Introduction More people have died due to consuming counterfeit medicines than those who have died of terrorism in the last 40 years. The fake medicine market is not only a pharmaceutical crime but it is a global epidemic. The World Health Organization estimates that 1% of drugs in the US are counterfeit, 10% in Europe and 30% in emerging regions (Latin America, Middle East, Africa, etc). While the EU, China, and the US offer more robust track and trace and serialization guidance and laws, at the end of the day we just have more compliance and less resolution. Is there a means that can potentially combine the regulatory guidance, human resolve, and technology to better safeguard the drug supply chain? Within one value chain – the pharmaceutical supply chain for drug products – many use cases exist across the board where there’s an opportunity to leverage blockchain technology. Why? Because in this value chain there are many points where processes break down due to a lack of transparency and coordination. Now, in the hyper-connected and ever evolving world, transparency is the new power. Need For Transparency and Traceability in Manufacturing Supply Chains Supply chain visibility is a key business challenge, with most companies having little or no information on their own second and third tier suppliers. End to end supply chain transparency and visibility can help model the flow of products from raw materials to manufacturing, testing, and finished goods, enabling new kinds of analytics for operations, risk and sustainability. Transparency enables one to understand the effects and consequences of a decision on a product and furthers understanding of environmental circumstances. However, managing information and control of transparent interactions about every product’s supply chain can be a very difficult task. It requires accurate data collection and secure data storage to enable a flow of trusted information between parties. Currently, this responsibility is borne by non-profit, governmental entities or other third parties, through centralized information depositories. Relying on one single organization to broker such sensitive and valuable information requires a great deal of trust to be invested by every actor in a supply chain. Such organization (as an entity of the manufacturing system) will also gain significant power through the possession of this valuable data, which could be misused to extort or damage organizations if biased. Even if this entity can be trusted to be a good actor, it must possess the technical capabilities to store and handle this information effectively. A major issue of having this type of centralized system, is that it becomes a single point of failure which leaves the whole system vulnerable to failure (e.g. hacking, or corruption). Various incidents in the past decades have shown that even a tight and costly security mechanism cannot guarantee the complete data security, leaving organizations in a network at potential risk. Until recently, a centralized system was the most practical approach to achieve data security and controlled transparency in supply chains and services, until the discovery of the Blockchain. What is a Blockchain? Basically, a blockchain could be seen as a distributed ledger: a chronological chain of ‘blocks’ where each block contains a record of valid network activity since the last block was added to the chain . Each block could be defined as an encrypted piece of information. Theoretically, anyone can add data to the chain of blocks by transacting in the network, anyone can review this data at any time, but no one can change it without adequate authorization. As a result, a blockchain is a complete and immutable history of network activities, which are shared among all nodes of a distributed network. Blockchain technology for the first time, facilitates two or more entities that may or may not know or trust each other to securely exchange value over the internet without including a third party. Instead, the requirement for validation of transactions is achieved through a process known as ‘mining’ that ensures the security and validity of the information added to the chain. Blockchain technology can be explained as the technology that powers the Internet of Transactions . A significant property of blockchains is that it operates on a decentralized network meaning there is no single entity that controls or governs the system. Eliminating the need for third party intermediation or control facilitates towards removing friction in all types of value exchange that can arise in the form of costs, risk, information and control . Another powerful characteristic of a blockchain is its ability to get a distributed network to reach consensus regarding the state of data and agreeing on the rules of the network without a central governing entity. Consequently, improvement to a system can be proposed by any user, but are implemented only if accepted by all parties involved in the network, hence, enhanced transparency and trust. In a typical blockchain interaction, trust among a distributed network is possible due to the validation or mining process where each new transaction is verified by the whole network before being added to a blockchain. Mining is the process of adding new blocks of data onto the ongoing chain through validation by each node on the network known as ‘miners’. A miner adds each new block on the chain after solving a cryptographic algorithm, which must be accepted by majority or all (based on the definition of the block) of the nodes in the network as a valid data. The network rewards the miner for adding a valid block to the chain by some form of digital credit. This credit is the primary incentive for miners to constantly validate and maintain the consistency of data throughout the network. The reward will be in the form of financial gains, or an approval for completion of an event once the block is accepted by the whole network. Miners are independent entities in a network and no single miner is capable of changing, or adding invalid data without being detected by the rest of the network as a ‘bad actor’. When the network rejects a block, the miner does not receive the network reward, however the rejected block is logged in the system, allowing the network to recognize the miner as a possible threat. This method significantly improves the traceability in a system. Technological Advantages of Blockchain Technology Blockchain inherently provides several key technological advantages to users that are implications of its structural architecture. Some of which including durability, transparency, immutability and process integrity are described below. Durability – Decentralized networks eliminate single points of failure as opposed to centralized systems. This distribution of risk among its nodes makes blockchains much more durable than centralized systems and are better suited to deter malicious accesses. Transparency – An identical copy of a blockchain is maintained by each node on the network, allowing auditing and inspecting of the data sets in real time. This level of transparency makes network activities and operations highly visible, thereby reducing the need for trust. Immutability – Data that is stored on a distributed public blockchain is practically immutable due to the need for validation by other nodes and traceability of changes. This allows users to operate with the highest degree of confidence that the chain of data is unaltered and accurate . Process Integrity – Distributed open source protocols are by nature executed exactly as written in the code. Users can be certain that actions described on the protocol are executed correctly and timely without the need for human interventionPossible Implications of Blockchain in the Pharmaceutical Industry The innovation of the blockchain is about to revolutionize the finance sector. In this context, it is particularly interesting how the technology will develop and which implications will be used in other industries. Given the great amount of money spent by pharmaceutical companies on development, research & development and manufacturing, the blockchain will gain tremendous amounts of opportunity and traction within this industry and this article will be especially focusing on the benefits blockchain applications may bring to this highly regulated market which relies on compliance with strict regulations and industry standards.As a method of user validation, proof of work and smart contracts, the blockchain technology may change how organizations manage and record data, by providing security and transparency for all stakeholders. In the pharmaceutical industry, drug development requires certain series of protocols and processes to take place. Data is acquired in one department and required to be transferred to another, drugs are transferred to wholesale distributers prior to delivery to the patient, patient data integrity needs to be maintained and the access to such data controlled, to name just a few examples. Of major concern throughout the drug development and distribution process are patient safety, product quality and data integrity, which puts the use of validated transparent & secured technology at center stage of these processes. This clearly offers an opportunity for blockchain applications to enhance and simplify current processes. Using Blockchain to secure the Pharmaceutical Supply Chain When thinking of possibilities to use blockchain technology in the pharmaceutical industry, the example of the pharma supply chain makes an extremely strong case: Drugs are developed and manufactured at manufacturing sites and often transferred to wholesale distributers before they are further distributed to pharmacies and retail companies before delivery to patients takes place. The blockchain technology serves as an opportunity to verify the integrity of the drug supply chain and enhance new drug development by leveraging the blockchain to support and manage the drug development process. While currently, falsified and substandard pharmaceuticals entering the legal supply chain results in a major threat to public health, blockchain technology can improve currently implemented processes by utilizing distributed ledgers, smart contracts, transfer of assets and proof of work. The technologies by which the drugs are identified and linked with their digital representation on the blockchain (e.g., serial numbers, bar codes, digital tags like RFID and NFC, genetic tags) is crucial in uniquely identifying a physical good with its digital counterpart. Identities are recorded in production and manufacturing programs, and for simplicity and easy adoption we expect them to take the form of existing barcodes and serial numbers which are linked to blockchain identifiers using a secure hash. A consumer A can read the unique code on the drug using his smartphone and could see the whole lifecycle of the product i.e. from raw materials to its current state. Since all this data is on blockchain, its more than secure and immutable. This will ensure consumer that the product he is buying is indeed genuine. While an initial introduction of this technology may be in the form of a discrete and removable label, easily verified through a smartphone-readable QR-code, a more progressive possibility would be a conspicuous hologramatic or RFID tag, embedded in the brand label, allowing the owner to prove the authenticity of the product at any time by accessing the data on the blockchain through the tag. By design, every transaction along a supply chain on the blockchain is fully auditable. By inspecting the blockchain, smartphone applications can aggregate and display information to customers in a real-time manner; furthermore, due to the strong integrity properties of the blockchain, this information can be genuinely trusted. We are looking into authenticity during "change of hands" of products for e.g. a product moves from manufacturer to a distributor. We need to ensure security and authenticity at every stage of supply chain.