Pharma giant Merck is seeking a patent for a blockchain-based system to track objects as they navigate through the supply chain.
The nature of a blockchain system ensures that records are essentially immutable, and when employed in a supply chain, restricts the opportunity for fraudulent activities. GlobalData believes that blockchain technology will prove an invaluable tool for confronting the rise of counterfeit drugs in the global market.
Merck began to explore the applications of blockchain in 2016, when associate director of product management and applied technology at the pharmaceutical giant, Nishan Kulatilaka, speculated that after financial services “healthcare could potentially be the second-biggest industry to adopt blockchain technology.”
The potentials for blockchain to shake up the healthcare industry have been recognised for some time, and GlobalData believes that blockchain-based systems will begin to materialise in the healthcare industry in 2018.
Why Merck blockchain use?
According to a 2015 OECD report, counterfeit goods accounted for 2.5% of the global pharmaceutical trade in 2013 and global pharmaceutical sales reached $1.1 trillion in 2015.
The OECD deduced that the counterfeit pharmaceutical industry is worth in the region of $200bn annually, which is only marginally less than the $246bn illicit drug trade.
GlobalData believes this report highlights the drastic need for improvements in supply chain security and accountability.
Beyond its potential use within supply chain security, blockchain is anticipated to provide a secure and convenient mechanism of data transfer between patients and healthcare providers.
Opportunities and concerns of using blockchain in healthcare
This month, US retail giant Walmart was awarded a patent for a blockchain-based system for the storage of medical records retrieved from wearable healthcare devices. The system will allow medical professionals to access medical data from patients who are unable to communicate.
The primary obstacles to implementing blockchain-based systems for data sharing within the healthcare industry are regulations concerning medical data, and the prohibitive cost of setting up a common distributed network.
For this reason GlobalData believes that although in the long term blockchain will revolutionise many aspects of healthcare on the patient level, the first applications of blockchain in healthcare will emerge in the supply chain, which is less resistant to change.