From The Editor | April 15, 2019

Sub-Second Blockchain Verification: Next Up, CDMO Interoperability?


By Louis Garguilo, Chief Editor, Outsourced Pharma

Blockchain nodes[1] copy

Last we met Susanne Somerville she was speaking at Outsourced Pharma San Francisco, at an outstanding session on “Blockchain And Your Supply Chain.” Somerville was also featured in our editorial, Big Pharma Moving The Blockchain Needle.

More recently, while still leading the MediLedger Project – a biopharma-industry working group (including Genentech, Gilead, Pfizer) for the study of blockchain implementation – she was named CEO of Chronicled, a blockchain/supply-chain solutions company.

I caught up with Somerville for an update on blockchain, particularly vis-à-vis CDMO participation. We started by talking about what will become one of the fastest applications of blockchain technology in our industry.

Sub-Second Verification

Susanne Somerville
Somerville surprises me with this statement: “Today, no one is capable of sub-second drug verification, but they need to be soon.”

She’s discussing this November’s deadline for the implementation of the Drug Supply Chain Security Act (DSCSA). Biopharma manufacturers will be required to verify for wholesalers (and others) the authenticity of “salable returns” when drugs are returned or recalled.

Some estimates are of 60 million units a year that will need to be verified. The verification process has been defined mostly by the Healthcare Distributor Association (HDA), the national organization representing primary pharmaceutical distributors. Accordingly, wholesalers/distributors will need to verify product identifiers, serial and lot numbers, and expiry dates.

“Now it’s up to solution providers to build out against those requirements, and for biopharma companies to implement them,” says Somerville.

“By our math, approximately two percent of all drugs in the United States are returned and resold. There are hundreds of large wholesaler warehouses across the country, with let’s say, 20,000 units returned each night that need to be verified. If this were a slow process, it could not work. So the objective came down to this calculation: ‘Can we verify and get an answer back sub-second?’”

Chronicled has already tested a “private-node to private-node” blockchain-like system. When a warehouse needs to scan items, it connects to its private node, which sends a message to another one where it needs to perform a check of the manufacturer’s repository. The answer comes via a return trip. “We’ve tested this back and forth, and depending on a few favorable factors, it’s as fast as 50 milliseconds,” says Somerville.

But how do you get a sub-second response among a 100-plus wholesalers asking 800-plus licensed manufacturers, working with 15 solution providers in the mix?

That testing comes next, starting in Q2, estimates Somerville.

“The cool part of this is the protocols are open,” she says excitedly. “So if an individual company or solution provider want to run it, they can.” (There are a number of solution providers somewhat similar to Chronicled, attempting their own rollouts to biopharma companies.)

But back to those 20,000 items accumulating in a single warehouse in a single night … and that “sub-second” requirement.

 “Yes, exactly,” says Somerville. “Without a network, or blockchain, or node solution – whatever you want to call it – that’s a lot of product stocked up along walls that cannot be moved. How can you handle that? That’s why this remarkable response-time requirement was handed down.

“You could say you guys are crazy. Is that even possible?” she continues. “But kudos to the whole biopharma industry. There was a lot of discussion on how to do it. What’s even better is this actually sets, in my mind, the framework of the entire industry’s ability to finally communicate interoperably. This is creating effective channels of how the industry is actually, in these beginning steps, going to be able to communicate with each other.

“I think a lot more interesting stuff can come from there, including for the CDMOs.”


Somerville says that once we have initial “interoperability,” there’s no telling what communications benefits will be available to the biopharma industry.

For example, in meeting the DSCSA regulation, there will be a form of  “authorized trading partners” who access data, in this case to confirm or deny that the product identifier is authentic. “But an even larger point is that potentially biopharma manufacturers and their CDMOs will also need to gain and allow such access.”

In the meantime, people are starting to talk more about how the technology might be applied specifically to drug substance and product, and the roles of CDMOs on the development end. At this very moment, though, this is not on the front burner, “with the more urgent activity going on with DSCSA.”

That’s understandable, but still a shame. Blockchain-like solutions to better tie together communications between and among biopharma and service providers would have a major impact on the industry.

Somerville is hopeful. “Whether it’s some version of inventory visibility, or manufacturing execution, what we can call ‘business rules’ that can automatically meet product requirements upstream – regarding any type of raw material certification, for example – would be doable. This would ensure a CDMO has used the raw materials from the appropriate suppliers.”

She adds: “I don’t know of anyone working on them [above mentioned “business rules’] actively right now, but some of the CDMOs in the product verification requirements in DSCSA already manage serial numbers on behalf of their manufacturers. They would certainly be interested. We’ve had a couple inquiries from packagers who do the serial number management for companies as well.”

End Of Snake Oil Salesmen

Wrapping up our review, I bring Somerville back some two years ago to one of the first discussions we had regarding blockchain technology.

“Is it a blessing today that when people hear “blockchain,” they no longer reflexively think “crypto-currency and bitcoin?” I ask.

“It is a blessing, and it’s exciting,” she replies. “The end of the crypto-currency mania has taken a lot of snake-oil salesman out of the conversation. People should have known it all along.”

“In fact,” she concludes, “business executives have been smart. They’ve asked the questions, and gotten down to an understanding of the real opportunities that are here. We’ve tried as best we can to do the right thing, and achieve the long-term vision of what blockchain should be in the biopharma industry. Having crypto-currency gone, frankly, clears the field of the noise. Companies now have done their internal education. What’s really cool is we see that this education on all sides has led to less wasted conversation, and more focus on real business problems and solutions.”

What would also be cool is if that focus brings forth solutions for the drug development and manufacturing outsourcing sector.

In a sub-second would be nice, too.