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Implications of Blockchain in Life Sciences and Healthcare

Implications of Blockchain in Life Sciences and Healthcare
December 08, 2017

Blockchain, a technology which facilitates tamper free movement and transfer of physical assets by putting all the transactions on a public digital ledger, will impact all facets of the LSH paradigm. The paper captures the top three implications of block chain in Payer, Provider and Pharmaceutical space and how those implications would help in overall accessibility of healthcare services by substantially lowering exuberant current cost of healthcare costs.

Transparent and Ethical Clinical Trials

Data security and tamper free data are key requirements for an effective clinical trial. For effective Clinical trial collecting and distributing meddle free data among various stake owners is the key ask. But data misconduct has not been uncommon making it difficult to arrive at a result which is economically fruitful for the Pharma giants. Many of these go undetected as these are not human errors but rather planned manipulation which defeat the standards and surveillance. John Carlisle, a consultant at Torbay Hospital reviewed 5067 trials, 90 of these trials had patterns implying fraudulent dataset.

With blockchain technology in healthcare we can aim to look at an era where the records can be uploaded and shared with utmost transparency and with zero chance of fraudulence.

There also have being the cases of forced/misinformed consent which has been taken from patients to meet the criterion. With advent of blockchain technology we can hope to achieve a transparent and incorruptible consent process leading to an ethical clinical trial.

Blockchain would increase accessibility of healthcare by reducing cost of healthcare. #blockchain in #Payer, #Provider & #Pharma industry

Eliminating counterfeit drugs and blurring prescription drugs

Benefits of blockchain include tracking drug footprint and location from inception to consumption, to ensure that the drug reaches the right patient. The entire supply chain can be put on the public ledger through blockchain to eliminate misconduct. With electronic health records (EHR) powered by blockchain, health records of customers/patients ordering the drug can be verified by the pharmacy thus eliminating the need for prescriptions.

A report by Centre of Disease Control has estimated that 30% of the drugs in developing countries are counterfeit2. With blockchain in life sciences tracking the drug right from inception we can ascertain how counterfeit drugs enter the supply chain.

Transparent Payer Terms and Transaction

With the 80/20 rule also known as Medical Loss Ratio, there is an immense pressure of cost on payers, many of whom have also exited the market given the mandate which requires them to limit the administrative and marketing cost to only 20 percent of the premium fee.

Given the volume of data it is a challenging task to verify the policy terms, collect proof from providers, process the claims, make payments, and sometimes provide clarification to stakeholders. Needless to say, this requires processes, skilled resources, and sometimes cost which cannot be limited to the 20 percent mandate.

EHR backed by blockchain technology and now claims terms and policy if placed on public ledger can help the payer and providers reduce immense effort and cost which they are spending on raising, processing, and verifying claims. Given the transparency and non-fraudulency of data, there will be no false claims and processing time would be reduced immensely due to the authenticity of the data.

Below visual captures the implications of block chain which would impact all stages of a drug from the clinical trial to supply chain to consumption followed by the claims and transactions.

Blockchain Blockchain Blockchain

Blockchain technology is the much needed breather for the pharmaceutical industry which was battling with costs, counterfeit drugs, unethical practices, and high cost claim processing. Blockchain has the potential to impact and address these challenges ensuring the industry is more patient-centric, transparent, and ethical.


  2. Center for Disease Control: Counterfeit Drugs. (2014). Retrieved September 29, 2016, from counterfeitdrugs/