Monday, June 4, 2018

Blockchain: Grounded Optimism

I considered a number of angles for how to approach this post on blockchain and what I realized is that my thoughts on blockchain are conflicted- I simultaneously have a sense of both immense potential and immense apprehension when considering this trend-worthy technology.  What I concluded is that my polarity in thoughts is actually a reflection of the technology itself- one that seeks to provide the function of a highly secure, centralized ledger in a highly decentralized manner.  My goal for this post isn’t to be ‘for’ or ‘against’ blockchain, but rather provide an opinion of how best to approach the concept and the vendors which provide blockchain offerings.

First and foremost, I am not a blockchain expert.  As someone with a technical background I understand its basic concepts and its place in an overall solution stack but I should not be pegged to give a presentation on the topic anytime soon-  and yet I worry I could- and therein lies my first conflicting thought…

I feel there are extremely intelligent and well-intentioned people putting massive amounts of time and effort into developing solutions leveraging blockchain…….
And I also feel there are many ill-intentioned people putting massive amounts of time and effort into marketing blockchain solely for financial gains….

The problem is:  I can’t always tell the difference between the two.  Part of this is caused by the ambitious, and sometimes downright confusing, claims made about blockchain’s potential.  In the span of a week I saw articles claiming blockchain could solve the refugee crisis, the worlds water problem, and fly a rocket ship.   It’s not that I dismiss the claims, but the marketing is so beyond saturated that the well-intentioned initiatives are at risk of getting lost in the sea of opportunity-chasers. There is immense marketing value in using the word ‘blockchain’ right now.    Even in writing this post I wondered “Will people think I’m talking about blockchain just because it will attract ‘clicks’?”   That’s unfortunate.

The other challenge of such wide-ranging claims is ensuring we don’t lose sight of the reality that blockchain by itself cannot do any of those things…

As a distributed ledger technology blockchain offers tangible security and redundancy benefits, while creating a common data repository that can span across organizations.
As a distributed ledger technology blockchain isn’t a solution by itself, it requires business logic and presentation layers to ultimately make the data relevant and valuable to users

Take the example of diamonds tracked by a solution leveraging blockchain (Everledger).  The headlines you’ll see about that project read something like “Diamonds tracked from mine to customer using blockchain”.   Here’s an interesting observation- I’m not sure in my career I’ve experienced a scenario in which such a highly technical concept (blockchain), usually reserved for the IT department to swoon/debate over, is almost always put front-and-center as the singular driver for making such functional innovation possible. Hence why so many C-suites now have something-blockchain-related on their strategic agenda (yet- with all due respect- most probably couldn’t explain what it does)

It therefore warrants a bit of caution-  back to the diamond example- when diving into the project itself you find that blockchain is just one component in a total solution (e.g. business logic, reporting tools).  Take a look at the sample traceability report provided- It’s clean, elegant, user-focused- but again blockchain by itself doesn’t magically generate that report.  Can you say because blockchain is used as part of the solution the data is more secure and transparent? Absolutely - the overall solution is ‘better’ because of the benefits blockchain provides.  But again, the key phrase there is ‘overall solution’.

The importance of making this point is to ensure industries and those responsible for procuring solutions within organizations recognize when vendors are simply using the term ‘blockchain’ in hopes of gaining a marketing bump vs vendors who actually understand how the technology fits into an overall solution.   To put it more succinctly-  An inadequate or immature technology platform can’t ‘add blockchain’ and all-of-a-sudden become a viable solution.

Finally, let’s turn our attention to where (in my opinion) blockchain comes into play for pharma serialization/traceability.  I think blockchain in pharma is intriguing- there is definite potential but there are also needs to be a sense of grounding.  While I don’t see myself being involved in actually implementing blockchain solutions in the next 6 months, I believe the work that is being done to determine blockchain’s place in the space is immensely important- primarily so that the pharma industry doesn’t get ‘passed up’ in terms of adoption.

I think the industry, by and large, first has to come to grips with the fact that most of the effort and investment made to date has been on solutions that can only barely be considered traceability solutions and instead recognize they are serialization compliance solutions.  This is the first step to then understanding how true supply chain traceability, leveraging blockchain, can provide serialization compliance and also significant business benefits.

I think blockchain is clearly the leading candidate to create the ‘virtual’ centralized database for US DSCSA 2023 compliance that is so sorely missing today.  It will also help if the FDA provides more strict guidance/requirements on blockchain’s place- even so far as identifying a blockchain provider.  It's likely a pipe dream but I say this because, the pharma ‘blockchain’, as is true for any industry, should be governed by an independent, not-for-profit entity (assuming the FDA doesn’t sign up to do it themselves).  Such a path would also provide the opportunity to more firmly enforce the use of global standards.  I worry in lieu of such a guidance from the FDA we will be left with numerous commercial ‘blockchains’ each with their own rules of engagement and integration requirements- essentially replicating the same data exchange challenges the industry faces today.

How vendors approach blockchain is equally intriguing.  Certainly, a new set of names have recently appeared- companies looking to use their foundation in blockchain as their foray into the space.  In the near term this is likely to bring about some interesting new partnerships but over time it’s only natural for these providers to move more into the traditional L4/L5 arenas- something that should only be viewed as a positive by the industry as more competition is still sorely needed.  We also can’t deny that some of the more traditional track and trace vendors don’t want to see blockchain in pharma succeed (despite what their marketing might say) for the simple reason that the benefit of blockchain- providing a connected ecosystem for the exchange of traceability data between disparate organizations- strikes at the very heart of the singular perceived benefit which millions of dollars has been spent promoting.  Identifying such vendors will be easy.  
  • Those who understand blockchain’s role in the space will offer support for blockchain integration- recognizing the need for separation between the ‘open’ data exchange layer (e.g. blockchain) and the applications which can submit/retrieve data from the blockchain and make it relevant to its customers.   
  • Those on the defensive will offer ‘blockchain’ as a component of its own solution- continuing the ‘closed’ mentality and ultimately limiting the benefits its customers realize by adding complexity to the data exchange.

If blockchain does revolutionize pharma serialization/traceability and ultimately provide that pan-industry data sharing/management capability then interestingly the differentiators for pharma serialization L4/L5 providers will experience a long-overdue correction.  Focus will shift (as it always should have been) towards items which today are viewed more as nice-to-have intangibles-  platform ease of use, user-centric reporting, analytics, platform stability and customer service.  Remember- simply adding blockchain to your pharma serialization vendor isn’t going to bring about some magical turnaround- if the platform doesn’t work today, it’s still not going to work with blockchain.

As for practical adoption in the industry- I’d love to see more attention on blockchain pilots focused on the capture/exchange of T3 documents as a starting point- if nothing else to ensure there are some ‘quick wins’ realized.   This will eliminate the complexity of trying to capture everything on a blockchain (e.g. all events) and I think will also be a more approachable concept for the industry at-large to comprehend.

I’m interested/curious/excited to witness the next phase of blockchain in pharma.   The next 12 months represent a pivotal point in understanding how the technology will be deployed, how rapidly and who the main players will be.  My consistent message to the industry applies here as well-   maintain oversight of your serialization/traceability programs to ensure your solutions can adopt blockchain when the time is right while also recognizing it’s not the ‘easy button’ for serialization compliance and supply chain traceability.

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