DHL and Accenture to fight fake pharmaceuticals with blockchain

Andrew Munro

Posted: 14 March 2018 4:13 pm News

It's increasingly clear that blockchain technology in logistics can save lives, as well as dollars.

It's estimated that as many as 30% of pharmaceutical products sold in emerging markets are counterfeit, and Interpol believes that up to 1 million lives are lost each year as a result. DHL and Accenture have partnered to bring those numbers down to zero through a blockchain solution.

They aim to do this with an indelible tamper-proof blockchain system that tracks medications from the factory, through all intermediaries and right to the patient's hands.

"Using a common, indelible and secure ledger, the industry can achieve much higher safety standards – from the factory to the patient – at much lower cost. This is one of several opportunities blockchain affords to restructure business processes while reducing cost and complexity," said Andreas Baier, Accenture team leader.

"We see especially exciting potential for blockchain in pharmaceuticals, which is why we focused our proof of concept with Accenture on the life sciences and healthcare industry,” says Keith Turner of DHL. "By utilizing the inherent irrefutability within blockchain technologies, we can make great strides in highlighting tampering, reducing the risk of counterfeits and actually saving lives."

Lab tests show that their new prototype blockchain, hosted on nodes in six geographies, is scalable up to 1,500 transactions per second, and able to handle more than 7 billion unique serial numbers.

"DHL and Accenture’s pharmaceutical prototype is just one of the use cases highlighted in their trend report. Blockchain could also be used for asset management, to improve transparency and traceability, and to automate commercial processes with “smart contracts,” which facilitate and verify the performance of contracts without third parties," says the DHL press release.

The benefits of blockchain technology in logistics are very apparent, and many big names are quickly embracing the idea of the block supply chain. By now there probably isn't a prominent logistics company in the world that hasn't taken big steps in that direction.

• Maersk, the world's largest global shipping company partnered with IBM to move global shipping onto a blockchain system, describing the technology as "the future of global trade."
• FedEx is one of the founding members of the Blockchain In Transport Alliance (BiTA), and is currently working on setting up and formalising industry standards to "transform the logistics industry."

At the same time cryptocurrency startups have also recognised the inevitability of blockchain technology in logistics and shipping, and will probably end up competing with IBM, Accenture and others for clients in this fertile area.

• VeChain was created specifically to handle supply chain management and the counterfeiting of consumer goods in a way similar to this current DHL-Accenture partnership, and has since expanded its capabilities into financial services and smart contracts, picking up a series of high profile partnerships along the way.
• Waltonchain has similar aims, and sets itself apart by integrating the system with its own RFID trackers and offering subchains.

And beyond the blockchain, related logistics industry developments like micro-fulfillment might bring a revolution of their own.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, SALT, BTC, XRB

Picture: Shutterstock