Clarkston Partner Dave Treadaway Shares 3 Insights on Blockchain-Enhanced Pharmaceutical Serialization
November 12, 2024 | Clarkston partner, Dave Treadaway shares 3 insights on blockchain-enhanced pharmaceutical serialization. View an excerpt below and the full article here.
3 Key Insights on Blockchain-Enhanced Pharmaceutical Serialization
Q: To what degree is blockchain-enhanced serialization emerging in pharma, specifically for biopharmaceuticals? Are any Big Pharma companies on board with it?
Big pharma has been kicking around the idea of using blockchain-enhanced serialization for quite a few years. Looking back as far as 2017, there are examples of companies starting to explore the use of blockchain in supply chain operations for tracking and tracing products.We saw a lot of investment in blockchain pilot projects and exploratory cases pre-pandemic. But with COVID, companies were forced to redistribute priorities to focus on getting product out the door. Supply constraints are only just now starting to show some easing, so companies have been refocusing efforts on next-generation technologies, like blockchain.
I can’t say that I know of major pharma companies who have fully implemented a blockchain program, but we have quite a few examples of companies that have launched pilot programs. Companies like Merck, Pfizer, Roche, GSP, and Novartis have all explored the use of blockchain for various applications across the supply chain. Outside of the pharmaceutical industry specifically, serialization solution providers have also begun pilot programs and initiatives to incorporate blockchain into their solution, with Tracelink being a key example in the serialization technology space. As other serialization providers take note, it’s likely that we’ll see more providers start to incorporate blockchain into their offerings as well.
Q: What are some key benefits of blockchain-enhanced serialization over and above those of other serialization technologies?
Serialization technologies have grown tremendously in recent years, and they continue to develop and add new capabilities for pharmaceutical companies. And for some companies, these serialization technologies will still make the most sense for their business, regardless of the benefits blockchain might pose.
That said, blockchain-enhanced serialization has a number of tremendous benefits that are hard to ignore. Above all else, the blockchain is completely immutable and tamper-resistant, making it essentially impossible for manipulation by a third party once the data is recorded. This immutability isn’t something that all serialization technologies can necessarily assure like the blockchain.
The decentralized nature of the blockchain also reduces the risk of an attack or outage by distributing data across the entire network of nodes, creating a more robust defense against nefarious parties. Outside of the significant security benefits, the blockchain also allows the use of smart contracts, which can be used to reduce administrative burden through automated transactions. In automating these processes, blockchain-enhanced serialization also stands to significantly increase efficiency and speed in the supply chain.
Q: What are the challenges and solutions of implementing blockchain-enhanced serialization?
Like many advanced technologies, blockchain promises a lot of benefits but there are substantial challenges to implementing it for serialization, which is likely why we haven’t seen large-scale blockchain-enhanced serialization projects on the market. Interoperability across the supply chain is a critical challenge currently as there is a lack of standardization within the industry in terms of protocols, data, and processes that would limit collaborative potential.
For the blockchain to be effective, all parties on the supply chain must adopt it — from manufacturers to distributors and retailers. This scale of collaboration and shared buy-in is complex to manage, to say the least. Adding to that, many companies operate on legacy systems that would either require intense customization or a full upgrade to adequately interface with the blockchain.
The scale and performance required of the blockchain is also an issue — even outside of the life sciences space, we haven’t really seen a wide-scale, global use of blockchain technologies outside of the financial industry and somewhat within the food space. So, there is limited experience with the blockchain handling billions of transactions concurrently and efficiently.
Lastly, the blockchain, though not necessarily new, is an advanced technology with which few companies or people have experience. Finding the right resources with the specialized knowledge to implement a blockchain system at scale, train staff, and coordinate collaboration is increasingly difficult.