16.05.2021

IBM, Merck Declare FDA-Backed Drug Tracing Blockchain a Success

In their final report to the FDA, the project’s sponsor, the partners called distributed ledger technology (DLT) a safety-enhancing answer to the U.S. Drug Supply Chain Security Act (DSCSA), which gives the pharmaceutical industry until 2024 to implement stringent new electronic tracing requirements on drug packaging.

IBM, Merck, Walmart and KPMG’s drug-tracing blockchain pilot has exceeded the benchmarks outlined by the U.S. Food and Drug Administration, the group announced Monday.

“With the use of a blockchain-enabled solution, this technology might be able to address the foundational requirement of track and trace for DSCSA in addition to establishing trust between trading partners”, the report said.

The trial began in June 2019 and the project was built on Hyperledger Fabric. At the time, a Walmart spokesperson said the company was hoping to build a more transparent supply chain for its customers.

“The pharma supply chain is really incredibly complex, given the number of entities and logistics providers and distributors,” said Tegan Keele, KPMG’s blockchain lead. All these players use different systems – oftentimes, these systems fail to meet DSCSA’s interoperability requirements. The consortium’s hypothesis was that blockchain could be their information bridge, she said.

Nearly a year after testing began, the consortium found its hypothesis correct. The partners said a permissioned blockchain network could bring that highly fragmented supply chain into DSCSA compliance. The system could track drug movements while also limiting the flow of private information and, most critically, work across partners that don’t otherwise interact.

Blockchain could also boost product safety by speeding the execution of crucial supply chain safeguards such as recalls, the group said. They estimated their blockchain could alert downstream partners of recalls in 10 seconds, an “exponentially expedited” improvement over the current pace of up to three days.

“To foster industry adoption, an egalitarian, inclusive, open-sourced commercial solution should be considered to help launch a blockchain network intended for information exchange of the pharmaceutical product transactions in the United States”, the group wrote in its report.

Twenty pilots in total are participating in the FDA’s DSCSA program, and many feature blockchain and DLT. The FDA is expected to release a comprehensive final report at the conclusion of all the trials.

IBM, Tata Become First Big Techs to Back Hedera Blockchain

IBM and Indian telecom company Tata Communications have joined the governance council of Hedera Hashgraph, a blockchain-like public network for enterprises.

Now, eight of the 39 available spots for governing council members are filled, the network announced Monday.

“Our goal is to create the most decentralized governing body of any of the major public platforms”, Mance Harmon, CEO of Hedera, told Coindesk. “We’re covering multiple industries … and we’re wanting global coverage.”

Hedera claims its flavor of distributed ledger technology (DLT), which works differently than blockchains, can facilitate micropayments and distributed file storage, support smart contracts and will eventually allow private networks to plug into the public one to take advantage of its transaction ordering mechanism.

After three rounds of funding done through simple agreements for future tokens (SAFTs), Hedera has raised $124 million.

IBM is the first major tech company and Tata is the first Indian company to join the network. Some of the network’s other governing members include Japanese financial holding company Nomura,  Deutsche Telekom and law firm DLA Piper. At this point in the network’s lifecycle, council members are invited by Hedera to join and given fee income for running nodes.

Public-private partnership

IBM said it is most interested in how the public network interacts with private networks.

“The most exciting part is the proposed Hedera Consensus Service”, said Bryan Gross, principal offering manager of the IBM Blockchain Platform.  “It has the potential to provide the core innovation of proof-of-work blockchains, like bitcoin and ethereum, without the performance and privacy trade-offs that are typically associated with these networks.”

Since the Hedera Hashgraph is designed to unify public and private networks, IBM will use it to build trust in custom Hyperledger Fabric networks. (Big Blue contributed the Fabric platform to Hyperledger, an umbrella project for enterprise blockchains.)

“Hedera Consensus Service makes it possible for Hyperledger projects out there to use the service to put transactions in order and eliminate the need for them to stand up nodes for transaction ordering, and they get the trust model of a public network”, Harmon said.

Tata Communications, part of the Indian conglomerate Tata Group, could not be immediately reached for comment but said in a press release that it plans to use distributed ledger technology to improve operational efficiency.

Checks and balances

The addition of the two major firms will further decentralize Hedera’s governance, said Harmon.

That governance includes a system of checks and balances that are supposed to prevent power from being consolidated at the network.

Members of the council have equal say in approving updates to Hedera’s codebase and in setting policies for the network’s nodes.

Council members can serve a maximum of two consecutive three-year terms if two-thirds of the council agrees to let them continue.

Hedera’s source code is open for review, but patented – an arrangement intended to prevent forks.

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