Blockchain: In consortia & corporates we trust?

blockchain, Blockchain, Business models, data, digital transformation, Distributed Ledger Technologie (DLT), Inspiring

Is Blockchain a hype or a (the next) big thing? Many discussions, meet-ups and events are filled with speakers and worksession on solving this question. Let me help you on this item and introduce a bigger question related to Distributed Ledger Technology (DLT).If you ask me Blockchain is both, hype and a technology that we can use to gain many benefits from it. That is what we have seen with previous technology developments and that is what we will see in the (near) future as well.

Curing the hype

If people do not understand the real potential of a technology there will be created a buzz of hype. This can be on several levels, for example on a conceptual phase where people think about what concept can we think about and how does this fit in our strategy? On the other hand this can be on a technical level where people do not have clear vision on to what extend a certain technology can help them improve. In this phase of Blockchain technology people are under- and overestimating of the potential of the DLT. What we need besides time is: common sense, research and experimentation which are most of the time the cure for this.

Bitcoin in, banks & governments out

The Guardian posted an article on their website Saturday the 10th of March 2018 titeled: “Does blockchain offer hype or hope?” In this article the stated the following:

“The blockchain was born as the digital scaffolding for cryptocurrency transactions. When devising bitcoin, pseudonymous inventor Satoshi Nakamoto’s aim was to create a stateless virtual currency, not controlled by any bank or government.”

If you ask me, it is good that there is the possibilities to connect with people on a P2P (Peer to Peer) basis to do transactions with. Over the past years we have ‘trusted’ parties with our money (banks), our insurance policies (insurance companies) our transactions (Notary) and other state related business (government on several levels). No or less involvement of these third parties can make lifes easier, more honest and realize more productivity. In special the last one of the most important benefits of what Blockchain technology could bring us. This movement can be increased in speed if these same parties facilitate this instead of (over)regulating it.

Trust transition: from the one institution to the other

But aren’t we forgetting one thing? Why are we so keen on getting away from banks, insurance companies and government institutions? The most commonly answer is: “I do not trust them” Fair enough. But do you trust technology? And more important the organizations who use this technology?

When we talk about corporate application of Blockchain they will mainly be in private and consortia Blockchains. Have you ever thought on who builds the chain, maintains it and is in charge of orchestrating the roles & rights in these environments. Based on what criteria these elements are provided by the authority of whom?

Blockchain is not the same as digital trust. Offcourse technology can enable and facilitate this partly. But if you do any form of business with an organization you also need to trust the Blockchain they (privatly) build or the consortia they are part of.

In whom we trust?

And this is exactly where I think we are missing a very big point. Stop shouting that you do not trust banks and governments. When using Blockchain related services you are also trusting parties that you most of the time do not trust. You are also trusting the way they give people and other parties rights and roles within the Blockchain ecosystem.  So before getting trustless towards the current instutions, be consious on who owns your trust in the future…

Image source: GCN

Blockchain Technology – A Cure for Pharmaceutical Counterfeit (2/2)

Big Data, blockchain, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Innovation, Inspiring, Leading Digital, technology, Trends, Trendwatching, Uncategorized

A few weeks back the first part of Marlou her article appeared on www.rickbouter.com. You can find the start of this article here: “Part I – Current status, Impact on the Industry

Part II – how/ practicalities

On the bright side, Blockchain is expected to totally transform the pharmaceutical industry far beyond compliance. In addition to eliminating counterfeit, reassuring patient safety, adhering to regulations, optimizing supply chain operations, and protecting revenue, Blockchain is expected to standardize and automate multiple procedures, making an intermediary party redundant.

The patient in the lead of the supply chain

The patient will be put at the lead of the supply chain, allowing a more direct patient-stakeholder interaction, and is thought to facilitate the trend of personalized medicine, by making real-time patient data accessible to pharmaceutical companies. Combined with optimal utilization of analytics, pharmaceutical companies can better meet the patient demand and more directly reach their target market. This not only eases entrance barriers of market penetration, but also provides the opportunity to restrict premium pricing. The ‘pay-for-efficacy’ principle allows the price of a pharmaceutical product to be set according to the – relative – efficacy of a pharmaceutical product. This shows similarity with the ‘no cure no pay’ principle, requiring pharmaceutical companies to even more deliberately invest in secure and stable R&D projects.

Long term vs. short term impact of Blockchain in pharma

The benefits of Blockchain for the pharmaceutical industry may not be directly reflected in their revenues, but for sure have a long term impact with the potential extension to the healthcare sector in providing healthcare of a higher quality and the ability to better shape healthcare according to specific patient needs.

Optimizing impact of Blockchain due to technological add-ons

The optimizing impact of Blockchain can be further utilized by technological add-ons such as smart contracts, sensors, artificial intelligence, and different applications of IoT. Cold-chain logistics is a concrete example of an extended concept of Blockchain, where the integration of sensors and IoT allow supply chain stakeholders to track and confirm the conditions to which the products were exposed. This strongly contributes to the ability to confirm product quality and enables the industry to specifically remove individual products in case of an error, rather than reclamation of entire batches. The bottom line of these improvements is a business case for the pharmaceutical industry, of cost reduction and increased profits, accordingly.

Blockchain: Tangible prove of potential business value

We can easily write a bookwork about the speculations of what Blockchain can and cannot do. However, what we need exactly is not found in speculations, but rather in tangible prove of potential and unlocking of the business value for the pharmaceutical industry. The industry needs to take big and concrete steps towards implementation if they want to benefit from Blockchain’s potential. A concept unknown is a concept unloved, and therefore a critical act is to increase awareness around Blockchain as a technology and break through Blockchain’s technological abstractness.

Penetrating the pharmaceutical ecosystem

Although the core concept of Blockchain has already, to a certain extent, penetrated the pharmaceutical ecosystem, the majority is still unaware of the far-reaching and innovative applicability of Blockchain in digitally transforming the pharmaceutical industry. There are several steps the industry is recommended to follow if they want to unlock the business value of Blockchain for the industry. Education is a primary aspect to address the often existing asymmetry in awareness, knowledge, and understanding of Blockchain as a technology and what it has to offer in terms of potential. Part of getting stakeholders aligned with each other is to get them on the same level of expertise and thus to provide them with the required information. In addition, stakeholder’s hesitative or negative attitude towards Blockchain is to some extent a result of their deviating or wrong perception of Blockchain’s potential and how it works, also in their advantage. A better understanding of the technology would help the industry to better grasp the concept and its application.

Stakeholders intrests at stake

To reach the stakeholders of interest and in the run-up to get them on board, a pharmaceutical consortium should be formed as a starting point. In order to create alignment across the industry, stakeholders will need to discuss their objectives, perspectives, and expectations regarding an implementation of Blockchain. A consortium creates solid ground to further build on a pharmaceutical Blockchain, step by step. Together, stakeholders can determine the pain points that deserve priority in exploring and testing and formulate a consensus as the basis of the Blockchain.

Formulating specific use cases in a fragmented industry

Generally, it is important to determine and formulate specific use cases beforehand. To prevent the industry to come up with a pain point merely to follow the Blockchain hype, there should be focused on the recognition and formulation of specific use cases in the pharmaceutical environment. Specification allows for focused testing of pilots and concepts, generating tailored outcomes rather than standardized parameters that need to be translated to a particular use case. For this to be successful, the operational processes of pharmaceutical companies need to be overseen and frameworked. Given the fragmented nature of pharmaceutical companies, let alone the industry as a whole, achieving adoption is a fairly complicated process.

Mobilizing the pharmaceutical chain

The pharmaceutical industry will need to better cooperate with each other, allowing for change in their processes and behaviors. However, this is not so much of a rational process as it might have been pretended to be. Proving business value and encouraging stakeholders to embrace Blockchain definitely are steps in the right direction, but do not provide a guarantee of the technology to succeed in the pharmaceutical ecosystem. Practically, the conventional, risk-averse nature of the pharmaceutical industry and their need for evolution over revolution may just be difficult to unify with the disruptive, revolutionizing character of Blockchain. This large gap between technology and business may strain industry-wide adoption, even though stakeholders are on board with the solution. Another aspect challenging the implementation of Blockchain, but is difficult to address, is the quality of the input and the data recorded onto the Blockchain. Despite the immutable nature of the technology, the quality of the Blockchain is only as good as the quality of the information that is entered. It will be extremely difficult to qualify the channel where the information enters the Blockchain, which impinges on the promised trustless character of Blockchain.

Conclusion: Blockchain: turning the inevitable into the desirable

All in all, the previously anticipated resistance coming from the pharmaceutical industry is better to be redefined as hesitation to get involved with what is uncertain and unknown. The pharmaceutical industry needs to put the blocks together and build a solid ground to embrace digitalization, which does not imply having to set aside their cautious, hesitative attitude nor their responsibility. A way to go is to invest in education, the formation of a pharmaceutical consortium, and additional testing in the act to unlock Blockchain’s business value for the pharmaceutical industry, to once and forever turn the inevitable into the desirable, and harvest the benefits. Nevertheless, the pharmaceutical industry should keep a critical eye on the anticipated challenges as well as on new emerging technologies that are on their way to overhaul the potential of Blockchain.

Biography

With a background in Pharmaceutical Sciences, Marlou is currently in the last stage of the Master’s program Science and Business Management, pursuing her passion of unlocking the synergy between life science and business. Her ambition is to improve and strengthen the collaborative relationship of life science and business development, through encouraging communication and cooperation between the different fields. After finalizing her graduate internship at Accenture Strategy, The Netherlands, focusing on the potential of Blockchain for the pharmaceutical supply chain, Marlou is starting a PhD in human psychopharmacology at Swinburne University, Melbourne, Australia, striving for the aspired career in the pharmaceutical industry.

Image credits: Image 1, Disruptordaily Image 2, UKRInvest Image 3, Statnews

Blockchain Technology – A Cure for Pharmaceutical Counterfeit (1/2)

Big Data, Bitcoin, blockchain, Blockchain, data, Distributed Ledger Technologie (DLT), Innovation, Inspiring, technology, Trends, Trendwatching

Part I – Current status, Impact on the Industry

The use of Blockchain for the pharmaceutical industry has been speculated and discussed by many different entities and stakeholders for quite some time already. Blockchain is thought to address the burning platforms pressuring the pharmaceutical industry, and to possibly optimize its supply chain operations.

The burning platform in the pharmaceutical industry

The one big burning question in this context is whether the pharmaceutical industry is ever going to embrace the long awaiting digital revolution, or if they are going to bundle their forces in the act to avoid the inevitable? Although pharmaceutical R&D is driven by innovation, this feature is not so much blended into their general activities and operational processes. Already being one of the most conventional and traditional industries, the organizational hierarchy and strong fragmentation of the pharmaceutical industry only further strains the ability of companies to embrace novel technologies, such as Blockchain. Responsibility of patient health and safety carried by the pharmaceutical industry makes stakeholders rather hesitant towards novel technologies and rules out the opportunity of a trial-and-error-like implementation approach of technologies.

Blockchain in pharma, fighting the falsified instead of diseases

Regardless of their ignorance, the pharmaceutical industry has already been confronted with multiple burning platforms. Counterfeit is a continuously increasing problem across the pharmaceutical supply chain, conveying major consequences for patient health and company performance. Counterfeit products either contain a too high or too low concentration of the active ingredient, reducing the clinically proven efficacy of the product. Apart from a deviating dosage, counterfeit products may contain excipients being different from those displayed on the package, which may affect the efficacy of the active ingredient or cause unpredicted side-effects to patients after administration. Although in most cases this may only cause modest discomfort for the patient, in other cases counterfeit products can cause severe adverse events and lead to hospitalization or even lethality in its extreme. It is therefore necessary to eliminate pharmaceutical counterfeit, the sooner the better. To facilitate the pharmaceutical fight of the falsified, governments have enacted serialization regulations, obligating the pharmaceutical industry to make each individual product traceable along the entire supply chain. This allows every stakeholder to, at any given point in the process, confirm the authenticity of the product.

Trust, the challenge & the opportunity 

Circulation of illegitimate pharmaceutical products does not only put patient health and safety at stake, but also has a damaging impact on the business operations of pharmaceutical companies. As long as counterfeit keeps on existing, pharmaceutical companies are not able to assure quality and safety of their products. This has an eroding effect on their reputation as perceived by the patient as well as by other influential stakeholders, such as physicians, specialists, pharmacies, and regulatory bodies.

The inability of pharmaceutical companies to deliver product quality and safety has a direct effect on their revenue.

A decline in trust has a diminishing effect on sales. Additionally, sales of counterfeit products take away the incremental revenue of pharmaceutical companies. Thus, apart from protecting patient safety and product quality, the pharmaceutical industry is in an overwhelming need to safeguard and protect its reputation and revenue.

Curing the pharma counterfeit

Counterfeit products are incredibly difficult to identify by the naked eye, making it complicated to reveal and eliminate these products by human efforts solely. A technological tool with the capacity to enable end-to-end traceability could cure this pain point. Technically, Blockchain has the capacity to completely revolutionize the pharmaceutical industry, its processes, but above all to address the burning platforms and cure counterfeit. Its immutable character makes mutual trust and the need for intermediary parties redundant, while safeguarding secure storage and exchange of sensitive information.

Practically, however, unaligned objectives of industry stakeholders, a lack of trust in the technology itself, and the absence of willingness and often the guts to further explore the opportunities of Blockchain stagnates the utilization of these capacities.

As clearly described in Enterprise Blockchain: Are We There Yet? by Sebastian Wurst (Accenture Strategy, Munich), the unique value and at the same time the challenge is in developing a Blockchain solution that perfectly fits an enterprise setting. The abstractness and technical complexity should be converted into a commercial concept, in order to fully unlock Blockchain’s business value for any industry, and the pharmaceutical industry here in specific.

Blockchain in pharma: No success until mass adoption?

Along the way of praising Blockchain’s potential, we should not forget to touch upon the expected – disruptive – impact of Blockchain on company business models. Given the comparatively low extent of industry digitalization, current business models of pharmaceutical companies do not inherently support the implementation of a highly complex and abstract technology as Blockchain. Although some believe that Blockchain-enabled business models are on the rise, others recognize the need for only small adjustments to be made by the industry to successfully integrate Blockchain in their processes.

The largest adjustment required is said to be targeted at the mindset and core values lived up to by industry stakeholders and employees.

Cooperation, interoperability, and transparency are not naturally fostered by the pharmaceutical industry, being in an almost direct opposition to the core concepts of Blockchain. Additional education on Blockchain would increase the understanding of the technology, and possibly mitigate the risk anticipated to come with implementation. Altogether, the pharmaceutical industry may expect to be confronted with many different challenges along the way to adoption, making the successfulness of Blockchain an uncertain parameter. To address these challenges, it will require strong incentives to encourage and solid recommendations to point the pharmaceutical industry in the right direction and unlock the synergy between business and technology.

Biography

With a background in Pharmaceutical Sciences, Marlou is currently in the last stage of the Master’s program Science and Business Management, pursuing her passion of unlocking the synergy between life science and business. Her ambition is to improve and strengthen the collaborative relationship of life science and business development, through encouraging communication and cooperation between the different fields. After finalizing her graduate internship at Accenture Strategy, The Netherlands, focusing on the potential of Blockchain for the pharmaceutical supply chain, Marlou is starting a PhD in human psychopharmacology at Swinburne University, Melbourne, Australia, striving for the aspired career in the pharmaceutical industry.

 Image sources

Image 1, Wharton: ‘Trying to Recapture the Magic’: The Strategy Behind the Pharma M&A Rush