IBM & Walmart Pilot Blockchain for Drug Supply Chain Tracing

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Ever had that severe headache that you needed to reach for that bottle of Tylenol? Especially when a severe headache has kept you awake all night?  Clearly you were glad that you had something to relieve you of your pain. So whether it’s Tylenol, or Claritin—we all benefit from the occasional relief of pain and suffering due to the benefits of drugs.

However—not all drugs are safe. Today we hear a lot about the abuse of Fentanyl, especially as it has come from China. Fentanyl is a legitimate, potent, opioid, pain reliever available for use in medical treatment. “While it is considered to be safe and effective when used and monitored in a medical setting—it carries a high abuse potential”. (Medical News Today)

This public case is an example of the need to track drugs along the supply chain to monitor illicit drug use, contaminated supplies, and more so patients can be kept safe from counterfeit or recalled drug.

“Drug fraud is a major problem faced by many pharmaceutical companies and, according to the Health Research Funding Organization, around 10% to 30% of drugs sold in the developing world are fake and, the underground economy is valued at around $200 billion annually.”— Jura Protocol Media

 Drug Supply Chain Security Act

According to Pharmacy Today,  the Drug Supply Chain Security Act (DSCSA) will require all members of the supply chain—including pharmacies—to use an electronic, interoperable system to track a drug at the unit level throughout the entire supply chain until it reaches the patient. (Pharmacy Today)

“Pharmacies will need to verify trading partners and have access to or store transaction data,” says Pharmacy Today. Moreover, pharmacies must implement a system to detect suspect and illegitimate products.

How Blockchain Can Help

Blockchain can be used to track the entire manufacturing chain and supply of drugs from the lab to the patient. Each new transaction in the supply chain can be added, or appended, to a chain. The new transaction added to the blockchain is date and time stamped, and the blockchain is immutable—which means that tracing the data cannot be altered—it is secure.

Pharmaceutical companies and pharmacists can have a public or a private blockchain that is interoperable. Companies can have a distributed ledger shared among the parties involved in the manufacturing and distribution of the drug.

Blockchain can help with two main issues. First, it provides a mechanism for companies to track their products. It provides a secured system impermeable to counterfeit products. And, secondly, it provides stakeholders such as pharmaceutical and research labs to take action. Once a problem is identified—they’ll be able to trace and identify the exact location of the drugs.

Image Source: The trace-ability aspect contributed by the IBM blockchain.

IBM and Walmart Pilot Blockchain for Drug Traceability

According to Natalie Gagliordi, in ZDNet , IBM, KPMG, Merck and Walmart have teamed up to create proof-of-concept blockchain network—in a partnership with the US Food and Drug Administration (FDA). As part of the US Drug Supply Chain Security Act (DSCSA), the pilot is designed to assist the FDA, companies, and other organizations in the drug and pharmaceutical supply chain develop a blockchain network. It will be used to trace the delivery of drugs and pharmaceuticals from manufacturer to patient.

It is hoped that this blockchain use case will address and close the many gaps in the current drug supply chain process. Presently, tracking drugs is a time intensive effort. It takes a good deal of time to track and trace the inventory.  It’s hoped that blockchain can address issues with accuracy of the data shared with members along the supply network, and ensure integrity of all products in distribution.

“Blockchain could provide an important new approach to further improving trust in the biopharmaceutical supply chain,” Mark Treshock, IBM Blockchain in Healthcare & Life Sciences, told ZDNet. “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.”

Overall, the healthcare delivery industry, IT managers, and suppliers are optimistic about blockchain’s abilities. In particular the potential to “transform how pharmaceutical data is controlled, managed, [and] shared,” continued Treshock, is promising.

Other news accounts have noted that Walmart and IBM have been working as of 2016 to apply new levels of traceability with blockchain technology in the food supply chain. At about the same time, according to ZDNet, pharmaceutical giant Maersk and IBM started to collaborate in 2016, and in 2018 they formed a joint venture to use blockchain to create a global trade platform.


The pharmaceutical industry has a long history of working to monitor and manage drugs from being abused. Indeed, the FDA has defined five levels of scheduled drugs from over the counter to controlled agents to be used only for research purposes. In addition to scheduled agents, there are issues of knock of drugs that are ineffective or simply dangerous, to supplies that need to be recalled.

Blockchain’s traceability and ability to provide immutable records makes it an attractive option that no less than the FDA and data driven giants like IBM are collaborating to ensure doctors and patients are protected.


Eric W. is a self-educated ghost writer who for the past seven years has been involved in Blockchain, Cryptocurrency, and Digital advertising sectors as Project Director, Miner, and NRA (Network Resource Application).

Contact Eric


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