For years, Big Pharma, insurers, and healthcare systems have been the target of an unrelenting wave of criticism: Price gouging. Questionable clinical trials. Misleading advertising. Bias in medical prescriptions and coverage. Suppression of small-market life-changing breakthroughs in favor of mass-market cures of convenience. These concerns may explain why the 2017 Edelman Trust Barometer study reported that 80% of consumers think that the industry prioritizes profits over people.
Now, pharmaceutical sourcing and distribution services companies are also in the spotlight, accused of distributing drugs to pharmacies and doctors who prescribed them to patients with no legitimate need. Even though many people view this as another reason to doubt the industry, I’ve come to realize that this is not a misdeed of greed. It’s more about a lack of transparency, accountability, and trust across the pharmaceutical supply chain.
Clearly, the industry’s supply chain problems are complicated, multifaceted, and highly visible. Yet some experts argue blockchain technology may be the shot in the arm the healthcare industry needs to operate with solid compliance and ultimately restore consumer trust. And believe it or not, sourcing and distribution services companies may be the best place to get started.
Three immediate blockchain opportunities hidden in a time of crisis
“When written in Chinese, the word ‘crisis’ is composed of two characters – one represents danger, and the other represents opportunity.”
– John F. Kennedy
In times of crisis, opportunity is always waiting to be realized. For years, blockchain has been debated across the healthcare industry as a possible game-changer. However, no significant, committed movement to recognizing its value has been taken. But perhaps this supply chain crisis will finally ignite decisive action around the technology.
According to the Deloitte study “Blockchain: Opportunities for Health Care,” blockchain has the potential to enable nationwide interoperability. Although this digital distributed ledger is not a miracle solution by itself, it does use specialized algorithms to validate and authenticate transactions within a decentralized architecture in real time and protected by digital encryption.
Defined by a ubiquitous, secure network infrastructure; verifiable participant identification and authentication; and consistent representation of authorization to access information, blockchain can immediately impact three major areas of the pharmaceutical value chain:
- Pharmaceutical companies: Blockchain technology provides real-time access to data and visibility across the pharmaceutical supply chain, including the point of dispensing prescriptions to patients. Pharmaceutical companies can also leverage the technology to transform key processes such as charge-backs and rebates, as well as engage the use of smart contracts to accelerate negotiations and transactions with wholesalers and distributors.
- Clinics and hospitals: A strong foundation of trustworthiness and sound practices are very important to patients. Blockchain enforces these values by enabling proactive, real-time response to events that can directly and indirectly impact patient outcomes such as medication and medical device recalls.
- Pharmacy and retail partnerships: With access to real-time data, pharmacies and retailers can improve the efficiency of their supply chains by tracking product movement and monitoring in-store and in-transit inventory.
A healthcare revolution of transparency, accountability, and trust
Immutable, time-stamped, tamper-proof, and accessible, blockchain is a no-brainer opportunity to resolve significant issues of the pharmaceutical supply chain. More important, it could raise the value of sourcing and distribution services companies in the eyes of their direct customers and indirect consumers.
If done well, the ultimate promise of blockchain for the healthcare industry can be realized when hospitals, clinics, pharmacies, and other organizations adopt the technology and support it with the proper technical infrastructure. The blockchain will grow in short order in terms of participants and transactions – building a chain of transparency and accountability to restore consumer trust in healthcare once and for all.
For more on digital transformation in healthcare, see Transform Healthcare With Future-Facing Technologies.