Blockchain in pharma

In the last couple of years, there has been a shift in perception when it comes to blockchain technology. Once thought of as being a synonym for cryptocurrencies, blockchain has gradually earned its place as an important emerging technology on par with artificial intelligence, big data and cloud computing. Exciting developments in recent years have attracted interest from various industries, with major and smaller players in those sectors exploring ways to utilize the technology to their advantage. One sector that seems primed for a blockchain-powered overhaul is the pharmaceutical industry.

Pharma problems today

The pharmaceutical industry is one of the most heavily regulated sectors of the global economy and for a good reason. Millions of people need life-saving drugs or other medication on a daily basis. Stringent rules and robust quality control procedures are needed to ensure that people are getting the drugs they need. Yet, counterfeiting is still a big problem, mainly due to the complexity of pharma supply chains and widespread use of outdated methods for record-keeping and documentation. A 2017 study by the World Health Organization (WHO) estimated that 10 percent of the medical products circulating in low- and middle-income countries are either substandard or falsified. These included medicines, vaccines and medical devices, the WHO said in the research.

Other areas that need to be improved across the industry include research and development (R&D), regulatory compliance and clinical trials.

How can blockchain help the pharma industry?

Our initial plan was to examine blockchain in pharma as part of an article on how the technology is being utilized across the broader healthcare sector. In the process of writing that piece, however, it became apparent that blockchain and pharma are such a great fit that their ‘collaboration’ deserves a deeper examination.

What makes pharma and blockchain such a great fit is that the very features that define the technology also make it uniquely positioned to address the biggest problems plaguing the sector today. Blockchain’s immutability, trustlessness and decentralized nature allow for developing robust solutions for the problem areas listed above. So let’s take a look at how blockchain can be used to improve the pharma sector

Speed up medicine tracking and verification processes

Some of the biggest challenges the pharma industry faces today stem from the complexity of its supply chains. Having so many parties involved hinders cooperation between stakeholders, the traceability of medicines and the verification of their authenticity. This, in turn, heightens the risk of bad actors influencing the supply chain and lessens efficiency in performing routine processes.
With blockchain in pharma, navigating this tangled web of manufacturers, wholesalers and retailers can be simplified considerably. One of blockchain’s core advantages is that it is extremely good at facilitating peer-to-peer networks that allow different stakeholders to easily communicate with each other. Stakeholders in such systems can be drug manufacturers and their suppliers, but also payers, providers, pharmacies and patients.

Furthermore, blockchain-based networks allow for efficient collaboration between competing businesses towards a common goal such as implementing and upholding industry standards or eradicating fraud across the industry. Even better, such collaboration does not require the stakeholders to give up control over their sensitive data. Instead, once the stakeholder’s data has been mathematically verified, it is stored on the blockchain in an encrypted state.

Protection against forgery of records

Being able to easily collaborate and communicate with other stakeholders is a step in the right direction, but that alone is not enough to eliminate the risk of fraudulent actions. For example, bad actors could still try to insert themselves into the supply chain by impersonating stakeholders, falsifying records, forging documents or copying protective measures such as stamps and barcodes. Fortunately, blockchains come with baked-in defenses that render such tactics useless. Not only are the members of a blockchain network verified through their unique cryptographic signatures, but any records stored on the blockchain are unalterable due to another core characteristic of the technology – its immutability. The cryptographic principles underpinning blockchain and other distributed ledger technologies (DLT) guarantee that for a member to be able to alter a record stored on a blockchain, he or she must control at least half of the network’s computing power. This essentially means that fraud attempts can be easily detected on the network. Just as crucially, the immutability of the ledger also means that stakeholders have the means to provide easily verifiable information to regulators and other relevant authorities.

Boost research and development

Blockchain in pharma can be beneficial to R&D in a number of ways. For starters, because of its ability to facilitate frictionless communication among multiple stakeholders, blockchain could markedly improve collaborations between industry, academia and other organizations involved in the R&D cycle. The technology could also facilitate better communication between companies when it comes to patents and licensing. Additionally, license and other IP agreements could be handled via smart contracts.

IIn combination with other emerging technologies such as artificial intelligence and machine learning, blockchain in pharma could also improve data mining and analysis of information in published and newly generated research. Another important application of the technology is for ensuring patient privacy and data protection during clinical trials. This could help convince more people to take part in clinical studies.
Finally, the technology could even enable virtual trials, in which people receive their medications at their homes.

How can blockchain be implemented in the pharma industry?

Having explored the potential benefits of blockchain for pharma in a more general sense, we can now take a look at some concrete examples of how the technology can be – and is being – implemented across the industry.

Drug provenance verification systems

We already discussed what makes blockchain such a great tool for verifying drug authenticity and eliminating fraud across a pharmaceutical supply chain. And the industry has been paying attention. According to a 2017 survey conducted by industry non-profit organization Pistoia Alliance, nearly 70 percent of pharmaceutical and life science leaders saw blockchain having the greatest impact in that area.

Not surprisingly, solutions utilising the technology in this way are already being developed. One such project, MediLedger, aims to improve the safety, privacy and efficiency of pharma supply chains. MediLedger’s first product is a blockchain-based verification system designed to speed up the process of verifying the authenticity of returned saleable drugs. Speeding up that process which can take up to 48 hours with traditional verification methods, allows for returned drugs to be quickly put back into commercial distribution.

Launched by California-based start-up Chronicled in 2017, the MediLedger network counts industry leaders such as Pfizer, Gilead and Amgen among its members. Currently, MediLedger is working on utilizing blockchain technology to track, trace and record how drug shipments travel across an entire supply chain. Blockchain in pharma enables such a system to automatically flag potential problems without requiring stakeholders to share their confidential data.


Due to the enormous significance of pharma for public health, authorities and regulators enforce stringent rules and requirements on the industry. This is especially true for developed economies. Among the rules industry players must comply with are various serialization regulations around the world. These regulations require individual units of drugs, as well as packaging units, to have unique identification. In addition, various details about the product, including its origin, logistic route, etc., must be shared with all supply chain partners that facilitate the delivery of the drug to the patient.

Blockchain technology can boost the industry ability to comply with these regulations. Furthermore, due to the immutability of the decentralized ledger, the information stored on the blockchain is readily available for regulatory auditing.

Clinical trial data management

An important part of the pharma sector, clinical trials aid the drug discovery process and other medical R&D activities. Finding the most efficient way to manage and analyze the data from these studies presents a significant challenge for the industry. Just as crucially, companies often fail to ensure that clinical trial patients have proper privacy protection.

The privacy issue partly stems from the fact that conducting clinical trials currently involves a lot of intermediaries. The clinical trial data is often collected by companies whose main business is to sell that data to interested parties. The problem arises, when a buyer decides to resell the data to another company, infringing on patient privacy and failing to give the patient a cut from the resale.

Companies are now trying to solve these challenges with the help of blockchain. Nebula Genomics, a company based in Boston, Massachusetts, is working on utilizing the technology to help improve genome sequencing. The company is building a genetic database aimed at eliminating unnecessary middlemen and helping patients to safely sell their encrypted genetic data.

Another company currently working in this field is Encrypgen. The Florida-based firm has developed a blockchain-based platform that facilitates genetic data sharing, storage, selling and buying.

At Chainsus, we’ve had the opportunity to work on a similar project in this field.


Our examination of the pharmaceutical industry clearly shows that blockchain technology can have a profound impact on the industry. From optimizing existing supply chain processes through ensuring compliance with regulators to supporting future discoveries, the potential applications of blockchain in pharma are numerous. Many of them are already being realized across the industry, while companies are coming up with more and more use cases for the technology.

If your company operates in the pharma space, we’d love to hear your ideas for utilizing the technology. Take advantage of our consulting services and our considerable experience in blockchain development to turn your vision into reality. You can contact us at…

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