BLOCKCHAIN IN HEALTHCARE SUPPLY CHAINS

Neil H. Wasserman, Timewave Analytics, LLC

Contact: nwasserman@tmwv.net

Nov 2016 The Impact of Blockchain on Pharma and Healthcare Service Delivery Processes

Blockchain, the technology underlying bitcoin and other virtual

currencies, is now a disruptive factor in IT services and

strategy for every major financial services organization, as

well as for companies, like IBM, Microsoft, and other IT service

organizations involved with information technology. Similarly

in healthcare, blockchain will have wide-ranging effects,

changing the character and cost structure for clinical trials,

enabling new modes of patient engagement, access to health

information, and personalization of drug design, drug

formulation, and treatment regimens.

This paper takes a high-level view of blockchain technology in

relation to its potential impact on the pharmaceutical industry

and healthcare more generally. We aim to identify why and

how those connected with the pharmaceutical industry need to

pay attention to critical issues associated with the impact of

blockchain on healthcare. This will enable the development of

strategies and initiatives appropriate to the rapidly changing

business environment for drug development and provision of

care for patients.

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Contents

WHY BLOCKCHAIN DESERVES YOUR ATTENTION.............................................................. 2

WHAT IS BLOCKCHAIN? ...................................................................................................... 2

Key Technical Features of Blockchain ................................................................................................... 3

Trusted Identity without a Central “Trusted” Administrator........................................................... 3

Distributed Ledger ................................................................................................................................ 3

Consensus Algorithms ............................................................................................................................ 3

Smart Contracts ..................................................................................................................................... 3

Blockchain-as-a-Service ....................................................................................................................... 4

Blockchain Business Capabilities ............................................................................................................ 4

Identity..................................................................................................................................................... 4

Anonymization ........................................................................................................................................ 4

Provenance ............................................................................................................................................. 5

Ownership ............................................................................................................................................... 5

Transaction Validation .......................................................................................................................... 5

Transferability, Access .......................................................................................................................... 6

Availability / Confidentiality .............................................................................................................. 6

CHALLENGES FOR DEVELOPMENT OF MEDICAL INTERVENTIONS ..................................... 6

Clinical Trials and Related Data Management .................................................................................. 6

Supply Chain ............................................................................................................................................. 6

Managing the Complexity of Patient Care ........................................................................................ 6

IMPACT OF BLOCKCHAIN ON PHARMA BUSINESS MODELS – KEY USE CASES ................ 7

Supply Chain Management .................................................................................................................... 7

Drug Development and Clinical Research ........................................................................................... 7

Integrity of Clinical Data ..................................................................................................................... 7

Expansion of Patient Cohorts .............................................................................................................. 7

Downstream Research on Patient Impact ............................................................................................. 8

Integrating Treatment Regimens with Adherence and Patient Capacity for Disease Management ............................................................................................................................................. 8

Assessment and Management of Patient workload ........................................................................ 8

Complexity of Chronic Disease Management ................................................................................. 8

Changing Models for Drug Design, Formulation and Delivery ....................................................... 9

Personalization of Drug Treatment Regimens and New forms of Patient Engagement .......... 9

New Business Models ......................................................................................................................... 10

Serving Populations with Limited Access Healthcare Services ................................................... 10

STRATEGIC ISSUES – WHAT NEEDS TO BE DONE NOW .................................................... 11

Intellectual Property Strategy ............................................................................................................ 11

Business Alliances for Pilot Implementation ...................................................................................... 11

Business Impact of Regulatory Change ............................................................................................. 12

CONCLUSION .................................................................................................................... 12

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Blockchain in Healthcare Supply Chains

WHY BLOCKCHAIN DESERVES YOUR ATTENTION For good reason blockchain technology is becoming a key factor in business strategy.

Marc Andreessen, the founder of Netscape, said that blockchain today is like the Internet was

in the 1990s. It will transform the way business is done. That is certainly the case for financial

services, with every major financial organization looking at blockchain as both a threat and

opportunity. Financial services invest a lot in IT, where small advantages in IT capability can

make a huge difference in terms of profitability and even viability. IBM, Microsoft, Deloitte

and virtually every major business service organization have blockchain innovation groups and

initiatives to address the impact of blockchain on their business and government customers.

But what of healthcare? Why should we pay attention?

The growing interest in applications of blockchain to healthcare is reflected in the growing

number of events on the subject. Most recently there was a conference sponsored by ONC and

NIST1, highlighting a number of initiatives based on blockchain technology to address urgent

healthcare issues. Some of these efforts will be discussed in this whitepaper.

WHAT IS BLOCKCHAIN?

The simplest answer is that blockchain is the technology underlying bitcoin and other virtual

currencies. In that technical model, it provides peer-to-peer verification of ownership, and

mechanisms for recording simple transactions that transfer ownership. The structure was

devised to solve the “double spending” problem without a central authority. One should not

be able to sell a bitcoin and then sell it again to a different party.

The principal features of blockchain are shown in the chart.

1 Office of the National Coordinator (ONC)and National Institute of Standards and Technology (NIST), Use of Blockchain in Healthcare and Research Workshop , Sept. 26-27, 2016. https://oncprojectracking.healthit.gov/wiki/display/TechLabI/Use+of+Blockchain+in+Healthcare+and+Research+Workshop

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In defining blockchain, it is common to offer simple answers such as blockchain is about

“provenance”. Blockchain is about a “distributed ledger.” But the answer to that question is

more complicated and dynamic.

Since the development of cryptocurrencies, many have recognized that the innovations involved

in the bitcoin model could have much wider impact. Some of the most creative scientists and

engineers have analyzed the original bitcoin technology, extracting features that have more

general applicability. The blockchain domain has now expanded to constitute features and

innovations that go far beyond the original bitcoin distributed application environment.

Key Technical Features of Blockchain

Trusted Identity without a Central “Trusted” Administrator

Identity of parties in the healthcare ecosystem is an essential requirement for many business

functions. Manufacturers must have trust in the supply chain. Patients must have trust in the

sources of information to which they have access. Several initiatives that build on the

blockchain infrastructure are addressing the need for peer to peer, distributed identity and

trust mechanisms.

See for example companies like Drummond Reed’s, RespectNetwork, and corresponding

standards initiatives are using blockchain to build a robust infrastructure for identity

management.2 :

Distributed Ledger

Blockchain is often described as a distributed ledger. It is more than that, but fundamental to

blockchain capabilities is the distributed record of transactions, or other content, which is

validated in a decentralized network. This data store is replicated, synchronized and

validated across a community of servers. The block contains a record of transactions and a

“hash” of the prior block in the chain, the hash being a code that can be used to validate the

content of prior blocks.

Consensus Algorithms

Associated with this distributed ledger are algorithms designed to validate and attain

consensus on which blockchains, that is what transaction records, are recognized as correct by

the community. There is the cost to building consensus, and one of the major areas of technical

focus is making that process more efficient, without sacrificing confidence in the validity of the

shared content.

Smart Contracts

One of the key developments subsequent to the original application of blockchain to

cryptocurrency is the attachment of rules for transactions executed in the blockchain

environment. This concept was promoted by Ethereum (www.ethereum.org), and continues to

be elaborated by other organizations and initiatives. These rules, embedded in contractual

2 Additional sources of information may be obtained at the repository of papers submitted to a workshop on

the subject, e.g., Web of Trust Design Workshop, https://github.com/WebOfTrustInfo/ID2020DesignWorkshop

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relationships, can be used to support many types of business transactions, access to data,

transfer of ownership — any operation dependent on who is participating and the state of the

participants’ environment.

Blockchain-as-a-Service

Few users of blockchain technology in the healthcare space will choose to develop their own

infrastructure. Standards for blockchain services, such as identity management, smart contracts,

and other features are in development. Service providers like IBM, Microsoft and numerous

smaller companies will offer a blockchain infrastructure to companies and individuals that want

to take advantage of the new capabilities for accessing data and managing transactions.

Companies entering the blockchain world will have to make decisions regarding their

participation in standardization initiatives and how they will access blockchain based business

services.

Blockchain Business Capabilities

What business strategists need to pay attention to, more than the technical infrastructure, is the

set of capabilities that affect current business processes and enable new ones. One pervasive

feature of the blockchain business environment is the ability to incorporate rules and constraints

on participant behaviors. More than just Smart Contracts, the rules pertain to virtually all

functions enabled by the blockchain environment.

Identity

Trust in a transaction environment begins with validating the identity of the participants. The

ability to provide a unique identifier to individuals in a distributed network will enable the

creation of new modes for data access across servers. Rules associated with identity can

enable consumer-controlled permissions, group associations, and non-repudiation for member

transactions. Validated identifiers can be attached to real and virtual objects for supply chain

validation and data assurance.

Anonymization

The ability to support anonymized identity and access to transactions is a core feature of the

original blockchain design as implemented in the bitcoin protocol. While anonymized

transactions may be controversial in some environments, the potential for anonymized,

validated identity has profound implications for what is possible in pharmaceutical

development and in delivery of healthcare services. As will be discussed in more detail below,

anonymization with permission rules expands potential patient participation and alters design

constraints for clinical trials and enables access to patient data that may reside at multiple

locations. This capability may in turn facilitate customization of service protocols, as well as

more detailed information on the efficacy of drugs in relation to individual patient

characteristics.

One important consideration is the need for analysis and regulation of deanonymization

capabilities. The aggregation of data may permit the identification of individuals who believe

they are gaining access to a service on an anonymous basis. Anonymization protocols must

therefore include safeguards to protect improper identification of individual participants, or at

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least warnings regarding deanonymization risks when individuals agree to participation on the

assumption of anonymity.

Provenance

Provenance, in relation to blockchain, is the ability to trace the origin and validity of an object

(product, data, person, action) over time. In a supply chain, for example, the origin of a

component in the manufacturing process may need to be validated and traced back to its

source. A transaction record or other piece of data may need to be verified and traced back

to its owner to validate the content and permissions associated with the use of the data. The

provenance of an object linked to a blockchain is validated by the hash and consensus

algorithms that assess the validity of the blockchain and its content. Confidence in the

provenance of the object associated with the blockchain is fundamental to the trust relationships

that the blockchain infrastructure supports.

Ownership

Ownership of a unit of cryptocurrency such as a bitcoin is a property of the original blockchain

use case embodied in the bitcoin infrastructure. “Ownership” is a construct of the community

that recognizes that particular relationship between an object and an individual or entity. The

power of the blockchain derives in part from the ability to support ownership contracts

recognized by a community. What is owned, or more specifically what is controlled, according

to established rules, may include tokens of value, payments, data, services, drugs, medical

devices, treatment regimens, or entities in a complex supply chain.

In the healthcare environment, ownership includes the ability to control permissions for the use

of information pertaining to the health of an individual, or data pertaining to the actions,

rights, and capabilities of a healthcare provider. This becomes particularly important as the

range of data pertaining to individual health expands to include IOT data, such as sensor-

produced data, GPS data, transaction data, or information on the behavior of the patient,

which may be relevant to a patient’s health, but which should remain under the patient’s

control.

Transaction Validation

A block in a blockchain holds batches of validated transactions. A key unique feature of the

blockchain infrastructure is the use of consensus algorithms to compare the validity of

alternative transaction records, and flag when a blockchain may have been corrupted. From

the business perspective, trust in the immutability of the record and in the identity of the

participants to the transaction is of enormous value. As the blockchain infrastructure has

evolved, conditions for executing transactions can be defined as Smart Contracts, without the

intermediation of third parties. Simple operations such as access to data can be conditional on

such contracts. More complex operations, such as payments or permissions for procedures can

also be supported with the implementation of rule-dependent transactions.

In the healthcare environment, trusted identity and rule-based transactions (Smart Cntracts) can

be applied to all actions that affect the health status of the patient. These may include

behaviors carried out by the patient, such as those associated with adherence to prescribed

regimens, communications between the provider and the patient, and changes in the patient’s

data produced by diagnostic and sensor devices. The validated transaction record can then

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be reliably used to manage the condition of the patient, as well as to support research on the

impact of alternative treatment regimens. Controlled access to patient data can then be used

to assess outcomes in relation to detailed data on the characteristics of individual patients and

patient populations.

Transferability, Access

With ownership goes the ability to transfer objects from one owner to another. The blockchain

infrastructure provides the ability to control such transfers, and control access to any object

referenced on the blockchain. This capability can include access to data, as well as access to

physical objects such as pharmaceuticals, and medical devices.

Availability / Confidentiality

Because of the ability to manage permissions for access to multiple data sources, one of the

use cases to be implemented early on is likely to be interoperability for data access. With

appropriate controls supported by the blockchain infrastructure, a more open data

environment can be supported within HIPAA rules and other requirements for privacy of patient

data.

If such data is to be provided to entities other than the patient, even with permission,

deanonymization may be an issue. The rules-based capability for managing permissions will

have to be structured to address this concern. But blockchain promises to offer a common

protocol for permissions and integrated access to multiple electronic data sources, a challenge

that has impeded integrated patient care and decision-making.

CHALLENGES FOR DEVELOPMENT OF MEDICAL INTERVENTIONS Blockchain technology promises to address a number of challenges that prevent efficient

development of new treatment regimens. Some of these obstacles to innovation and patient

care include:

Clinical Trials and Related Data Management

High cost

Small size of patient cohorts

Delays in commercialization (time-to-market)

Supply Chain

Safety and quality control and manufacturing

Safety in delivery to the consumer

Recall management

Managing the Complexity of Patient Care

Adherence and patient engagement

Managing patients with multiple chronic conditions

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IMPACT OF BLOCKCHAIN ON PHARMA BUSINESS MODELS – KEY USE CASES

Supply Chain Management

Pharmaceutical companies and other healthcare providers depend upon a global supply chain

of products and services.

Assurance in the provenance of active ingredients. – For pharmaceuticals, patient

safety and company liability depend on the reliability of active ingredients used

during the manufacturing process.

Traceability and validation or products. – Counterfeit drugs pose a threat to both

consumer safety and the profitability of pharmaceutical suppliers. Assurance that

product content meets specifications, and has not been compromised, is a core value

for pharmaceutical producers.

Improved data on the movement of pharmaceuticals globally, and data on inventory

would be of great value to multiple stakeholders, pharmaceutical companies,

pharmacies, and healthcare providers.

Managing recalls, when necessary, is very expensive and difficult to execute reliably.

The ability of blockchain technology to maintain immutable records of provenance addresses

many of these issues. Given the current expense of addressing these problems, there is likely

to be swift payback for blockchain initiatives.

Drug Development and Clinical Research

Integrity of Clinical Data

Validation and traceability of data generated during the course of clinical trials is a key

requirement for navigating the phased process for evaluating proposed medical interventions.

The ONC Challenge submission from Merck3 highlights the use of blockchain for verifying the

integrity of data obtained in connection with clinical trials. The authors highlight the

opportunity to obtain such data without violating the privacy of trial participants.

Expansion of Patient Cohorts

The combination of interoperability, data and transaction validation, and anonymization offers

a basis for expanding the size and diversity of patient cohorts in clinical trials.

INCREASE IN SIZE

Blockchain in combination with sensors and IOT support can allow for more detailed

documentation of patient actions and observational data for clinical trials. The lower cost for

3 Nishan Kulatilaka, ONC Blockchain Challenge – Blockchain Clinical Trials.

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monitoring patient compliance and the ability to manage permissions for participation have the

potential to expand the feasible size of the patient cohort involved in clinical trials.

INCREASE IN PRECISION

The increase in the size of the patient cohort connected with the clinical trial will permit

experimental designs in which multiple groups of patients can be analyzed in relation to

narrowly-defined variables that may be associated with the efficacy of treatment regimens.

The capabilities of anonymization and validation may make it possible to collect more detailed

data on individual patients. This in turn may give insight into how drug formulations and

treatment regimens can be adapted to individual patient characteristics and capabilities.

Downstream Research on Patient Impact

The blockchain infrastructure, permitting validated access to patient data, will also support

research on the impact of treatment regimens for a large fraction of the customer population.

Downstream research on patient adherence and the impact of interventions on patient well-

being will provide an enhanced basis for ongoing improvement of interventions and

customization of interventions to varying patient characteristics.

Integrating Treatment Regimens with Adherence and Patient

Capacity for Disease Management

Assessment and Management of Patient Workload

The efficacy of a particular intervention may depend upon the capacity of the patient to

manage the treatment workload.4 As described in the work of Dr. Vincent Montori at Mayo

Clinic, proposed treatment regimens should be matched to the capacity of the patient to

manage the workload associated with the new demands placed upon the patient. Blockchain

technology will permit collection of detailed data on the patient and patient’s environment and

support the development of a treatment plan consistent with the resources and capability of

the patient to meet the burdens of adherence.

Complexity of Chronic Disease Management

One of the positive trends in the healthcare industry has been a renewed focus on chronic

disease. The industry is still, however, largely structured in terms of siloes defined by

professional expertise associated with narrowly defined domains of specialization. It is

becoming increasingly recognized that these silos interfere with the ability to have a more

integrated view of the patient’s condition. Blockchain technology provides a promising means

to access data across multiple silos and to support new methods for managing the complexity

involved in the care of patients with multiple chronic conditions.

4 See for example, Boehmer, KR, et. al., “Patient capacity and constraints in the experience of

chronic disease: a qualitative systematic review and thematic synthesis.”

https://www.ncbi.nlm.nih.gov/pubmed/27585439

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DRUG INTERACTIONS

One opportunity to apply blockchain to an urgent medical need is the assessment of

medication interactions in patients requiring multiple medications and treatment regimens. An

initiative called “MedChain” is described in one of the ONC Challenge papers5. In MedChain,

a blockchain infrastructure is used to compile validated medication lists and to apply analytical

capabilities to flag the possibility of Adverse Drug Events. Of course, these incidents may be

due to other factors than drug interactions. The point is that access to a more complete set of

patient information, including reliable drug lists, enabled by a blockchain infrastructure, will

reduce the risks associated with drug interventions.

ACCESS DATA TO MANAGE MULTIPLE CHRONIC CONDITIONS

The MedChain model addresses the specific case of drug interactions. The more general

requirement is to access the more complete set of data required to manage multiple chronic

conditions. The same capabilities (identity management, anonymization, transaction validation,

and interoperability) that apply to drug interactions can be applied to the more general case

of accessing data relevant to the management of multiple chronic conditions. As noted earlier,

this information can include larger data sets than may be traditionally stored in EHR systems.

The larger universe of relevant data would include behavioral and environmental information

relevant to the patient’s condition and support network. The anonymization capabilities may

be particularly important for acquiring data related to these social and behavioral factors.

Changing Models for Drug Design, Formulation and Delivery

Personalization of Drug Treatment Regimens and New forms of Patient

Engagement

Blockchain will enable controlled access to medical and behavioral information associated with

the patient. See for example the model and pilot, “MedRec,” a collaboration between MIT’s

media Lab and Beth Israel Hospital6. This pilot implementation of blockchain technology

establishes interoperable access to the medical records of patients. The blockchain

infrastructure will enable all nodes in the patient-care supply chain to access patient data (with

appropriate permissions) and deliver information to customize treatment regimens and flag

high-risk conditions.

The MedRec pilot is an initial step in the application of blockchain technology to new forms of

patient and provider engagement. Imagine the possibility of creating flexibly defined private

social groups, to which patients with common conditions can belong, while maintaining complete

privacy. Incentives can be attached via blockchain to motivate patient behaviors. Access to

data from IOT sources can provide immediate feedback on medical adherence and adoption

5 MedChain: Secure, Decentralized, Interoperable Medication Reconciliation Using the

Blockchain

6 A Case Study for Blockchain in Healthcare: “MedRec” prototype for electronic health

records and medical research data

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of key patient behaviors. Blockchain enables a supply chain for patient care and engagement

involving the multiple stakeholders in the patient’s well-being.

New Business Models

Core blockchain capabilities for verifying identity, validating transactions, providing

permission-based interoperable data access and anonymization will encourage the

implementation of new business models, development of treatments, and improvements in

managing the supply chain of products and services from source to customer.

Blockchain will affect operations and the competitive environment for all stakeholders —

pharmaceutical companies, pharmacies, medical professionals, insurers, in-home caregivers,

and patients.

Pharmaceutical companies - Building on a blockchain infrastructure, the

pharmaceutical company can offer a range of medical products and treatment

regimens, customized to the patient’s genomic and medical data, as well as on

information related to the patient’s behavioral characteristics and support environment.

Pharmacies – With data on patient requirements, the pharmacy can oversee drug

prescriptions and guidance on how the drug is to be used, personalized to the

requirements of the patient. The pharmacy and/or healthcare provider can then

follow-up on adherence and efficacy with data provided by the sensors, mobile phone

application, and other sources of data in the care environment.

Healthcare professionals – With blockchain-managed permissions, physicians and

other healthcare providers can access information relevant to the patient’s condition

and care requirements. Integrated access to real-time data from the patient with other

electronic records will enable new mechanisms for alerting healthcare providers to

patient risk, and improve decision-making relevant to the changing needs of patients.

Serving Populations with Limited Access to Healthcare Services

Healthcare is a global business with wide variances in characteristics of local populations. One

of the most important opportunities from the standpoint of global population health is the use

of blockchain to provide access to health information and services for underserved populations.

LOWERING THE COST OF ACCESS

In many countries with poor roads and infrastructure, cell phones may be a principal means of

obtaining critical information. Blockchain technology can be a mechanism to connect sparsely

distributed health care services to populations in which the principal means of access to outside

information is the cell phone. In conjunction with other techniques, blockchain technology can

provide a low-cost way to help patients access health information, support patient engagement

in healthful behaviors, and provide for the distribution of pharmaceuticals, and other health

products. With this model, limited health resources can be leveraged to greater effect.

ADDRESSING SOCIAL IMPEDIMENTS FOR HIV AND OTHER COMMUNICABLE DISEASE

In many regions, health challenges are made greater due to social stigma and fears associated

with disease conditions. Blockchain can deliver the capability to support private

communications and, if necessary, anonymized access to health information and services. This

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may help alleviate the social challenge of managing instances of communicable disease in

these socially sensitive environments. The blockchain infrastructure can then be used to track

interventions and help manage the distribution of pharmaceuticals, with particular value in

cases where distribution networks are vulnerable to disruption.

STRATEGIC ISSUES – WHAT NEEDS TO BE DONE NOW

What should be on the priority list? How does blockchain matter now for healthcare

executives?

It is widely assumed, for many reasons, that healthcare lags other industries in terms of IT

innovation. Wide use of electronic records is a recent phenomenon in healthcare, decades

behind similar transformations in manufacturing and financial services.

Nevertheless, as we have outlined, blockchain technology has the potential to address current

challenges, such as the management of chronic disease, the rising cost of clinical trials, supply

chain management, and interoperable access to healthcare information.

If the transformative impact of blockchain is not going to be felt within the next year or more,

what needs to be done now? The conservative answer is to take actions that manage risk, that

is, take actions that put the company in a position to take advantage of appropriate

opportunities when they arise, and defend against possible competitive threats. These steps

would address such issues as intellectual property, business alliances, preparing for regulatory

change, and developing internal company resources that can allow the company to move

quickly when necessary, and to assess the changing strategic landscape.

Intellectual Proper ty Strategy

Marc Andreessen’s comparison of blockchain now to the Internet in the 1990s may also apply

to intellectual property development. In the 1990s there was a rush to claim territory in the

Internet domain. Many of those claims for patent protection were overly broad. Since the

Bilski v. Kappos decision (2010), it has become much more difficult to gain USPTO patent

approval for broad business applications of technology. Nevertheless, there is a similar land

rush for intellectual property in the blockchain space.7 Dell Products and has, for example,

filed a patent on distributed ledger applications.8

Patents are being applied for blockchain applications in healthcare, which may affect the

ability of companies to compete in business areas in which they have an interest. It would

therefore be wise to monitor developments in this area, and perhaps explore the development

of appropriate patents, if only as a defensive measure.

Business Alliances for Pilot Implementation

The competitive landscape for companies developing technology and services related to

blockchain infrastructure is evolving rapidly. Companies aiming to take advantage of

7 See Bailey Reutzel, The Looming War for Blockchain Patents, http://www.coindesk.com/looming-war-blockchain-patents 8 US Patent Application Publication 2016/0261690. “Computing device configuration and management using a secure distributed transaction ledger,” Sept. 8, 2016

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blockchain at some future point in time need to identify the technical components and business

partnerships that will enable them to implement desired changes in business processes and

customer relationships. For example, lowering the cost of clinical trials, and implementing new

experimental designs for testing safety and efficacy will require experience with pilot

implementations. These will in turn depend upon appropriate business partnerships that can

supply the needed capabilities for blockchain implementation.

Business Impact of Regulatory Change

In the United States, the FDA already has initiatives to explore new models for pharmaceutical

development and regulation. As discussed previously, blockchain technology has the potential

to change the manner in which drugs are tested and monitored. This will drive regulatory

change. It will be important for pharmaceutical companies to establish positions with respect to

regulatory policy development, and to be aware of the likely directions for such initiatives.

For example, companies may want to participate in the FDA’s Clinical Trials Transformation

Initiative, and other efforts to improve processes associated with clinical trials. Other initiatives

such as the NIH sponsored Million Person Precision Medicine Study may benefit from the

efficiencies enabled by blockchain technology. These initiatives will foster change in the

regulatory environment for clinical trials and in the evaluation of proposed interventions.

CONCLUSION Healthcare services form a complex network of supply chains. Blockchain technology is ideally

suited to manage provenance in a supply chain. This would apply to the typical supply chains

involved in manufacturing and distribution. It would also apply to other entities and associated

transactions, whether those entities represent materials for a manufacturing process, services,

payments, data, or the various stakeholders’ connection to that network. Given the expense

and risks associated with supply chain management, the payback for blockchain

implementations is likely to be substantial.

Blockchain technology will have a profound impact on the way that healthcare is delivered to

patients, especially for patients with multiple chronic conditions. Pharmaceutical companies,

insurers, healthcare providers, and other stakeholders in the healthcare industry are well

advised to anticipate the impact of blockchain on their business models.

The best way to learn about the potential business impact of blockchain is probably through

careful exploration of pilot implementations. Without incurring much risk, a pilot allows for the

exploration of scenarios involving blockchain applications for a particular business environment.

There has been and will continue to be a burst of creativity powering the evolution of

blockchain technology. A similar creative effort on the business side may produce new ways of

looking at healthcare opportunities to the great benefit of companies and their customers.