Chapter 21 - Deployment considerations for implementing blockchain technology in the pharmaceutical industry

Abstract

Blockchain is a technology that has found promise in the supply chain and logistics sector, offering an approach to establishing distributed ledger (DL) functions to centrally processed transactions in a decentralized manner. This feature may enhance regulatory compliance and product fulfillment in pharmaceutical supply chains. This chapter reviews primary applications in processing pharmaceuticals, including tracking and tracing of product necessary to assure integrity and safety, inventory management, and clinical trial efficacy. Based on industry reference models, issues emerge regarding how a DL effectively scales with transaction volume. An illustrative example demonstrates how a DL consolidates transaction volume and stabilizes variability, focusing on transactions related to exceptional situations such as those related to returns, commissioning issues, delivery disturbances, and recalls. While a DL can consolidate pairwise communication between trading partners, the net effect of this replacement diminishes as transaction rates and variability grows throughout the network. Furthermore, we demonstrate how capacity savings grow with network size, but gradually approach a maximum level. While a DL can stabilize transaction variability as transaction rates increase, the capacity savings gradually decrease. Future research areas include studies to corroborate results, explore data management, permission and access methods, partner collaboration, and implementation costs.