The Next Wave of Progress in the Life Sciences and Healthcare Sector
While the hype surrounding blockchain’s potential has traditionally been focused on financial services, there is currently a lot of excitement in the life sciences and healthcare sectors (LSHC) about the deployment of distributed ledger and blockchain technologies. These technologies promise to eliminate costly intermediaries and more effectively ensure security, immutability and transparency across the value chain, but it is still imperative to distinguish between the relatively easily achievable and the more speculative applications.
Blockchain and LSHC
Blockchain is a tamper-proof type of data structure that is used to create a digital ledger of transactions and share it among a distributed network of computers. Members validate transactions and authenticate the ledger without the need for a centralised authority, using public key encryption and consensus protocols. Thus, the intermediary’s role shifts to a peer-to-peer community and, at its core, blockchain offers a specific set of advantages: transparency, disintermediation, trust, and auditability. This technology has evolved from capturing cryptocurrency transactions, to a point where information on the blockchain could represent practically anything that can be translated in digital form – contracts, assets, records, transactions, identities and even patient data.
Given the complexity of modern healthcare systems, companies, healthcare authorities and governments are actively developing potential applications to automate a wide range of activities within the LSHC sectors. According to Deloitte report, the healthcare industry is planning the most aggressive deployments of blockchain, with 35% of health and life sciences respondents saying their company plans to deploy it within the next year. However, despite the current euphoria, we need to first decode this excitement surrounding blockchain technology in order to understand its realistic healthcare applications. By doing so, I believe that there are four blockchain-based healthcare use cases that stand out.
Rather than holding these in a central database, medical records could be operated on a decentralised blockchain, containing protocols governing how patient records could be accessed and by whom. This way, patients could receive full access to their own patient data, specify treatment preferences and emergency contacts or authorise access to their records to regulated healthcare providers, such as the NHS.
By eliminating the need for intermediaries blockchain-based systems could reduce administrative costs, eliminate the burden of data reconciliation and provide a realistic solution for minimizing medical billing-related frauds (in the US alone, Medicare fraud resulting from excessive billing or billing for non-performed services caused losses of around $30 million in 2016). But most fundamentally, blockchain could enable seamless access to historic and real-time patient data, through data exchange systems that are cryptographically secured and irrevocable.
Interestingly, the Estonian government began a nationwide implementation of a version of blockchain almost a decade ago, before bitcoin. Back in 2007, the Estonian eHealth Foundation announced a partnership with a data security start-up, called Guardtime, that would secure the healthcare records of over one million patients.
Intellectual Property and Clinical Trials
With the emergence of proof of existence platforms that offer a tamper-proof way of storing time-stamped, encrypted information, companies are able to verify the date on which intellectual property was created and thus, avoid duplication and patent fraud.
A major implication of these proof-of-work schemes is that they enable a broader awareness of new clinical trials and creates sampling pools of data which are more diverse, focused and accessible. So, innovators and clinicians applaud the decentralized ledger, as it increases trust and integrity in clinical research publications and allows for more efficient and cheaper ways to share peer-reviewed research, new treatments, drug discoveries or genome strains. These savings in time, cost and agility could make blockchain an ideal candidate for enabling a more fluid collaboration in clinical studies. Moreover, recording clinical trial results in real-time on an immutable blockchain will also eliminate the risk of researches subsequently manipulating the results or altering the focus of their study to fit the results. The results and reports are also more accessible and faster to approve by regulators.
Collection of Clinical Data
With medical device activity powered by the IoT (Internet of Things), increased popularity of wearable tech and the boom in personal genomics and ancestry services, the amount of data generated on a consumer’s health and lifestyle has dramatically increased.
The blockchain, coupled with other technological advances including, data analytics and increased sequencing power, will enable companies to securely collect ever more detailed medical data, that could then be analysed to identify patterns and signal potential health conditions or risks. At the same time, if pharmaceutical, biotech and research organisations gain access to this amount of data, ambitious industry goals, including precision medicine therapies and cures for rare diseases, have a better chance of materialising.
It is also worth noting that as the data deluge in life science grows, the storage of personal data has become a significant issue. Genomic data is the fastest growing dataset in the world, with a recent analysis concluding that it would take 7.3 zettabytes of data to store the genomes of the world’s population.
Supply Chain Integrity and Provenance
From manufacturers to distributors, wholesalers, pharmacies and finally to patients, the integrity of the drug supply chain is of paramount importance to any pharmaceutical manufacturer.
Based on global industry estimates, every year, pharmaceutical companies incur losses worth of $200 billion due to counterfeit drugs, despite improvements such as serialisation and e-pedigree (electronic document providing data about a particular drug batch). A blockchain-based system could ensure a chain of custody log, by assigning each individual drug or batch with a unique electronic serial number, with which they can be tracked through a series of transactions in the supply chain. Intermediaries will then be able to validate drug receipts and provide further details, such as the date received and shipped, number of days in storage, or temperature. Additional functionalities, such as private keys and smart contracts could also be built to provide proof of ownership of the drug source and manage the contracts between various parties. By having a real-time transcript of a drug’s movement, it will be much harder for counterfeit drugs to infiltrate in the supply chain, which is particularly beneficial in developing countries where an estimated 30% of drugs are counterfeits. Moreover, such a system may also facilitate identifying and recalling products that are subsequently discovered to have defects and it can provide regulators and end-users with evidence of compliance with applicable regulations.
Last year, Pistoia Alliance conducted a survey of 120 senior pharmaceutical and life science leaders, revealing that 68% of the respondents believed blockchain will have the greatest impact in this area of drug provenance and authenticity. iSolve LCC, for instance, is currently working with multiple pharma and biopharma companies to implement its Advanced Digital Ledger Technology (ADLT) blockchain solutions for managing and ensuring an auditable trail to safeguard drug supply chain integrity.
There are a few challenges as well
As many of the potential use cases of blockchain in the LSHC sectors relate to the recording, management and tracking of medical data, special attention must be given to data protection laws and healthcare-specific requirements. For example, because entries on a blockchain are immutable (cannot be subsequently amended or deleted), operating blockchain-based applications in the EU jurisdiction will be problematic once the General Data Protection Regulation (679/2016/EU) – giving individuals the rights to be forgotten, erase and correct data - comes into effect in May 2018. Another similar challenge relates to complying with the obligation to hold personal data no longer than it is necessary. This issue, however, may be dealt with by storing the personal data “off ledger”, where it can be deleted as required. This solution also allows the encryption applied to a blockchain today, to be updated as more sophisticated techniques are developed, ensuring therefore, that the information stored remains secure over time.
A major non-technical challenge faced by the industry is the disruption of cultural notions and mindsets associated with the adoption of decentralized ways of working. Blockchain technology is relatively new, its business advantages are unproven and implementation tools need to mature with the technology. Companies might actually be better off using plain relational database management systems for simple applications, rather than incurring the computational overhead of a blockchain-based solution. On the other hand, the same report by Deloitte found that some organisations are putting big money behind such projects, with 28% of respondents across the industry saying they have already invested $5 million or more, while 10% have invested at least $10 million.
A necessary step forward
Within the industry, blockchain is seen as an important catalyst for the next wave of progress and companies must prepare for changes across all dimensions, by building or acquiring the necessary operational and technical capabilities, effecting the cultural shifts in their organization and cultivating a collaborative ecosystem.
It is vital for companies to develop a well-informed view of their own business requirements and the relative strengths and limitations of each blockchain use case, before building frameworks and business strategies for identifying the right technology. Equally important for unlocking the true potential of blockchain across the value chain is to engage in collaborative relationships that could lower the barriers for innovation in life sciences R&D. In this early adoption phase, all stakeholders – life sciences organisations, manufacturers, service organisations, insurance providers and consumers – should collaborate on the creation of industry-wide data sharing standards that will improve security and encourage the exploration of impactful offerings that could not otherwise emerge.
Given that the LSHC sectors involve managing sensitive collections of medical data, it remains to be seen how regulators will address the conflicts between some of the inherent features of blockchain and the existing data protection laws. Meanwhile, the healthcare sector is expected to follow blockchain’s accelerating trajectory and continue innovating and investing in the technology.