Under pressure to tighten supply chain, drug companies look to blockchain

Drug companies are increasingly experimenting with promising but unproven blockchain technologies as they work to tighten the pharmaceutical supply chain. AmerisourceBergen and Merck plan to expand a test project completed last year that tracked the ownership of drugs moving through the health care supply chain.

Drug companies are increasingly experimenting with promising but unproven blockchain technologies as they work to tighten the pharmaceutical supply chain. AmerisourceBergen and Merck plan to expand a test project completed last year that tracked the ownership of drugs moving through the health care supply chain. The new test will increase the number of drugs and perform more complex transactions, says Dale Danilewitz, chief information officer at Amerisource. The drug distributor wants to streamline the verification of drugs that a retailer or hospital returns to the company, according to Danilewitz. Some returns can be resold if their history can be verified. "Blockchain is such a natural fit for that kind of capability," Danilewitz notes. The pharmaceutical industry is facing increased pressure to meet new regulations that go into effect starting in 2019. The Drug Supply Chain Security Act calls for an electronic system to track and trace certain prescription drugs in the United States as they move from manufacturers to distributors, health-care providers, retailers and patients. Blockchain looks promising to drug companies as a neutral ground to share data that would help them comply with the regulations. The idea is that by uploading data onto a blockchain, participants can track the products as they are bought, sold, or otherwise moved between manufacturers, distributors, doctors, and pharmacies.