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  • Mike J. Walker

Episode 20: Digitizing Pharmaceutical Supply Chains with Blockchain

Note: The audio quality is much better in the podcast for some reason.

In this episode I'm talking with Arun Ghosh from KPMG. He is the One-Americas Blockchain leader in the Innovation and Enterprise Solutions business. Listen in to hear us discuss how KPMG is leading the charge of providing solutions that combat COVID-19. He will talk about how blockchain enables a digital ecosystem established by “trust”protocols to make the pharma supply chain safe, secure, assessable, and resilient.

We will also talk about Arun’s blockchain journey, best practices he has established, and some cautionary tales as well.

🎧 Listen in Here

Some of the Key Challenges COVID-19 has on the Pharmaceutical Industry

In the episode we discuss the overall quality and access to healthcare increases and that there continues to be a dependency on fast and reliable medicine.

The people most affected by this are the elderly and people that have medical conditions. This is where having a reliable supply chain for pharmaceuticals is vital. As an example, in the United States close to half the population taking prescription medications for various medical conditions. This isn't just a US thing, but seen worldwide. People over the age of 60 is the largest cohort of the population. In Japan, the predictions say that 40% of their population will be over 60 by 2040. In America, it’s projected that this group will double from 52 million in 2018 to 95 million by 2060.

With these factors as a backdrop, the United States Food and Drug Administration (FDA) 

Has introduced and congress has signed into law the Drug Supply Chain Security Act (DSCSA). The FDA seemingly understands that even without this global pandemic we still have a growing elderly population that will rely on a stable, secure, and available supply chain.

DSCSA will allow pharmaceutical trading partners to collaborate on improving patient safety. The law outlines critical steps to build an electronic, interoperable system by November 27, 2023, where members of the pharmaceutical supply chain are required to verify, track and trace prescription drugs as they are distributed in the United States.

Getting to Know Arun

Arun discussed his focus over the past few months around the convergence of emerging technologies to provide real solutions to another global challenge, sustainability.

As an aside, I've talk about the convergence factor quite a bit over the years as well. Maybe this is why Arun and I get along so well. Wavelengths are synced. If you're interested check out the BlockTalk episode we did earlier this year on Blockchain 2020 Trends. You can find that here:

Have a set of responsible environmental, social and governance (ESG) practices are now a priority for every industry, from energy to technology to healthcare to retail and are proving to support both financial performance and resilience. Trends driving this focus include private/public sector alignment with scientific and academic communities on action needed, as well as the integration of environmental/ financial risks and the cost of carbon into capital markets and investment strategies. The pressure from capital markets has pushed global organizations to take urgent action to manage potential risks of trillions of dollars of stranded assets.  

Let's Not Forget About the Importance of Convergence with Regards to Pharma and DSCSA

With data starting at manufacturers and growing through each section of the supply chain, the amount of data gathered from compliance with DSCSA is immense. But, if used with machine learning, AI, and predictive analytics this data can help companies go from big data exhaust, to big data learning. It is all in how you utilize your back-end computations. For example, Microsoft helped a Children’s Hospital take weather and other data, combined with sentiment analysis from social media sites to accurately predict asthma outbreaks in the hospital region. The information gathered from all that data gave the hospital the knowledge to know when to reach out to their patients with awareness and effective home treatment campaigns. This care coordination helped lower incidences of their main reason for emergency room visits, treatment for asthma.

When we talk about kids it is so vitally important we know what we are giving them. Imagine being able to quickly tracking a recall down to the patient level. Get a notification via a wearable or device around you warning of a recall. This and many other opportunities are made possible by having the end-to-end pharmaceutical data unified on a digital ecosystem.

About the KPMG, IBM, Merck and Walmart Blockchain Project

For those not familiar, this project is an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the U.S. This will improve the FDA’s ability to help protect consumers from counterfeit, stolen, contaminated, or harmful drugs.

The pilot successfully connected a blockchain-based system from IBM with Merck’s existing industry-standard system for serialization. KPMG led the functional design of the pilot, including the process workflow, user interface development, defining configuration requirements for IBM’s blockchain platform and overall integration to demonstrate compliance with the DSCSA. Pilot participants were able to incorporate blockchain to determine product quality and origins of the product.

The pilot project was successfully delivered as of late 2019, and results are in the KPMG report. See here:

Watch the overview from Walmart

It's important to note that Walmart participated in two DSCSA pilots. They're a project lead along with IBM/KPMG/Merck as well as in the MediLedger DSCSA pilot. They are the only project which was publicly stated their involvement in multiple projects.

What’s Next for Pharma in the Wake of COVID-19

Arun and I discussed how all the great work they have done on the pilot can now be easily applied to todays global pandemic. The pilot provides a foundation to create an adaptive and dynamic system to manage the global supply chain that can rapidly address COVID-19.

In my opinion, COVID-19 will require an open, adaptive, and dynamic supply chain that can rapidly address the needs of specific populations to ensure treatment is available on short notice, in the right location and at the right time.

Arun's team at KPMG is really stepping it up with the thought leadership. They've introduced the Digital Trust Infrastructure (DTI) for Pharma. This is a blockchain based digital trust infrastructure that enables participants (patients, providers, suppliers and regulators) to analyze demand forecasts, locate physical goods and take corrective action to prevent shortages & optimize access.

Again, the KPMG folks are thinking about this in the right way. The key capabilities that are required for this next generation pharma ecosystem are:

  • Traceability. Track and trace (establish providence) a serialized product (medication) at the unit level or pallet from the point of commissioning to the point of dispense.

  • Instant Alerting. Quickly alert participants in the ecosystem that a problem has occurred like: fraudulent activity, variance in required temperature, damages, or a real of medicine.

  • Verifiable Authenticity. Complete verification requests to inquire about a drug’s validity to prevent counterfeit medication from entering the supply chain.

  • Transparency and Visibility. The ecosystem must support a view of all activity in the ecosystem such as: inventory available in market that could prevent shortage and plan supply/manufacturing.


Various organizations and government entities collaborate to ensure medications are safe, efficacious and are produced using the highest quality ingredients. This requires continuously evaluating and pursuing enhanced manufacturing, distribution, regulatory, and technological approaches to bring forward innovative solutions. Using iterative processes, the integrity of the supply chain can be improved by rapid identification and elimination of counterfeit medication, isolation of substandard ingredients and preventing product diversion and entry from gray markets.

Arun has some really great advise on recommendations on getting started

  1. Know thy business. Focus on the business outcomes that this will drive for your company and others.

  2. Find where blockchain capabilities align to strategically relevant business objectives.

  3. Blockchain “requires a village”. Involve roles like business decision makers, users, lawyers, architects, developers, economists, etc. Diversity of thought is the key.

  4. Problem first, technology second.

  5. The goal is to build an ecosystem of "trust", not the perfect technical architecture.

Arun Ghosh Bio

Arun is KPMG’s One-Americas Blockchain leader in the Innovation and Enterprise Solutions business. Arun’s journey into Blockchain was more coincidental than accidental as he discovered the nuances of this powerful technology beyond Cryptoassets and how it could shape global commercial networks. Prior to Blockchain Arun led and delivered a large variety of enterprise analytics and decision sciences work in life sciences, healthcare, semiconductors, manufacturing and other industries.

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