How Blockchain is Ensuring Supply Chain Integrity in Healthcare?
The healthcare industry relies on intricate supply chains involving numerous stakeholders, such as manufacturers, distributors, pharmacies, and healthcare providers. To ensure the safety and effectiveness of drugs and medical devices, maintaining the integrity of these supply chains is crucial. However, the supply chain is vulnerable to various issues like counterfeit products, theft, and diversion, compromising patient safety and causing financial losses. Discover how blockchain technology offers a potential solution to these challenges by providing security, transparency, and immutability to build a trusted and efficient healthcare supply chain that guarantees product integrity and offers significant benefits to the industry.
Understanding the Healthcare Supply Chain
The healthcare supply chain is a multi-stage process involving entities responsible for the production, transportation, and delivery of drugs and medical devices. The supply chain comprises numerous stakeholders, including manufacturers, distributors, wholesalers, pharmacies, and healthcare providers. The integrity of the supply chain is critical to ensure the safety and efficacy of the products involved. Any disruption can have severe consequences.
Unfortunately, the global pharmaceutical industry suffers an estimated annual loss of $200 billion due to counterfeit drugs, with developing countries accounting for 30% of sales. Furthermore, in the EU markets, cargo theft leads to an average annual loss of medicines worth $33.5 million.
Issues with Supply Chain Integrity in Healthcare
The integrity of healthcare supply chains remains susceptible to various issues, despite the diligent efforts of industry stakeholders. Such issues can put the safety of transported and delivered products at risk. Two of the most prominent concerns are as follows:
- Counterfeit Products
Counterfeit products are increasingly problematic within the healthcare industry, particularly in developing nations. These fraudulent products may resemble genuine products, but they are of inferior quality and can pose significant risks to patients.
- Theft and Diversion
Drugs and medical devices are high-value commodities, and supply chains are susceptible to theft and diversion. Products can be stolen from warehouses or during transportation and sold illicitly on the black market.
Blockchain as A Solution
As a potential solution to the obstacles confronting healthcare supply chains, enterprise blockchain development technology is gaining prominence. By utilizing the blockchain’s immutability, transparency, and security, healthcare stakeholders can establish a reliable and efficient supply chain that maintains the integrity of transported and delivered products.
- Authentication and Verification
Enterprise Blockchain development technology can enable the authentication and verification of products at each stage of the supply chain. A unique identifier can be assigned to each product, which is then registered on the blockchain. This facilitates the detection of counterfeit products and allows stakeholders to authenticate the product’s legitimacy.
- Regulatory Compliance
Blockchain technology can assist in ensuring regulatory compliance by creating an immutable and auditable record of every product’s movement through the supply chain. This can help healthcare stakeholders comply with regulations like the FDA’s DSCSA and the EU’s FMD.
Use Cases
The healthcare industry is increasingly adopting blockchain technology to manage its supply chains, with drug traceability being one of its primary applications.
- Drug traceability
The World Health Organization (WHO) reports that counterfeit drugs account for up to 30% of medications in developing countries, causing around one million deaths each year. By utilizing blockchain, an end-to-end record of a drug’s journey from its manufacturer to the patient can be established, thus ensuring that the drug is genuine and safe. [Reference]
- Data management
Data management is a significant aspect of healthcare, involving vast amounts of information ranging from patient records to clinical trials and research findings. Blockchain technology can facilitate the secure and transparent sharing of data among healthcare organizations while safeguarding patient privacy and confidentiality.
The Strategic Roadmap
To implement blockchain technology in healthcare supply chain management, a strategic roadmap has been established, which includes the following:
- Development of Standards and Regulations
The development of standards and regulations is crucial to ensure the safe and effective implementation of blockchain technology in healthcare supply chain management. Regulatory frameworks must be established, incorporating guidelines for data privacy and security.
- Integration with Existing Systems
Seamless adoption of blockchain-based solutions requires integration with existing electronic health record systems and other healthcare technologies. Integration can help streamline the implementation of blockchain technology in healthcare supply chain management.
- Collaboration between Stakeholders
Collaboration between stakeholders, including healthcare providers, manufacturers, regulators, and patients, is essential for the successful adoption of technology in healthcare supply chain management. Developing blockchain-based solutions that meet the needs of all stakeholders requires collective efforts.
Market Analysis
According to a survey by Deloitte, a majority (56%) of healthcare providers believe that blockchain technology has the potential to enhance supply chain management in healthcare. The survey also revealed that 35% of healthcare providers have either already implemented or intend to implement this technology in the next year.
Black Book Market Research conducted a survey revealing that 19% of healthcare executives intend to adopt blockchain technology within the next year, and 42% plan to do so within the next five years. The survey also found that an overwhelming majority (88%) of healthcare executives believe that blockchain technology will prove useful in managing supply chain operations.
The Future Ahead
While the implementation of blockchain technology in healthcare supply chain management is still in its nascent stages, there is a rising interest in its adoption to ensure supply chain integrity. Leveraging the blockchain, the healthcare industry can benefit from improved transparency, secure product tracking, better data privacy and security, and end-to-end traceability of medical products throughout the supply chain.
The future of blockchain in healthcare supply chain management is promising, with potential improvements in efficiency, cost savings, data security, privacy, transparency, trust, and the emergence of novel business models. For further information, please visit Gyan Consulting.
