How is BlockChain Contributing to the Efficient Management of Pharma Supply Chain?

The Life Sciences or Pharmaceutical industry has been struggling to deal with the challenges related to drug counterfeiting and ineffective supply chain management. Apart from this, it is also combating the high cost of bringing new drugs to the market, along with new standards. As a result, preventing theft, counterfeiting and forgery, while minimizing cost and improving compliance has become the utmost priority for pharmaceutical and biotech companies. To remain competitive, businesses require adopting a game-changing technology that can resolve most, if not all the current issues associated with compliance and traceability.

Blockchain – A Distributed Ledger Technology (DLT) is anticipated to be the silver bullet that is disrupting the supply chain industry, and aptly solves most, if not all the existing problems. Besides bringing control and enhanced visibility into the network for addressing issues pertaining to traceability and counterfeiting, the use of Smart Contracts helps automate various processes in the supply chain bringing cost efficiencies.

Given the complex pharmaceutical ecosystem, it becomes very difficult for anyone within the pharmaceutical supply chain to track products’ authenticity from start to finish. With a Blockchain solution in place, the much-needed trust between all the participants of the value chain i.e. pharma companies, manufacturers, trading partners, pharmacies, patients, would be secured. All this and more with the added benefit of supporting compliance with regulatory bodies into the mix. While the conventional tracking system has to an extent resolved the pain points, it still cannot ensure the security and integrity of data that has become a cause of concern, especially in the light of recent cyber security attacks.

Listed below are few benefits of introducing Block chain technology into the pharma supply chain:

Blockchain pharma supply chain

  • Combating Drug Counterfeiting: Drug counterfeiting has become a pressing issue both in terms of economic cost, as well as patient safety. By integrating Blockchain into the pharma supply chain, much required trust and transparency is established within the network. Such a platform allows tracking of pharmaceutical supplies to all the participants of the supply chain. So, while the stakeholders gain the power to maximize their efficiency during drug distribution, patients on the other hand can ensure their safety by verifying the drugs independently at every stage.
  • Ensuring Data Integrity: Blockchain technology allows distributed record keeping through its digital ledger. However, the data flowing in the chain is immutable as every new transaction is authenticated by network consensus. The transactions that are once authenticated by the consensus mechanism are practically tamper-proof and cannot be modified. This establishes high-level of data integrity, thereby making data secure, compliant and available for all the participants.
  • Improved Traceability: Keeping track of multiple transactions performed by a multitude of participants is one of the thorniest supply chain challenges. The sheer amount of data generated poses a challenge, even when some of the participants have automated systems to trace and then track the progression of drug through the supply chain.
    Blockchain ensures integrity of the supply chain through a closed ledger system that facilitates trusted exchange between the stakeholders, along with the benefit of audit trail that fulfills the evolving regulatory requirements.
  • Elevated Regulatory Compliance: Despite stringent regulatory policies, the challenges around ensuring ‘trustless’ compliance still exist in the pharmaceutical industry. By incorporating Blockchain, pharma supply chain pain points such as product counterfeiting, condition of drugs in transit, data security etc. can be curbed. The ‘smart contract’ element of the Blockchain defines terms and agreement that can help healthcare regulators and stakeholders ensure better compliance.

Blockchain has the potential to transform businesses by removing inefficiencies, speeding up transactions while enabling new and innovative business models. However, in the pharmaceutical industry, Blockchain supports wide range of functions, both within and outside the supply chain. But as of now, the drug supply chain tends to be the most appropriate candidate that stands to benefit the most from this ground-breaking technology. This would pave way for a drug supply system that is more efficient, secure and less expensive to function in.

Sofocle’s sofoChain solution provides end to end traceability using Blockchain along with Smart Contracts to manage promotions, payments, SLAs and contracts in the Pharma supply chain. To know more about sofoChain solution, drop us an E-mail at [email protected] or Contact Us.

Blockchain Disrupting Supply Chain Finance

Blockchain, the underlying technology behind Bitcoin has established itself to be beneficial for plethora of industries. To start with, it has revolutionized payments and settlements in the financial domain. Following that, it is impacting other areas of finance like lending, wealth management and insurance. Out of this, Supply Chain financing forms an interesting use case as it is part of Supply Chain Management (SCM) which itself is undergoing major disruption.

Blockchain?

Blockchain is a chain of transaction records in a database like a financial ledger. The transactions are recorded in the database using digital encryption to augment the security. For more about Blockchain, follow this post.

Blockchain adds trust to the network of users owing to features like immutability and transparency.

Challenges in existing Supply Chain Financing process

The traditional supply chain financing process is marred with manual work and inefficiencies. If we talk about Vendor Financing process, it depends largely on the invoice generated by the seller and approved by the buyer which is then submitted to lender for discounting. Since multiple parties are involved each with its own separate database, the chances of fraudulent invoices and double spending of invoice increases.

Secondly, in Vendor Financing, the payments are made to Seller by lender against the invoice whereas the repayments are taken from Buyer. This process is largely offline today increasing chances of delayed or missed payments.

Additionally, Buyer at times take a huge time to approve the invoice leading to delayed financing to the Seller which results in further cost pressure to the Seller.

blockchain_disrupting_finance_sofocle

Supply Chain Financing with Blockchain

Blockchain along with the use of Smart Contracts can streamline the incumbent supply chain processes.

  1. The Blockchain will centralize the ledger so that information of critical documents like invoices, GRN etc are written securely to Blockchain and accessible to all the relevant parties in real-time.
  2. The payment disbursal to the Seller and repayment back from Buyer can be automated using Smart Contracts that will trigger automatically based on pre-defined events.
  3. SLAs can be written on Blockchain in the form of Smart Contracts to reduce the inefficiencies at various stages leading to timely financing to the Seller.

So, as we see Blockchain helps both the Buyer and Seller to manage their working capital requirements as well as lender to prevent fraudulent invoices and double spending.

Sofocle Technologies has built a Blockchain based solution for Supply Chain Financing. For further details or consultation, Contact Us.