Walmart joins FDA blockchain pilot for prescription drugs

After teaming up with IBM to pilot a blockchain initiative to bolster safety in the food supply chain, Walmart now plans to do the same for prescription drugs.

Walmart, IBM, Merck and KPMG on Thursday said they’ve been named by the Food and Drug Administration to test a blockchain-based solution for identifying, tracking and tracing prescription drugs and vaccines distributed in the United States.

The effort stems from the U.S. Drug Supply Chain Security Act (DSCSA), enacted in 2013. The legislation calls for the creation of an electronic, interoperable, track-and-trace system for prescription medicines to help the FDA flag drugs that may be counterfeit, stolen, contaminated or otherwise harmful. The system also would help in the detection and removal of potentially dangerous drugs from the nation’s pharmaceutical supply chain.

In 2017, Walmart joined with The Kroger Co. and food manufacturers and distributors to work with IBM on a blockchain system to strengthen safety in the food supply chain. The collaboration resulted in last fall’s launch of the IBM Food Trust network, a blockchain-based cloud service that makes it easier for retailers, suppliers, growers and food industry service providers to access data from across the food ecosystem, speeding traceability and providing a higher level of trusted information.

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“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, vice president of strategic planning and implementation for health and wellness at Walmart. “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 U.S. Drug Supply Chain Security Act requirements will help us do just that.”

Plans call for IBM, Walmart, Merck and KPMG to develop a shared, permissioned blockchain network that allows real-time monitoring of drugs. The companies said the network would enable faster tracking and tracing of inventory; timely retrieval of reliable distribution data; more accurate information shared among members; and more transparency for the integrity of products in the supply chain, including whether medicines are kept at the correct temperature.

“Blockchain could provide an important new approach to further improving trust in the biopharmaceutical supply chain,” according to Mark Treshock, leader for blockchain in health care and life sciences at IBM Global Solutions. “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 is controlled, managed, shared and acted upon throughout the lifetime history of a drug.”

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The pilot is scheduled to be completed in the fourth quarter of 2019, with results to be published in an FDA DSCSA program report. At that time, the project’s participants will evaluate the next steps.

“Our supply chain strategy, planning and logistics are built around the customers and patients we serve,” said Craig Kennedy, senior vice president of supply chain at drugmaker Merck. “Reliable and verifiable supply helps improve confidence among all the stakeholders — especially patients — while also strengthening the foundation of our business.”

Under a blockchain system, products are traced as they move through the supply chain, and a digital record is created of every transaction or interaction. The IBM Food Trust network allows food to be traced back to its source in as soon as seconds, instead of days or weeks, and provides more data integrity because transactions are endorsed by multiple parties.

“Blockchain’s innate ability within a private, permissioned network to provide an ‘immutable record’ makes it a logical tool to deploy to help address DSCSA compliance requirements,” commented Arun Ghosh, KPMG Blockchain Leader. “The ability to leverage existing cloud infrastructure is making enterprise blockchain increasingly affordable and adaptable, helping drug manufacturers, distributors and dispensers meet their patient safety and supply chain integrity goals.”

Besides being the biggest U.S. grocery retailer, with sales topping $184 billion, Walmart is the nation’s third-largest pharmacy retailer, with estimated prescription drug revenues of $20.9 billion, according to the Drug Channels Institute.