FDA Picks IBM, Walmart & Others for Blockchain Medication-Tracking Program

The U.S. Food and Drug Administration (FDA) has tapped IBM, Walmart, Merck and KPMG to participate in a pilot project using blockchain technology to build a digital, interoperable network to monitor the country’s prescription drug supply chain.

The companies announced the move this morning, in what amounts to a major vote of confidence in blockchain and its ability to shed light on the movement of prescription drugs and vaccines throughout the country. The blockchain network is designed to fulfill mandates of the U.S. Drug Supply Chain Security Act, potentially improving business operations, data sharing and drug quality, according to the news release.

“Blockchain could provide an important new approach to further improving trust in the biopharmaceutical supply chain,” Mark Treshock, IBM Global Solutions Leader for Blockchain in Healthcare and Life Sciences, said in a statement. “Blockchain has the potential to transform how pharmaceutical data is controlled, managed, shared and acted upon throughout the lifetime history of a drug.”

Participants hope the blockchain pilot will enable better inventory tracking, easy and quick access to distribution data, more robust data sharing among stakeholders and greater insights into the integrity of prescription medications — right down to whether the drugs are stored at proper temperatures.

How the FDA Blockchain Pilot Works

The initiative is meant to help all stakeholders in the drug supply chain, including the FDA, to create a digital, interoperable network responsible for identifying, tracking and tracing prescription medications across the supply chain. If all goes as planned, these efforts will manifest in a shared permissioned blockchain network capable of real-time monitoring.

The beauty of blockchain is that the technology is immutable, meaning data cannot be erased. Any addition of information gets noted in the ledger. As IBM, Walmart, Merck and KPMG noted, these characteristics mean that blockchain creates a “permanent record.”

That would satisfy the requirements of the U.S. Drug Supply Chain Security Act, which Congress enacted in late 2013. The law puts forth measures to create a system to track certain kinds of prescription drugs as they move through the nation.

Government officials hope the pilot project will uncover best practices for stakeholders. The campaign could also pinpoint technical features necessary to trace and verify drugs and electronically share data.

Using Blockchain to Monitor Prescription Drugs

IBM, Walmart, Merck and KPMG noted that blockchain may be integrated with current supply chain technologies, potentially making the migration less of a headache for prescription drug stakeholders.

“The ability to leverage existing cloud infrastructure is making enterprise blockchain increasingly affordable and adaptable, helping drug manufacturers, distributors and dispensers meet their patient safety and supply chain integrity goals,” said Arun Ghosh, KPMG’s blockchain leader, in a statement.

IBM, KPMG and Walmart come to the table with experience using blockchain technologies to track their products.

Walmart, for instance, has completed “successful” blockchain network pilots for goods such as pork, mangoes and leafy green produce, according to the retailer. Karim Bennis, Walmart’s vice president of strategic planning and implementation for health and wellness, said his customers want to know that they can trust what they buy — including even the non-prescription ingredients for a meal.

“We are looking forward to the same success and transparency in the biopharmaceutical supply chain,” Bennis said in a statement.

Ultimately, participants hope, a stronger view into the drug supply chain will better serve patients and each company’s standing.

“Reliable and verifiable supply helps improve confidence among all the stakeholders — especially patients — while also strengthening the foundation of our business,” Craig Kennedy, senior vice president of supply chain at Merck, said in a statement.

A Blockchain Use Case in Healthcare

As little as two years ago, health-tech innovators and clinicians criticized healthcare’s blockchain evangelism for a lack of use cases. But the tide seemed to turn throughout 2018 and into HIMSS 2019, when innovators such as IBM launched blockchain projects and healthcare leaders noted that blockchain was beginning to show value in the space. The Icahn School of Medicine at Mount Sinai, for instance, launched a biomedical blockchain center just under a year ago, following a similar step by Mayo Clinic.

The FDA’s pilot could further progress the implementation and adoption of blockchain in healthcare. But it could also spotlight unforeseen problems where there was once only unbridled hope or skepticism.

The blockchain pilot is slated to end in the fourth quarter of this year. Afterward, the FDA will publish results, and participants will consider their next moves.

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