Covid-19 Vaccine Distribution Woes: Blockchain to the Rescue?

Hi,

This is Ayaan Shah from Nextrope’s Insights. In today’s newsletter, I took a look at blockchain technology's drastic effect on the Big Pharma industry, especially during the pandemic. More specifically, we will explore how this technology can be used to distribute the COVID-19 vaccine and what steps are currently being taken. Will blockchain be the key to global vaccine distribution?

Today we’ll discuss:

  ❗️   Why are the legacy vaccine supply chains inadequate?

🔺  How can blockchain technology be utilized to distribute vaccines?

📈  What steps are currently being undertaken to implement a blockchain solution?

❓   What are the concerns regarding a blockchain-based supply chain?

If you have any questions, please don’t hesitate to ask as I am happy to answer them. Also, if you are working on any fintech or blockchain projects and would like to be featured in our newsletter, please reach out to me - a.shah@nextrope.com

Not financial advice

We have done our best to ensure that the information provided in the Newsletter and the resources available for download are accurate. However, the information contained in this Newsletter and the resources available for download are not intended as, and shall not be understood or construed as, financial advice.

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“Blockchain could be the key to vaccine distribution,” said an IBM representative, Mark Treshbock, in a recent interview.

Over the last few weeks, multiple pharma companies released promising trial data from their COVID-19 vaccines, suggesting that this could be the light at the end of this very long, dark tunnel. While the vaccines are yet to be released, the conversations revolving around the distribution are prudent. Blockchain has emerged as a potential ally.

Blockchain’s utility skyrocketed following the pandemic, as it was used to help control the flow of information regarding the donations, medicine supply chain, and the spread of the pandemic. Countries such as the United Arab Emirates went as far as using digital channels powered by blockchain for most government services, including marriage licenses, land registry, health worker credential checks, etc.

Blockchain advocates argue that if there was a pre-existing blockchain system connecting the World Health Organization, the national health ministries, and the relevant hospitals, we could have substantially reduced the impact of the COVID-19 virus by restricting travel, implementing social distancing, and applying strict quarantining policies much earlier.

Vaccine Supply Chain Management

Bill Gates wrote in an article regarding the worldwide response to Covid-19 that,” World-wide vaccine distribution is not only the right thing to do but also the right strategy for short-circuiting transmission”. While this may sound good on paper, eradicating COVID-19 globally would require distributing between 7 to 19 billion vaccine doses, depending on the number of shots required per vaccine. The vaccine supply chain involves not only manufacturing the vaccine, but also the storage, packaging, cold-chain transit, domestic and global shipping, and distribution strategies. Even with the optimistic assumption of a 20-30% loss during transit and storage (caused primarily by storage temperature requirements averaging -40°C), at least 10 billion doses in the supply chain would be required.

Source: India Today

No past immunization programs come close to this scale. The closest comparison I found was the polio immunizations in India for 175 million children, which took more than a decade (1995-2011). The process also requires an oversight over the entire supply chain due to the proliferation of counterfeit drugs, particularly in developing nations. The WHO has estimated that one in every ten medical products are substandard or falsified in low- and middle- income countries, which would likely result in loss of life. Developed countries face their own struggles, with pharmaceutical theft at an all-time high. U.K Health agencies have estimated that nearly $1 billion worth of pharmaceutical cargo was stolen in 2019, with the U.K and the U.S accounting for half of it.

Governments have realized that the supply chain of COVID vaccines can only be built on an openly verifiable, consensus-driven system, with immutable integrity of data and not a single source of control - the blockchain.

The broad steps in the vaccine distribution channel are described in the infographic below.

Source: Nextrope Insights; Icons source: flaticon.com

Nextrope recently developed a blockchain solution to help a shipping company manage its freight tracking. The objective was to provide their buyers, sellers, and government officials with a mechanism to track goods shipped around the world. Traditionally, products traveling across borders required approvals from up to 30 parties before arrival, creating a large amount of paperwork and opening up opportunities for fraud at multiple points in the process—leading to millions of dollars in maritime fraud each year. Nextrope helped develop ‘Smart Contracts’ on the Ethereum Blockchain to allow visibility on all transactions throughout the chain for all relevant parties. This change helped streamline the entire approvals process and reduced the time taken from an average of 8 days to 2 days. Similar use cases illustrate that blockchain has the potential to reduce administrative and logistics timelines in shipping by more than 85 percent.

Furthermore, this will not be Big Pharma’s first tryst with blockchain. MediLeger Network is a consortium of pharma leaders including Gilead, Pfizer, Amgen, Genentech, McKesson among others, and have already created a blockchain solution to verify the authenticity of drugs. It is currently working on expanding its product to trace where a specific box of drugs is and where it has been at any given time.

A UNICEF startup, StaTwig, has already built and tested a vaccine supply management platform that ensures complete visibility of all vaccines at international, national, and local levels. The platform uses QR codes to track the vaccines from the manufacturer to the end-consumer on an open-source blockchain platform. At each touchpoint in the supply chain, the platform records information such as the quantity, temperature record, timestamps, chain of custody, and price against the unique QRcode. This is done for all the ancillary supplies such as diluents, syringes, needles, glass vials, rubber stoppers, plungers, wicks, and kerosene for refrigerators.

While the platform focuses on the pharmaceutical industry, its underlying protocol can be repurposed and customized to advance any supply chain — from the personal protective equipment that has been in such short supply to products in any industry. As we learn that our health and economic welfare are interconnected with those thousands of miles away, it becomes clearer that we need to leverage our global resources to effectively fight large-scale problems.

Concerns

Pharma companies are predicted to face the following challenges while implementing a blockchain solution for distributing vaccines, which are exacerbated by the short timeline due to the pressing need for vaccines.

Collaboration - The blockchain-based supply chain network will break down if any essential stakeholder refuses or is unable to get involved. Contamination in any step could have adverse effects and the benefits of implementing a blockchain solution will be lost. Therefore, there is a need to align all the players and is the biggest challenge that is currently faced in the implementation of this solution.

Overhauling legacy systems - Radiofrequency identification (RFID), 2D barcode, and near field communication (NFC) are used today to link to physical products. However, to ensure the seamless flow of information, all products at every step of the supply chain will have to be tagged digitally, requiring an overhaul in today’s supply chain practices

Re-skilling - Implementing a blockchain supply network would require training the workers on the new tools and systems. While companies such as StaTwig have tried to flatten the learning curve, the new procedure will require training. Such large-scale training would also add costs to the already razor-thin margins.

Privacy - While solutions exist, including private blockchains and strong encryption protocols, there are still cybersecurity breach concerns that need to be addressed before the general public will entrust sensitive data to a blockchain solution.

Conclusion

COVID-19 will most certainly not be our last global health crisis. In light of these challenges, blockchain technology could not only increase our agility, but also aid in day-to-day operations. While the current conversations on the topic mainly revolve around vaccines, the underlying protocol can be repurposed and customized to advance any supply chain — from the personal protective equipment that has been in such short supply to products in any industry.

We have the right tools; we just need to deploy them the right way.