At a recent gathering of the ysura Innovation Circle, pharma executives as well as outside specialists discussed and debated the place of Blockchain in the pharma industry. The overall consensus was that most business models that use Blockchain do not actually gain any benefits from it – except possibility additional press coverage. Yet there are exceptions.
A common misconception about Blockchain is that it is about encryption. In fact, the opposite is true. Blockchain is by definition unencrypted, so that multiple parties can read and share the same data. If one party tries to change past information in the Blockchain, the other parties will detect this and disallow the change. The most logical cases for Blockchain, therefore, are systems where multiple parties need to share data yet don’t trust each other. Put another way, Blockchain creates a single indisputable source of truth.
The pharma supply chain represents a very good use for Blockchain. It is estimated that between 8 and 10% of all pharmaceutical products are counterfeit, causing a loss of revenue and reputation for the pharma industry, not to mention a loss of life for patients who are treated with counterfeit medicine. Several companies, including SAP, have launched a pharma supply chain application based on the Blockchain. This ensures that all parties involved in the pharma supply chain can track and trace their work and ensure that nothing will be electronically manipulated.
The insurance industry has formed an initiative known as B3i. This reduces friction between insurers, re-insurers and brokers. It also removes any doubt as to which version of an insurance contract is the correct one and reduces insurance fraud.
Another area of exploration is the use of Blockchain in patient health applications, in particular to ensure that there is a single source of truth in the patient’s health records. While Blockchain may ultimately play a role here, other hurdles are holding back the adoption of such an electronic patient health record. However we predict that if the public health insurers and the health industry in general continues to stifle such innovation, the patients will take control themselves, working together with innovative hospitals and doctors until the public health insurers have no choice but to recognise the value of the electronic patient health record.
The Blockchain and pharma discussion is only just starting. Stay tuned for more insights and news.