From The Editor | August 28, 2017

Unleash Blockchain Technologies On The Entire Supply Chain


By Louis Garguilo, Chief Editor, Outsourced Pharma

Unleash Blockchain Technologies On The Entire Supply Chain

Release blockchain technologies from the jaws of serialization.

Unleash it on tech transfer, data integrity, project management, supply-chain relationships, and all components that make up our drug development and manufacturing outsourcing industry.

We’ve initially looked to blockchain technologies to create electronic linkages to support serialization, and DSCSA data. Great. But why not now utilize this power to more effectively manage entire contract development and manufacturing networks? It could change the way you do business.

This broader application of blockchain will depend on thought leaders from various functions at drug companies, and their partners, coming together with the inventors of blockchain technologies to create more efficient external and internal supply chains.

Yes, there will be apps for that.

More Bang For the Blockchain Buck

Let’s quickly define what we mean by “blockchain,” and then move to our discussion.

Bob Celeste, founder of the Center for Supply Chain Studies, recently wrote an article in Outsourced Pharma helping us to understand the term, and the technology’s current status as our industry’s commercial drug traceability solution. I recommend giving that article a read.

First, a word on Bitcoin: Everyone should understand that Bitcoin is a currency, and blockchain is the trading and tracking technology that supports the use of the currency.

Fundamentally, blockchains are supercharged technologies that create revved-up “ledgers,” or spreadsheets. Blockchain applications allow for a multitude of inputs from various partners, but those inputs are accepted only by “required consensus” and via rigorous (technological) checks-and-balances. It’s an airtight track-and-trace chamber.

But now blockchain is ready to do much more: Improve the way you conduct your entire supply chain management and relationships.  

Link By Link

Pharma industry experts I’ve spoken with indicate we don’t yet have a model company attempting to apply blockchain solutions to overall external supply-chain management. But that should change relatively soon.

“Nearly all large pharma companies are now experimenting with this,” says Celeste, whose organization numbers some 50 companies across the biotech, pharma and healthcare and technology sector, including names such as Johnson & Johnson, Pfizer, Merck, Cardinal Health, McKesson, Rx-360, KPIT, TraceLink, Unisys, and Verify Brand. “And pharma is experimenting smartly, with initial and targeted implementations to provide immediate feedback, and measurable payback.” Some companies are working with a single supply-chain partner to get technologies off the ground, and derive early proof of the value proposition. “This type of experimentation has become quite aggressive,” adds Celeste.

It makes sense. Having been regulated into investing resources, time, money and (mostly borrowed) IT brainpower for blockchain solutions specific to DSCSA, biotech and pharma companies are now pursuing areas well beyond this additional application. What started out as a secure, tamper-proof tracking and transaction platform is taking on new life.

From CEOs (more on you in a moment) to frontline managers, individuals are having a “wait-a-minute moment,” suggests Celeste. They have realized “our newly implemented blockchain platform can work as an overall tech transfer, data integrity, and supplier management platform as well.”

Celeste sees this movement in turn inspiring the blockchain-technology companies, and database designers such as Ethereum, Hyperledger Fabric and MultiChain are reacting to industry needs. They are spring-boarding from the original focus on financial transactions to wider business applications, and the collection and controlling of metadata.

“Originally, blockchain was managing – mediating – a currency specifically,” explains Celeste. “We are now talking about managing all the data in the supply chain. This requires a subtle mind change, from the concept of managing the drug itself, to managing the processes and transactions as the drug moves from partner to partner, and phase to phase.”

C-Suite Soothsayers

C-suite denizens operate in a state of prescience, continuously geared to future moments. At the same time, executives can make colossal miscalculations if they get to far ahead of realties.

Thus: Should pharma executives and their external partners be concerned now with falling behind the competition – and perhaps the regulatory agencies – if they don’t build on their initial serialization investments, and towards solutions in other supply chain areas, such as project management, tech transfer, and CMO relationship management?

“I don’t see this as an absolute immediate, crucial agenda item,” starts Celeste, before adding, “but a lot depends on whether the big drug manufacturers themselves decide to move down this route. Then it could become a competitive advantage in a hurry. A lot of the major players are already well beyond just blockchain development.”

Senior leadership cares less about what the actual underlying technology is, and more the potential for a path to more flexible and immediate vendor/partner responses, and innovative methods of connecting with those supply chain partners.

“This may actually lead to more effective, ad-hoc opportunities,” says Celeste. Instead of saying, ‘My IT department will call your IT department to get set up to work together,’ blockchain technologies will support instantaneous and trustworthy partnering for tech transfer and production.”

“Executives see a lot of fluid environments in the future,” says Celeste. They sense an architecture emerging from new blockchain technologies that can expand business scenarios. To them, it’s an “event architecture.” The industry has focused on finished goods, where there is a status that changes over time as they go through business steps. New technologies are starting to more clearly understand this behavior, and becoming capable of triggering business decisions based on that flow of information.

And just as with track-and-trace, serialization and DSCSA for drug product, regulatory agencies are also looking to further penetrate the supply chain for more transparency and accountability with drug substance.

Celeste sees this as a positive, “opening up opportunities upstream, as manufacturers become comfortable managing traceability data for finished goods.” As the technology matures, he believes, agencies may request the application of similar architectures and technology to manage APIs and excipients.

“Therefore, while blockchain may not be at the center of the C-Suite radar right now, these maturing capabilities will start to provide new opportunities for those companies that are looking for them,” and provide the means to meet future requirements.

All this will “start to creep back into CDMOs,” says Celeste. (An example is the drug Avastin, which faced challenges not as a finished product, but as an API.) “Depending on how strongly the FDA may start to push back into the API, we’ll see certain changes coming. Already, there is a growing concern about APIs, their country of origin, safety profiles and handling.”

“So if I were a CEO at either a drug owner or CMO,” concludes Celeste, “while I might not put blockchain in the middle of my bull’s-eye right now, I’d place it on at least the outer rim of that middle target.”