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SAP Develops Blockchain Solution for Pharma Supply Chain

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In enterprise blockchain news, German-based European multinational software corporation SAP announced last week that it has launched a blockchain supply chain tracking system for drug management.

It indicated major pharmaceutical companies to include Boehringer Ingelheim AG & Co KG, GlaxoSmithKline Plc, and Merck Sharp & Dohme to be involved in the development of the software.

As per the news release, in keeping with US Drug Supply Chain Security Act (DSCSA), wholesalers must verify prescription drugs that are returned and intended for resale. The company hopes that its initiative will protect an estimated USD 7 billion worth of returned drugs annually to the US alone.

The system is said to be designed to monitor and authenticating pharmaceutical products along the supply chain for drug wholesalers. It uses blockchain to store encoded data from the drug products which can be correlated in real-time by comparing the barcode data at any point of the supply chain.

The aim is to create an effective system that weeds out counterfeit drugs from the supply chain during drug return. Plans to scale up the system to tackle a wider range of pharmaceutical supply chain processes are also being discussed, the news outlet said.

Pharmaceutical giant Merck had reportedly been eying blockchain since 2016. At the time, Nishan Kulatilaka, Associate Director of Product Management and Applied Technology at Merck, opined that after financial services “healthcare could potentially be the second-biggest industry to adopt blockchain technology”.

According to another report quoting OECD data in 2015, the “counterfeit pharmaceutical industry is worth in the region of USD 200 billion annually, which is only marginally less than the USD 246 billion illicit drug trade”. This alone provides a reasonable logic for entrants into the blockchain ecosystem to provide security to the pharmaceutical drug supply chain.

Like every other cutting edge technology in use today, blockchain has also found its earmark in medicine. It’s been found to be useful in preserving patients’ data integrity, providing transparency within the sector, and as an effective tool in supply chain management.

In December, the US Department of Health and Human Services had secured an authority to operate (ATO) order to develop a procurement system that leverages blockchain and AI. The system dubbed HHS Accelerate was designed to streamline the acquisition power of the department. However, Jose Arrieta, HHS Associate Deputy Assistant Secretary for Acquisition was quoted by a news outlet saying “…this just isn’t a model for acquisition”, implying that they would explore other areas of applicability for the model within the department and possibly layer it on other legacy systems.

Other major medical corporations continue to explore new ways in which blockchain’s potential can be maximized in the medical field such as using blockchain to validate and establish credibility for data integrity.


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