Pharmaceutical Commerce - July/August 2017 - 23

Information Technology

Fig. 2. Various data-communication methods have limitations to meet
expected DSCSA requirements. Key: Dark green-sufficient; light green-
some limitations; red-fails. Credit: J. Stollman

Fig. 3. As blockchain technology is generally understood, it is well suited to meeting
operational requirements of DSCSA compliance. Credit: C4SCS

Lightning Network-the list is long and
growing. A parallel effort has been going on
to establish a reliable identity-management
protocol; in this context, the efforts of the
SAFE-Biopharma organization is notable,
since its processes are tailored to the needs
of the life sciences industries.
Another foundational component of
blockchain networks is how they are
administered-who makes and enforces
rules about members and permissible
actions within the network? Some platforms
are designed intentionally so that no one is
the administrator-the system itself ensures
that all parties are legitimate and carrying
out legitimate activities. Others call for
a centralized administrative function.
These concepts, in turn, define a "public"
blockchain network-where anyone can
participate-from a private network, where
only trusted parties can engage.
The DSCSA compliance endpoint, for all
this technology, is a system where each sale
of a specific package of pharmaceuticals can
be traced back to the point of origin, and
each party involved in the chain of custody
is verified. It is possible to limit how much
data is exposed during a track-and-trace
process by limits imposed either by the
network itself or by specific trading partners
(for example, no one is interested in sharing
the price information of a transaction)-
but the details of this remain to be worked
Bob Celeste at C4SCS has identified five

obstacles to implementing blockchain for
DSCSA today:
1. Establishing an electronic connection
between non-adjacent trading partners,
i.e., a connection between, say, a
wholesaler who bought product from
a manufacturer directly, then sold it
to a second wholesaler. The second
wholesaler is "non-adjacent" to the
2. Establishing trust between these
trading partners, that is, to verify the
identity of the parties.
3. Sha r i ng requ i red d ata w ithout
inadvertently exposing proprietary
4. Reduce the potential activity required
of trading partners-for example,
attempting to manually account for
the transaction records of a returned
5. Funding the architecture.
C4SCS has created a simulator to run
analyses of blockchain-based supplychain activities, such as handling a product
return, or matching a product's transaction
with discounts such as copay cards. There
can be various ways to record and share the
information, with pluses and minuses for each
At a June meeting organized by the IEEE
Society (which could have a hand in creating
an industry standard for blockchain, as it

has for a wide variety of electronic or digital
technologies), Jeff Stollman, an industry
consultant, assessed the potential advantages
and disadvantages of current concepts for
DSCSA traceability. (Fig. 2) The simplest, a
conventional relational database managed by
each manufacturer for its products, falls down
because each database owner is responsible
for the accuracy, reliability and security of its
own database.
The "breadcrumb" approach-where
transaction records are shared between each
pair of trading partners ("one up and one
down") but no one else-is appealing for its
practicality, but falls down on many aspects
of data security, and is probably more costly
if implemented, since each trading partner
must maintain its own database and dataaccess system. A public blockchain has
problems with access security. A private
blockchain, which Stollman specifies as
having decentralized administration, has
questionable access and confidentiality issues,
while only a closed blockchain, distinguished
by having centralized control, meets all the
potential criteria he has called out.
There is both a potential downside to
current plans for DSCSA compliance (which
are basically to have individual databases and
let FDA, or other regulator, figure out how
to access information when an investigation
needs to occur), and a potential upside to
use of blockchain technology, says Stollman.
"The discovery of 'suspect' product will occur
only when there is a public health crisis. The
likelihood that the thousands of repositories
holding each firm's data in its own silo will
all be available and operationally compatible
when a crisis does arise is statistically unlikely."
On the other hand, "The potential offered by
blockchain is to proactively discover suspect
product in the supply chain before a bad drug
gets into the hands of the public and creates a
public health crisis. The technology is available
to do this." However, there are "significant"
governance issues to be resolved over how the
blockchain would be managed.
Getting a handle on those governance
issues is a large part of what Celeste's Center
for Supply Chain Studies is focused on, at
least when it comes to blockchain. Celeste says
that the simulation software the group uses
has been set up with the typical parameters
of various trading partners in the supply
chain-manufacturer, wholesaler, retailer
and the like-and then scenarios can be
played out based on various criteria, such as
the appearance of an unaccounted-for serial
number in the supply chain, or a product
recall with expired product.
"The concept of 'smart contracts,' which
is built into the Ethereum platform, looks
promising," he says, based on the fact that the
code could be set up to answer a productauthentication question (does this serial
number exist?) without necessarily revealing
every piece of information about the serial
number. And it can be done very quickly-
valuable in a scenario, for example, where a
wholesaler is trying to verify returned product
that is still saleable.
Celeste's work group has attracted a

cross-section of industry players-and that
has value all by itself since each player has a
different perspective on needs and capabilities.
Participants include Pfizer and Merck,
Cardinal Health and AmerisourceBergen,
the Geisinger health system, the Healthcare
Distribution Alliance, Rx-360 (an industry
consortium), and industry software developers
iSolve, TraceLink, Unisys and Verify Brand.
Mention of longtime traceability vendors
like TraceLink and Verify Brand brings up
the interesting question whether blockchain
will replace part of what these vendors have
been doing-creating the mechanism by
which stored data can be made available to
trading partners. (Fig. 3) The consensus, at
the moment, is that blockchain technology is
complementary and not competitive to the
software that collects serial numbers from
packaging lines and stores them.
Initial 'coin' offering
At i S o l ve , C E O G o r d o n Ta m p o l
emphasizes that his company provides
blockchain consulting services and code that
"sits on top of" a blockchain platform (such as
Ethereum or HyperLedger), and is therefore
platform-agnostic. The company is working
on multiple blockchain applications besides
DSCSA compliance, but for that application
in particular, it is preparing to launch a pilot,
using its distributed-ledger software (which
has been branded as Advanced Digital
Ledger Technology, or ADLT) and-hold
your breath-a cryptocurrency it is branding
as PharmaCoin. (Side note: it has become
common, among blockchain startups, to
hold an "initial coin offering," or ICO, rather
than the conventional IPO of startups.
Investors pay dollars for coin, and then the
coin becomes the medium of transactions
within the network, with participants
earning coins by virtue of hosting data or
providing network support. If the network
proves useful, the coin will rise in value,
benefitting the initial investors and creating a
way for new participants to join in.)
"Given that we did not see the industry
coming together around a single solution,
we implemented a revenue model using
the ADLT PharmaCoin as a way to offset
the implementation cost and to incentivize
trade partners for data acquisition or
providing consensus," says Tampol. "To
ensure a more predictable cost to the life
sciences and healthcare industries, we will
alter the transaction cost to place/retrieve
information from the Blockchain to account
for external market forces."
Efforts like C4SCS, iSolve and the other
developers in this field have a ways to go
before there will be an industry consensus
around addressing DSCSA compliance; most
industry observers feel that it's still early days
for commercial application. On the other
hand, the energy around blockchain in other
industries, such as financial services and
banking, is truly intense. It could be that, by
2023, enough commercial activity will have
occurred that a transition to a blockchainenabled traceability network will become a
matter of course.

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Table of Contents for the Digital Edition of Pharmaceutical Commerce - July/August 2017

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