Proof of concept shows blockchain could save lives in pharmaceutical logistics

Blockchain could reduce the number of people who die from the use of counterfeit medicines, a project by DHL and Accenture has proved.

The distributed ledger technology is best known for its role in enabling bitcoin to become a reality, but it could revolutionise sectors outside finance.

To this end, logistics giant DHL, in partnership with Accenture, has completed a proof of concept for blockchain’s use in the pharmaceutical supplies sector, and DHL has said it was a success.

The project saw the companies apply blockchain technology to track pharmaceuticals from their manufacture to their prescription to patients. This is important because, according to Interpol, about one million people die each year as a result of counterfeit medication, which makes up an estimated 30% of pharmaceutical products sold in emerging markets.

Keith Turner, CIO chief development office at DHL Supply Chain, said: “By utilising the inherent irrefutability within blockchain technologies, we can make great strides in highlighting tampering [with medicines], reducing the risk of counterfeits and actually saving lives.”

Blockchain creates records of transactions that are tamper-proof and are accessible by stakeholders, which in the pharmaceuticals industry includes manufacturers, warehouses, distributors, pharmacies, hospitals and doctors.

The technology also has massive processing capacity. Simulations done by DHL and Accenture found that blockchain could handle more than seven billion unique serial numbers and 1,500 transactions per second.

“The experiments with blockchain in finance are well known, but we believe logistics is an area where the technology will have a truly profound impact,” said Matthias Heutger, senior vice-president, customer solutions and innovation at DHL. “However, implementing productive solutions will require further technological development and, critically, collaboration between all stakeholders.”

There are other examples of blockchain’s use in logistics, where the technology can track and trace the chain of custody between different parts of a supply chain. Because everyone in the supply chain can view and trust the transactions posted, blockchain can reduce the time required for reconciliation and enable faster processes.

For example, IBM and Danish shipping giant Maersk are using blockchain to digitise transactions in the global shipping industry, which is a huge market, with about 90% of the world’s trade carried by sea.

They have applied the technology to enable transparent and real-time exchange of supply chain events and documents. Each participant in the trade can view the progress of goods through the supply chain – including the status of customs documents, bills and other data – but no one can modify or delete records without the consensus of others in the network.

Shipping supply chains traditionally rely on the physical movement of paper documents, making fraud, human error and inadvertent delays more likely. ............................................................................. ......................................................................................