Implementing Blockchain for Improved Pharmaceutical Transparency and Efficiency in Supply Chain Management

Abstract

Pharmaceuticals supply chain is a clearly defined network that is under pressure from a variety of issues, for example counterfeits, inventory, regulatory, and supply chain opacity. The current key challenges include a centralized model, trust, transparency, risk and security which have led to the consideration of Blockchain technology for solving these problems. This thesis aims at establishing the utility of block chain technology in the increase of transparency and traceability and reduction of the risks in pharmaceutical supply chains. It considers the use of the technology in the fight against fake drugs as well as managing drug stocks, other processes such as compliance and additionally, endears authority and investors. The study uses a literature review followed by case study analysis and simulated prototypes to show how blockchain can be applied to pharmaceutical supply chain, the feasibility of which is proved. Main conclusions suggest that the decentralization of records provided by the blockchain system can effectively monitor drug distribution from the manufacturers supply chain to the end consumer making it easier to eliminate fake medications. In addition, applying smart contracts can help automate such actions as order approval and payment realization, which can misfire anyway. Due to its general features, Blockchain also helps organizations work with compliance by creating compliance audit checklists and maintaining records that cannot be altered, thus saving time and resources that would otherwise need to be spent repeating compliance reports manually. Current papers and articles feature real-life pharmaceutical companies, including Pfizer, Novartis, and Boehringer Ingelheim, and demonstrate their best practices in the use of blockchain and the corresponding benefits for drug traceability and risk reduction. For example, Pfizer‘s engagement with the MediLedger consortium has shown how blockchain can achieve compliance, for example with the DSCSA while Novartis and IBM has shown how the sharing of real-time data can improve supply chain performance. These examples underscore the need for harmonization and synergy involving blockchain together with other systems and involving all players in the supply chain. Hence, the blockchain application for improving the pharmaceutical supply chain carries certain limitations including scalability constraints, high cost of implementation, and the GDPR related restrictions on personal data management. In order to overcome these challenges, this research offers the following recommendations. Some of these priorities are pilot projects, deploying blockchain with new technologies such as IoT and artificial intelligence, and improving the awareness level and cross-industry cooperation among stakeholders by engaging in industry partners’ associations. Further, it is possible to partially address these issues with the help of the use of partially public blockchains and such improvements in consensus algorithms as PoS and sharding. This thesis affirms that blockchain technology will add value to the pharmaceutical supply chain since transparency, fraud and efficiency will improve. However it takes black and white cooperation, proper and effective regulation and dealing with technical issues. This research focuses on the practical approach that can realize the most of blockchain potential in pharma industries and improve supply chain accessibility, reliability and safety.