Data Management/Analytics / Security

Secure data transfer in the supply chain

How blockchain technology can help create secure document trails and facilitate efficient audits

By Jason Lacombe, CEO, Veratrak

The pharmaceutical industry has seen the introduction of strict serialization regulations over the past decade. The EU Falsified Medicines Directive (FMD) and the U.S. Drug Supply Chain Security Act (DSCSA) mandate for all pharmaceutical products to be serialized, tracked and verified, thereby preventing the entry of counterfeit medicines into the supply chain.

However, despite these regulations, it is still possible for counterfeit products to enter the supply chain through the use of non-compliant communications platforms and the ease of access these platforms provide to cybercriminals. Most firms in the industry continue to use email as a default platform for communications and data transfer, despite the lack of security and the risk of an email being sent to the wrong person or being infiltrated by a third party. For example, if product artwork is sent to a partner whose email account is compromised, it could then be accessible to counterfeiters, who can use this artwork to enter counterfeit products into the chain.

This article will discuss the need for an audit trail, as well as secure and compliant document transfer between partners. Additionally, it will outline how blockchain technology can help firms to comply with the industry’s serialization efforts and protect patients while creating business value.

New serialization landscape

Serialization regulations have forced companies to begin digitizing their supply chains. There is an incredible amount of value to be extracted from serialized data and the noble intent of the FMD and DSCSA has been widely welcomed by the industry and patients. 

But, gaps in the security of the supply chain remain and priority must be given to the digitization and traceability of critical documents including quality documentation, batch records and packaging artwork.

Operational forces of habit and lack of awareness means a significant portion of the industry is still sharing this information via email, which despite the efforts of service providers, remains one of the most insecure data transfer tools. This has to be addressed and there needs to be a focus on secure data and documentation sharing across the supply chain by moving away from email to dedicated software platforms. Only then will the promises of a fully secure supply chain be realized and regulations such as FMD and DSCSA be fully effective. 

One of the most promising opportunities to deliver this needed security is through the combination of software as a service (SaaS) and blockchain. Such platforms allow partnered organizations to securely sign, review, authenticate, and transmit essential documents throughout the supply chain and create an immutable audit trail of documentation beginning at production and ending at the distribution of medication.

Serialization and audit trails

In the simplest serialization scenario, there are a number of notifications sent between a pharmaceutical manufacturer, its contract partners and pharmacies in current supply chain operations. Each of these notifications are an opportunity for serialization to fail - a problem that could be solved with blockchain. While the process of serializing and verifying drug products is the primary compliance consideration for most organizations, it is vital that they remember that this process must be auditable.  

Regulatory audits can take weeks or even months and a concern that is often raised is the legitimacy of batch documentation and data integrity. Without robust audit trails, pharma companies are open to litigation and reputational risks. Data integrity and security is also a critical element of good practice (GxP) compliance.

Typically, regulators and auditors ask a market authorization holder (MAH) to produce every document associated with the release of its drugs to the market. The MAH is then obliged to contact every contract supplier (CMO, CPO, 3PL) it collaborated with and have them provide the relevant documents. 

There are often delays in the documents being sent (for any number of reasons from operational delays, to human error and misfiling) and outdated, incomplete versions are often sent over fax or email. Multiply this problem by every player in the supply chain, with each having different formats and communication methods, and it can take weeks to reconcile the information. In many cases, different versions of the same document are shared, and tampering of the documents is also possible. 

These different mechanisms for document creation, storage, retrieval and sharing are built, maintained and enforced by people and software struggles to parse these systems and verify the integrity of data as a result. 

The upshot is protracted and unreliable audits, subject to falsification and human error. 

The pharma sector is not the only industry subject to this type of regulatory control and heavy auditing across complex supply chains, and many are turning to blockchain technology to create document trails that are more secure and facilitate efficient audits. 

Blockchain provides a permanent record of transactions between parties and can be used to verify all reported transactions. Using blockchain technology, all parties that collaborate in the market release process have the same chronological record of information and an immutable audit log. This prevents any of the issues associated with existing audit processes from occurring and gives pharma companies certainty that they are providing auditors with the most recent, authentic and valid documents.

In terms of efficiency, blockchain technology enables pharma companies to reproduce an audit log of all documents associated with each batch of drugs in a matter of minutes as opposed to weeks or months. 

Secure data transfer and collaboration 

Beyond compliance and regulatory considerations there is significant operational and business value to be derived from the adoption of blockchain. Across the pharma industry, the vast majority of communication, third-party collaboration and reconciliation of critical documentation is currently done using email, fax and even post. These are not secure, prone to delay, and lack accountability. 

Current “collaboration” tools mean pharma companies find themselves waiting days and weeks without any visibility into third-party suppliers’ operations and delays in the sharing of documents results in a slower release of medicine to the market. 

These manual and pseudo digital (emails are still written and are therefore prone to human error) processes also mean that MAHs have almost no end-to-end visibility of the provenance of their medicines, their real-time status in the supply chain post-release and the corresponding documents associated with these drugs. 

In an increasingly competitive environment where the need for a leaner, quicker supply chain is business critical, better supplier collaboration and visibility is an absolute must.

Blockchain technology enables supply chain partners to more effectively collaborate on all documentation processes required to bring a drug to market, release it and track it through the supply chain. Using blockchain technology creates a single source of truth for proof of ownership, integrity, and existence for all documents uploaded and shared.

All document events (upload/new version/comments) are stored on the blockchain, providing visibility of all documentation processes. When MAHs pair a fully blockchain-enabled supply chain with serialization data they can create a transparent, accurate, verifiable, real-time picture of where drug products are, in what volume and that they are fully compliant. 

The learnings and inferences from this ‘picture’ are significant and have applications across inventory planning, supply and demand forecasting, recall management and investigating erroneous events. 

Is blockchain the answer?

Although not the solution for all global challenges, blockchain technology, when combined with other innovative technologies and serialized data, can offer substantial benefits for all stakeholders across the supply chain.

Improving security and auditability are the first steps in creating a secure supply chain that delivers against the mandate of serialization regulations such as FMD and DSCSA.

Beyond that, a data-driven methodology built on a blockchain-enabled platform will allow businesses to collaborate, gain visibility and gather actionable insights on the performance of their supply chains. The efficiencies that could be gained from this intelligence will improve operational processes, reduce costs and ensure the supply of drugs to the right place, at the right time and in the right quantity.