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3 Key Insights on Blockchain-Enhanced Pharmaceutical Serialization
Roche, Merck, Pfizer, and others have explored its use but will blockchain’s benefits outweigh the hurdles? Two experts weigh in.
6 Min Read
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What is the state of blockchain-enhanced serialization in the pharmaceutical industry for unit-level product tracking and tracing requirements? What are the benefits and challenges to implementing it as opposed to other technologies? Packaging Digest asked two pharmaceutical packaging experts in the below Q&A:
Bob Celeste is founder of the nonprofit Center for Supply Chain Studies (C4SCS); executive director of Open Credentialing Initiative formed by pharma trading partners, vendors, and standards organizations; and facilitator for the public/private Partnership for DSCSA Governance dedicated to advancing the effective tracing and verification of US prescription pharmaceuticals. (DSCSA stands for the FDA’s Drug Supply Chain Security Act.)
Dave Treadaway is a partner at Clarkston Consulting, a global business consulting firm, with more than 25 years of experience in, among other things, pharmaceutical serialization.
To what degree is blockchain-enhanced serialization emerging in pharma, specifically for biopharmaceuticals? Are any Big Pharma companies on board with it?
Celeste: We [at the] Center for Supply Chain Studies ran a study several years ago with industry stakeholders to explore if and how blockchain could be used to support DSCSA compliance (specifically tracing). These answers stem from that study and 24 years of working with the industry on pharmaceutical serialization and traceability.
The industry looked at blockchain a few years ago. There is no supply chain-wide implementation of blockchain. Some individual solutions have used blockchain in their back end, but those solutions still need to communicate with their peers through more standard methods.
The industry-agreed method of exchanging serialized data is the GS1 EPCIS Standard. Blockchain is a small part of the cross-ecosystem company identity aspect of Authorized Trading Partner proof through digital credentials.
Treadaway: 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, GSK, 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.
What are some key benefits of blockchain-enhanced serialization over and above those of other serialization technologies?
Celeste: Shared development. We explored using joint industry-created Smart Contracts to manage the transfer of serialized pharmaceuticals and tracing. Using the same code set could be efficient for all stakeholders.
Immutability (for a time). [Editor’s note: See Celeste’s answer to the next question.]
Nonrepudiation. Being able to trust a transaction on the blockchain.
Treadaway: 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.
What are the challenges and solutions of implementing blockchain-enhanced serialization?
Celeste: The supply chain and the solutions used are decentralized. Although technically decentralized, blockchain represents a central data set. Drug tracing is a lot like a phone book; either everyone is in, or the phone book has less value. We couldn’t see the entire supply chain agreeing to use a single blockchain [for these reasons] ...
Trust and control: Storing data with a high degree of business intelligence outside the corporation’s four walls was a hard sell.
Protecting confidential information. Not every stakeholder may see the data associated with a particular product.
DSCSA and Stakeholder requirements sometimes contradict blockchain technology principles.
Although immutability sounds attractive, corporate data retention policies usually indicate that data needs to be removed from service at some point. In the DSCSA ecosystem, that point is six years from creation and an additional six years if there is an investigation.
The performance of blockchains wasn’t near that required of the supply chain.
Treadaway: 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.
What impact will DSCSA likely have on blockchain-enhanced serialization in the US pharmaceutical industry?
Celeste: DSCSA is a law negotiated by industry stakeholders, regulators, and legislators. As a result, it doesn’t always align with the design principles of blockchain or any other technology.
For example, the legislation contains confidentiality clauses that would be difficult to implement in a blockchain environment.
Also, there are subtle differences in the requirements for each role in the supply chain, and stakeholders often perform multiple roles, making it difficult to determine which role they played as the product moved through their operations.
Instead of settling on one type of technology, such as blockchain, the industry has settled on a handful of technologies, standards, and specifications to meet their needs.
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