the safe listed participant can compute to the network and broadcast the data.


The research study is focused to specific area of pharmaceuticals, identifying the process of block chain technology in enhancing the pharmaceuticals supply chain, finding key applications in respect to serialization & medical distribution, IoT and temperature excursion, clinical trials and clinical data sharing. Also it aims in finding key challenges faced in block chain industry wide- adoption.


The study is based on the detailed secondary research, exploratory research design has been used. The data collected is through various news, web portals, webinars, queries answered on email, journals, published papers of DHL, Deloitte, Accenture, etc.

4. Block chain in Pharmaceutical Industries:

The concept of block chain is holding a high potential in recreating and restructuring pharmaceutical drugs monitoring process of track and trace from the inception to final dispensing to customers in efficiently delivering a value based care. The best part of this technology is that it simplifies the process of connection and data sharing between multiple businesses and parties, providing a sense of security without the intervention of third party or fraud. Block chain can fill in the gaps and provide a strong foundation of trustworthiness and safe practices for all patients globally. The integration of blockchain in pharmaceutical industries is not only providing a platform for the visibility of supply chain but also providing real

time responses such as lifesaving medical prescriptions, medication debuts, drug identification, verification, authentication etc. creating a network which is both transparent and totally secure. Hence, there are certain important features of blockchain which are yet to be fully developed and implemented at industry level. Some of the potential applications include:

Blockchain enabled a powered supply chain:

Most of today‟s supply chain, vast data are copied up and down through batch processing which takes ample of time to propagate in supply chain. Block chain facilitates near real time, digital supply chain with visibility to track & trace. The openness of block chain provides benefits by removing lag, speeding up the supply time, reducing inventory and operational costs also improving service to the end customer. Block chain is gaining its momentum and industry players have begun finding its potential in enhancing business opportunities for improved supply chain. Fig: 2 clearly explains that how block chain offers transparency at each point making vision a reality in supply chain. Throughout the pharmaceutical supply chain, the technology is promising ways to drug companies ensuring consumers trust and product integrity. Financially, this concept is also offering benefit to supply chain logistics by generating revenue through data exchange capability, reduction in operational inefficiencies by sharing of costs through the partner collaboration, enhancement of recall process, and use of data analytics for improved outcomes and decisions. Blockchain in medical distribution & serialization: Conceptually, block chain application can benefit pharmaceutical industries making the drug distribution highly reliable and trusted. This technology offers more promise in drug distribution process than in any other areas of pharmaceuticals which is an essential part of supply chain.

The figure: 3 explains how the database can track product information and automatically providing the exact product location at each phase from manufacturer to destination, to data players to update the database without the need of a central operator. Serialization application provides a unique serial number to all the packages linking all the packages in serial numbers. A smart linked serialization provides a platform which is much more standardized with the need of printing, decoding codes with data capture enabling track & trace.

Real Time Value Network:

For a supply chain to be responsive, the block chain technology must process transactions in real time. The Real Time Value Network is latest trend based on cloud -computing technology improving demand, supply chain & logistics management efficiency, functioning on the single version of truth. Leading logistics provider Imperial Logistics (one network enterprise) is leveraging One Network to providing an end to end fulfillment backbone to their entire medical distribution process including serialization and authentication

of antimalarial drugs .One Network One Blockchain brings all supply chain trading partners on one network and facilitates collaboration in real time. With the advent of RTVN (Real Time Value Network) the pharmacies and the health care will be able to serve their patients with greater reliability, ensuring safe medication and continued flow of authentic drugs. Blockchain & Internet Of Thing: Temperature ExcursionA combination of software, sensors and the network facilitate an exchange of data between objects and mechanism. Use of smart contract makes the automation of remote system management possible . These smart contracts then validate the specific conditions and requirement as per the sender or client. The result increases system efficiency and improves cost monitoring. Combined with Artificial Intelligence, blockchain and IoT serves as a missing link that enables peer to peer transaction without the involvement of third party to certify an IoT transaction and answering to the challenges confronting scalability, time stamping, building digital trust and


Fig: 1 Illustration of a block chain transaction Source: DHL/Accenture

Fig :2 Source: Deloitte

Drug recalls via block chain:

The pharmaceutical drug distribution is very wide and complex. The industry faces challenge every day in dealing production, quality, assurance, distribution and tracking of products preventing the counterfeit issue. Blockchain allows pharmaceutical products to combat complications associated with drug recalls. Once a recall notification is inserted in the blockchain an alert message is communicated to all the affected partners from manufacturer to end user (patient). Reducing risk, cost and time all the parties involved can track and verify the recalled product eliminating counterfeit thereby increasing patient‟s safety.

Clinical trial & clinical data sharing via block chain: In order to achieve operational and research excellence and

bring together research experts, progressive thinkers and clinical trials in mobilizing life sciences, blockchain technology has brought together all the stakeholders to contribute in the advancement in area of clinical trial and clinical data sharing for industry wide adoption [18].Using the concept of blockchain in this context brought together various pharma stakeholders i.e. sponsors of clinical trials, regulatory documents, patient advocacy, groups of researchers and academia on the use cases for blockchain and the challenges which needs to be resolved to achieve consensus . Fig:5 below explains clearly as to how the peer to peer inclusive network enables data sharing, managing complexity and ensures the needed transparency while downloading the same data required for




Fig:3 Simplified example of how a blockchain based track – trace system can be used to monitor pharmaceutical goods from manufacturer to end user. Source: Accenture


Fig: 5 Source: Blockchain: A catalyst for the next wave of progress in life sciences

The application will be useful in clinical trials as well, as it gives patients a better means of making evidence-based health decisions more efficiently and securely than before.

Proof of Concept in India:

The reserve bank of India has been very closely monitoring the development and opportunities of blockchain technology concept and exploring its applicability in Indian Banks. By conducting a workshop in July 2016 with IDRBT (Institute for development and research in banking technology), brought all stakeholders, bankers and other technology partners together, in carrying out country‟s financial system technologically ahead. A white paper was introduced by the participants of the workshop featuring the concerns, experiences and possible areas of ratification of the blockchain technology in finance sector of India. The institute provided a proof of concept of applicability of the technology into trade finance application with the participation of NPCI, bank and solution provider, which is also detailed, presented and highlighted in „White Paper‟ titled “Application of blockchain technology in banking and financial sector in India”.



There are certain challenges which must be overcome before the concept is applied in mainstream in all industries, which are as follows: Industry adoption: Block chain offers enormous efficiency to breakdown all the barriers providing greater efficiency, accountability and transparency, thus gaining industry adoption becomes the most critical challenge of blockchain. The participation of trusted parties will help designing the system technologically ahead and revolutionize the business models. Organization and culture: Technological advancement and it exploration within the organization is always required. The industries should therefore enfold the concept embracing new opportunities of block chain- based

Limitations are unknown and are still being explored.

Security and Privacy: There are security issues like all public block chains are vulnerable to allowing the hackers to attack double spend coins, prevent the miners from creating the blocks and the crypto currency hacks. Also the very much fact that the information is available in the public domain runs against long standing norms and has robust privacy requirements.


The block chain technology promises innovation in business, facilitating new services and business values throughout their supply networks. With a huge volume of data getting generated every day, digitization of records can be effectively managed using blockchain. Block chain will disrupt countless industries in next five years, holding potential to recreate the pharmaceutical and medical data ecosystem by advancement in clinical data sharing to cure disease and develop treatments, beyond pills services to customers facilitating smart prescription and smart payment mode, reconstructing pharmaceutical drug monitoring process from inception to final consumption. Installation of all these blockchain applications will empower the providers deliver a value-based care. Anticipating prospects and challenges, adhering to the rules and regulations, blockchain will revolutionize digital identity which is fast approaching in becoming next big technology innovation engine.


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Fig: 1 Illustration of a block chain transaction Source: DHL/Accenture
Fig: 1 Illustration of a block chain transaction Source: DHL/Accenture p.3