On June, 18th, MediLedger announced that Walmart and Walgreens are joining their pilot project. Other members of the pharmaceutical industry have already backed the project, including the three largest pharmaceutical wholesalers (McKesson, AmerisourceBergen, and Cardinal Health).
Additional partners include Pfizer, Genentech, a member of the Roche Group, Amgen, Gilead, FFF Enterprises, Dermira, and Eli Lilly. The attention from these major players is substantial, so it’s no surprise that further investigation of the MediLedger technology is incredibly promising.
MediLedger’s application of blockchain allows the pharmaceutical industry to verify the validity of raw materials and drugs without revealing any private business intelligence. Only public data and transaction proofs go on the blockchain, so companies will not need to reveal any private data. Because the ledger is immutable, drug validations occur quickly and with a high degree of accuracy. Because all the data in the ledger involves storage in each node, validation is automated and fast. Industry participants will own the blockchain nodes that will verify additions to the ledger. The nature of this decentralized network allows for increased security, as there is not a single point of failure or a central administrator.
Rollout Timeline and Additional Features
MediLedger is currently working on many different aspects of their technology. This includes a product verification system for salable returns. It enhances drug verification, confidential changes of ownership, contracting, and chargebacks. They will go public in October of 2019 with a tested and proven combination look-up directory and verification routing service system for saleable returns that is compliant with the DSCSA. MediLedger continues to build out its technology for other aspects of the pharmaceutical industry that can benefit from blockchain, such as smart contracts and other automated features to navigate the complexities of pharmaceutical activities.
Benefits to Walgreens and Walmart
Large retailers like Walgreens and Walmart need to ensure the safety and validity of their products to retain the trust of consumers. Backing pilots like MediLedger will help give these projects the resources and exposure they need to get to bring refined technology to market quickly. Roughly 70 percent of Walgreens’ revenue comes from the pharmacy, so securing this revenue stream is imperative. Walmart may not seem like a pharmaceutical industry giant to the average consumer, but its pharmacy makes around $20.5 billion in revenue every year. Because these revenue streams are so lucrative, it is in retailer’s best interest to support blockchain technologies that will increase the security, efficiency, and transparency of the pharmaceutical supply chain.
The Need for a Pharmaceutical Blockchain
According to the US Government Accountability Office, The pharmaceutical industry accounts for 12 percent of all personal health care service spending, resulting in sales revenue of $775 billion. As the industry rapidly expands, fraud becomes more difficult to monitor and control.
The Drug Supply Chain Security Act
To combat the pharmaceutical industry’s growing fraud problem, Congress passed the Drug Supply Chain Security Act (DSCSA) in November of 2013. The act “outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.” The DSCSA is overseeing a pilot program to give additional support to projects attempting to solve the problem. There are multiple blockchain solutions among the 20 pilot projects in the program, but recently, MediLedger, in particular, has garnered a lot of attention from big players in the pharmaceutical industry.