Merck helps FDA test blockchain for track and trace

There has been a lot of talk about how blockchain computer technology can better protect the U.S. drug supply chain. Merck & Co. intends to test that theory.

The U.S. drugmaker has been invited by the FDA, along with Walmart, IBM and KPMG, to make up a pilot project team to see how blockchain might help drugmakers secure their supply chains and fulfill the requirements of the 2015 Drug Supply Chain Security Act. The act requires drugmakers and distributors to be able to identify, track and trace prescription medicines and vaccines throughout the U.S. supply chain.  

“Reliable and verifiable supply helps improve confidence among all the stakeholders we serve—especially patients—while also strengthening the foundation of our business,” Craig Kennedy, senior vice president for supply chain at Merck, said in a statement.

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Karim Bennis, Walmart’s VP of strategic planning and implementation for health and wellness, said the world’s largest retailer is already testing blockchain programs to track pork and leafy greens and thinks it is time to do the same with drugs. He said Walmart realizes customers expect it to do more to ensure their products are safe.

Walmart is among companies being sued for selling hypertension drugs that were recalled after the FDA determined they contained suspected carcinogens that were produced during production of the API.

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Blockchain technology allows data to be distributed along a network while permitting each participant to keep a ledger of the entire process and to reassemble the pieces as needed. The project is slated to be completed in the fourth quarter of this year and the results published in an FDA report. 

“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," IBM's Mark Treshock said. "Blockchain has the potential to transform how pharmaceutical data is controlled, managed, shared and acted upon throughout the lifetime history of a drug.”

The FDA’s idea is that each of the participants in the blockchain study brings different expertise to the program. Merck learned some lessons about the vulnerability of its supply chain when it was one of the companies hit by the June 27, 2017, NotPetya cyberattack that infiltrated Microsoft systems that had not installed a security patch.

The attack took out its API production and affected its formulation and packaging systems, as well as R&D and other operations. It took Merck about a year and cost it about $1 billion to restore its operations.