FDA blockchain trials take big step forward with IBM, KPMG, Merck, Walmart

The US Food and Drug Administration is moving closer to adopting a blockchain-based system for tracking pharmaceuticals through the supply chain. IBM, KPMG, Merck, and Walmart are collaborating in a new test program that will see if the project has legs, and IBM in particular is pretty keen to show that the system can work, as it quite fancies selling heaps of cloud-based services to businesses that adopt the framework.

Walmart has been surprisingly evangelical about the potential for blockchain, perhaps owing to the immense pressure it is facing in the US from Amazon, which is encroaching on its turf with real zeal following the acquisition of Whole Foods. Walmart has a pretty competent online retail business, but it is aware that it had to drag its older processes into the online world, while Amazon was built from the ground up for the internet.

To this end, getting ahead of the curve on blockchain-based uses could provide it with a valuable edge against both its main rival and the plethora of smaller businesses that would love to take a chunk out of it. A partnership with Google to fend off the voice-based expansion of Alexa, as a sales vehicle for Amazon, made sense, but a regulator-approved blockchain platform looks like a much shinier bit of silverware for Walmart.

“With successful blockchain pilots in pork, mangoes and leafy greens that provide enhanced traceability, we are looking forward to the same success and transparency in the biopharmaceutical supply chain,” said Karim Bennis, Walmart vice president. “We believe we have to go further than offering great products that help our customers live better at everyday low prices. Our customers also need to know they can trust us to help ensure products are safe. This pilot and US Drug Supply Chain Security Act requirements will help us do just that.”

Walmart has talked up the benefits to recall speed and efficiency in the past, but the gist of the system is that it allows you to use the barcodes and back-end logistics system to chase contaminated products through the supply chain. In theory, this means you only recall and throw-out precisely the effected batch, and if you have a strong enough CRM system, then you could even go as far as reaching out directly to the affected customers.

Now, IBM would like to be the platform on which such fancy CRM integrations are built, but there are a heap of rivals it is going to have to displace – particularly with Salesforce and SAP leading the charge. For a single business, a single blockchain might be sufficient, but if we want to get anywhere near a comprehensive system for all consumer retail transactions, it is going to get incredibly messy – with so many different systems grafted onto the central chain.

The results of this pilot are meant to be published by the FDA, after the project winds up at the end of the year. The FDA will be very interested in finding out how it all went, due to the Drug Supply Chain Security Act (DSCSA) that was passed by congress, which is effectively a mandate for the FDA to create an interoperable system for tracking medication in the US.

“Blockchain could provide an important new approach to further improving trust in the biopharmaceutical supply chain,” said Mark Treshock from IBM. “We believe this is an ideal use for the technology because it can not only provide an audit trail that tracks drugs within the supply chain, it can track who has shared data and with whom, without revealing the data itself. Blockchain has the potential to transform how pharmaceutical data are controlled, managed, shared and acted upon throughout the lifetime history of a drug.”

There are many possible knock-on benefits to creating a system. It could provide a wealth of information that could be used by academics and researchers, to track how epidemics are influenced by the consumption and use of medicine. It could provide insights into how prescriptions affect outcomes, from a societal health perspective, or perhaps it will simply drive ways to better market medicines to consumers, based on the number of datasets that can be joined-up with this system.

What it should do is create better outcomes for patients, and if it fails at that, then it’s all been for naught. Of course, the term blockchain is now treated with great skepticism, so IBM is going to have a pretty big vested interest in making sure this project goes off swimmingly. After all, prescription medication is a bit more mission-critical than mangoes and pork bellies.