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Blockchain In Pharmaceutical Industry

Areas of Application and Practical Tips

Whether in banking, trade or logistics: blockchain is considered “the next big thing”. In fact, it also makes sense for the healthcare industry to take a closer look at what the new technology has to offer and where it could potentially be used in this sector. What aspects should companies consider in order to benefit from the use of blockchain?

Maximum Data Transparency

In simple terms, blockchain works like a digital receipt for transactions between computers. The receipt documents every change in detail, but is saved locally and transparently distributed among many computers, not just stored at one location. As a result, manipulation of the data is unlikely. For instance data can only be manipulated under extreme conditions, when an entity holds 50 % or more of the network. And that is precisely where the added value of this technology lies: creating transparency where trust is not enough. In other words, exactly where strict compliance standards apply and the requirement to audit processes.

Considering the Disadvantages of Decentralization

Consequently, the healthcare industry seems to hold many areas that might be suitable for the use of blockchain. The first time companies look into blockchain, however, they often ignore one key point, to consider the disadvantages of decentralization as well. There are three topics that are particularly relevant in that case: first, since the technology is still in the early stage of its development, considerable slow-downs in performance, such as in process speed, can be expected. That is because the data that is saved to the blockchain is never deleted. Second, the scalability is still pretty poor1 , even if theoretical improvements already exist2 . We solve these challenges, for example, by managing as little data as possible on the blockchain.

Third, companies should keep the General Data Protection Regulation in mind. What many people are not aware of: even if the blockchain does encrypt or pseudonymize personal data, that data is still considered personal data. However, decentralization basically means that the data is available to all parties (i.e., the full nodes). Some companies advertise that patients can use blockchain to “gain control over their data”, as it can be assigned to a single person.

The highly-praised availability of “data security” through blockchain, however, refers to data integrity, and not to data security. Furthermore, the right to delete data cannot be processed, at least not without losing the advantage of transparency. It is for these reasons that personal data cannot be managed on the blockchain.

Compliance when Using Blockchain

Thus, optimal applications for blockchain can be found where decentralization results in verifiable added value. Yet, that value must be greater than the technological disadvantages blockchain currently brings with it.

In addition, it is also important to keep a continuous eye on basic regulatory conditions, especially in the healthcare industry. In regards to databases, conditions that specifically come to mind include the GxP regulations pursuant to EudraLex, the GAMP5 guidelines for computer system validation (pursuant to EU-GMP Annex 11), as well as the GDPR. However, these basic conditions also apply for the database solutions of established or older technologies.

This means, that computer system validation would have to be conducted in order to continuously guarantee the aspects of patient security, product quality and data integrity. Since data integrity is one of the greatest advantages of decentralization, blockchain does, from a GxP perspective, harbor far fewer risks than mere cloud databases