How Blockchain Technology Could Transform The Pharmaceuticals Industry Part 3

Billing, recalls, and smart contracts

Blockchain technology could not only help verify the authenticity of the supplies, but it could also help move cargo efficiently with a blockchain-based supply chain that has checkpoints along the route of cargo adding the data to the blockchain.

 

Monitoring compliance and recalls with blockchain

Unfortunately, no product is perfect and sometimes products get recalled.

In certain industries running a recall is fairly easy. For example, in the automotive industry, the cars get from the manufacturers to the dealerships. Then, the dealerships sell the cars and have the data about all the cars and all the buyers. Cars don’t typically exchange hands often so that even when a person sells a car, it is possible to track the location of the car and the address of the person fairly easily using just the vehicle’s identification number and contacting the departments of motor vehicles.

With an industry like a pharmaceuticals industry, with a large number of interconnected nodes that include hospitals, offices of individual doctors, pharmacies and more, notifying all the parties about a recall can be very hard. If a blockchain were to contain information about the location of drugs for a certain company, then locating the drug would be much easier than it is today when different medical service providers and pharma companies have disjointed IT systems that do not talk to each other.

 

Running billing systems and adjudicating claims using smart contracts with blockchain

One of the biggest breakthroughs of the blockchain technology implemented first on a large scale by the Ethereum network was the creation of smart contracts.

A smart contract is similar to a regular contract. It describes what parties are agreeing to and outlines the conditions of a deal. The difference between a smart contract and a regular contract is that enforcement of a regular contract requires the third party. For example, when a person gets a driver’s license, he or she gets a privilege to drive a car in exchange for agreeing to follow the driving laws of the state and the country. The problem here is that enforcement of the laws is mostly manual and requires police and cameras to monitor the situation on the roads. With blockchain and smart contracts, it is the network that monitors the conditions of the contract, thus removing the need to use third parties to monitor and enforce contracts. For example, a smart contract on a pharmaceutical blockchain network could specify that a certain medication needs to be stored at temperatures of 35F and 50F. At certain checkpoints, devices from transportation companies would submit the data about the temperatures to the smart contract. If the temperature is too high or too low, the contract may deem the shipment as damaged an initiate an insurance claim. All of this could be done on auto-pilot, quickly, securely, and efficiently, eliminating the need for third parties and a lot of expenses that come with this need.

 

All of the same principles could also apply to the storage and protection of patient data, including the data about patients taking prescription drugs. Patients could also be wearing smartwatches and other devices that would monitor their conditions and send the data to doctors as defined by smart contracts.

Smart contracts could also play a significant role in the billing process. Currently, billing in the medical industry is a very complex process because of all the parties that are involved with it. A person has a health problem and goes to a doctor. The person pays a co-pay and submits a bill to the insurance company. If the person buys drugs prescribed by the doctor, he or she needs to submit another bill to the insurance company. If there’s a hospital visit, there may be bills from different departments in the hospital and bills for different services, from patient care to using equipment. The biggest problem here is that most of these systems and devices do not communicate with each other effectively. In many cases, people have to prepare bills, which leads to mistakes and discrepancies. Many of the processes in the healthcare field could be automated with data stored in one place and being available to all involved parties. The interconnection of various devices that can communicate with each other without humans is known as the Internet of Things.

Security is one of the reasons why the Internet of Things in the medical industry has not been growing faster than it has been. According to Protenus Breach Barometer, data breaches in the medical industry in 2016 have affected over 25 million people. Out of 450 breaches that have occurred in 2016, 27% happened because of cyberattacks. Blockchain-based solutions can add an extra level of security and protect businesses, non-profits, manufacturers of the devices, suppliers and vendors from both hacking and accidental data loss and damage.