The US Food and Drug Administration (FDA) earlier this month selected IBM, Merck, KPMG and Walmart to participate in a pilot programme to create a proof-of-concept blockchain network to enhance the security of drugs supply chain, as per a joint release by the companies. The pilot has been authorised under the US Drug Supply Chain Security Act (DSCSA), which aims to establish a regulatory oversight framework to regulate counterfeit, stolen, contaminated, or otherwise harmful drugs. Drug diversion — when prescription drugs are hijacked from the legal market — is a major and costly dilemma plaguing the healthcare industry: nearly 19 million pills, worth up to $164 million went missing in the first half of 2018.

“DSCSA was enacted by Congress on Nov. 27, 2013. It outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States. The DSCSA pilot project program is intended to help identify and evaluate the most efficient processes to comply with and apply drug supply chain security requirements.”

The project is scheduled to be completed in the fourth quarter of 2019, and outcomes will be published in a report. The project’s focus will be on the DSCSA’s requirement to develop the interoperable track-and-trace system for the distribution of prescription drugs by November 2023. The companies and FDA expect to address multiple gaps in the supply chain process, including a speedy framework for tracking inventory, sharing of accurate data among stakeholders, and assuring the integrity of products in the distribution chain.

Why blockchain?

Blockchain, being an immutable distributed ledger technology, can assist members of supply-chain in establishing an unchangeable record, and will integrate with existing systems that can be used to trace products while they are distributed.

“Blockchain’s innate ability within a private, permissioned network to provide an ‘immutable record’ makes it a logical tool to deploy to help address DSCSA compliance requirements,” said Arun Ghosh, KPMG Blockchain Leader.

All the participants as selected by the FDA have a certain vested interest in enhancing the required supply chain: Merck is a popular drug manufacturer, Walmart is a leading American pharmacy, IBM is a blockchain service provider, and KPMG consults pharmaceutical companies. Walmart has previously implemented blockchain technology to assist medical practitioners exchange patient data. Merck’s experimented with the technology to access patient data and understand the causes of certain conditions. Also, IBM and Walmart already have blockchain pilot programmes underway to trace food safety, reported Tech Republic.