Blockchain Healthcare | Pharmacy 13 | Hashed Health

Distributed Pharmacy Solutions

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Blockchain Approaches to the Pharmaceutical Space

A recent article dubbed the patient as the health care system’s “free labor.” It is the patient or a caregiver who most often bears the burden of navigating inefficient and non-cooperative transacting entitles. “But American medicine demands another scarce resource from patients, and that is their time. The time it takes to check in on the status of a prescription, to wait for a doctor, to take time away from work to sit on hold and hope that, at some point, someone will pick up the phone.” (1)


Nowhere is this more true than in the pharmaceutical space, where the filling of a prescription can often involve byzantine checks and cross-checks to ensure availability, amounts and price of a given medication. Beyond this, and often invisible to the patient, is the tortuous route that medications take before they arrive at the pharmacy itself. The myriad of participants across the value chain, and the storm of administrative transactions required to deliver a drug to a patient’s hands, all contribute to the labyrinthine behemoth that is now a trillion dollar global industry.


Serialization and Track & Trace

If you live in the pharma space, then you’re familiar with the 2013 Drug Supply Chain Security Act (DSCSA). This law intends to increase patient safety by mandating full supply chain traceability for prescription drug dispensing in the U.S.  Serialization is the process of assigning a unique, traceable fingerprint to individual salable units. To the outsider this might sound easy, but it results in a massive increase in data management activities for members of the supply chain. To deal with this problem, many vendors are currently providing end-to-end solutions that attempt to provide pedigree and transparency to the transaction history of these items which is made challenging by a complex supply chain of aggregation and segregation processes. Evolving regulations further complicate attempts at provenance tracking and serve to challenge legacy systems.


Blockchain / DLT could enhance drug safety by improving counterfeit drug surveillance. The peer-to-peer network could help guarantee the validity of the drug and its transaction history, while creating a shared ledger of ownership from the source of the product to the patient. Blockchain-enabled IoT solutions are maturing rapidly and will play an important role in securing and scaling activities around registration, verification and ownership of product. IoT is also where new applications for wearables come in to play.  The blockchain can act as a distributed ledger for pharma outcomes data generated from wearable and home monitoring devices. Such a system would more easily evolve to meet the demands of a global, evolving regulatory environment.



Contractual and Prescription Management

The contractual (and payment) agreements which enable the movement of medications across the supply chain are complex in the extreme. Multiple entities have a role in the delivery of medication to the patient’s hand: the prescribing physician, manufacturer, wholesale distributer, any one of a variety dispensing pharmacies, and the payor or pharmacy benefit manager (PBM). The movement of a single lot of medication or the writing of a prescription triggers a dizzying array of administrative transactions to manage the contractual and payment terms between all these entities.


Blockchain-enabled solutions that streamline the exchange of data among and between contractual parties in this complex value-chain would enable needed efficiencies. Rather than independently collecting and reconciling data related to contractual terms and obligations, transacting parties would be able to share contractual updates via a shared transactional ledger that is jointly operated by the network of players in the value-chain. Permissioned blockchain protocols like Hyperledger’s Fabric can enable enterprise essential features, such as confidentiality around contractual terms.


Clinical Research

Drug discovery and drug response data is the lifeblood of the pharmaceutical industry. “In the United States, it takes an average of 12 years for an experimental drug to travel from the laboratory to your medicine cabinet. That is, if it makes it. Only five in 5,000 drugs that enter preclinical testing progress to human testing. One of these five drugs that are tested in people is approved.” (2) The maze of preclinical and clinical trials requires tremendous resources, coordination and adherence to an array of regulatory and oversight requirements.


Like many business processes, even one as vital as clinical coordination is fragmented between manufacturers, clinical research organizations, participating clinicians and trial participants. Blockchain solutions can serve as a single source of truth for these parties, verifying a range of data vital to the process including IRB approval, patient informed consent, participant recruitment, transparency of trial outcomes and audit of clinician payments. The efficiencies gained by moving disjointed processes onto the common transactional layer of blockchain has the potential to enhance the speed, safety and trust in the clinical trial process.



Genomics and Personalized Medicine

Genomics is the big data problem of our century. In a recent a16z podcast, Stanford professor of biomedical engineering Russ Altman describes the relationship between genetics and drug discovery / response. According to Altman, “it’s not just genetics information that matters; it’s also molecular, cellular, tissue, and other data about the whole organism.” Understanding the relationship between data from the PharmGKB database, a hospital EMR, wearables data, and other data sources (even Twitter according to Altman) will provide signals important to understanding what drugs do, how drugs interact, and new uses for old drugs.  A common view is that most people will have their genome sequenced at birth in the future.


If distributed ledger technologies prove to help with the ownership, security and confluence of fragmented data, then it could play an role in ensuring this kind of discovery and response work is done in a safe, scalable way.  The sharing of this data by entities must honor privacy concerns and the realization that the patient is the ultimate owner of the data as well as its use and access. In exchange for good stewardship, corporates can leverage improvements in interoperability, sharing structures, trust and provenance of the information they use for discovery and response.



Patient Access

While true of almost all prescriptions, and certainly for specialty medications, the process of delivering the medication to the patient is a complex, almost tortuous process. Multiple parties including the payer, the dispensing pharmacy and the manufacturer engage in multiple burdensome exchanges of information to determine the suitability and sustainability of a given drug therapy. These steps include but are not limited to benefits investigation, prior authorization or step therapy requirements, patient assistance determination, patient education, medication therapy management, prescription adherence tracking.


Currently these steps take place in isolation, often requiring repetitive collection of the same data and at great expense in time and patience on the part of the patient. Dialysis patients are usually on 15 – 20 different meds.  Patients commonly bring in all these medications in a bag for their monthly visits.  This currently represents the most reliable way to update the medication list inventory with their physician’s various systems (EMR, Practice Management System, ePrescribing, and often several other).  A series of blockchain enabled solutions would instead treat a prescription as a joint file, to be accessed and added to by the variety of players in the ecosystem with the goal of improving access and ease for the patient. Even further, by bringing the patient into this joint process as an active participant, the industry can benefit from a stream of patient reported outcome and adherence data which benefits manufacturers as well as the pharmacies that participate in programs such as Medicare Part D Quality Measures.


The Value Equation

This review of blockchain’s potential in the pharmaceutical space is wide-ranging by design. But its breadth highlights essential factors in successful proof-of-concept (POC) design and implementation. The suitability of blockchain for a given problem set is not purely a technical one. Other factors must be assessed including the level of investment in current technical solutions, business relationships among transacting parties in the space, and the regulatory regime governing the movement and stewardship of data. For example, it is difficult to imagine how a shared medication list in the use case above can be optimally managed in the current regulatory environment.  In the end, the final value calculation must include both the potential improvements of blockchain enabled systems but also the costs, financial and otherwise, that would be required.


Hashed Health fully expects that some market participants may not see value in the same POC solution that others may be eager to adopt. We are also actively exploring POC projects outside the particular configuration of healthcare delivery, payment and regulation that we have in the United States.






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