Will Blockchain Technology Transform the MedTech Industry?
Medical technology is constantly evolving. In a few years, a sector that generated $364 billion in 2015 could be worth over $500 billion, supporting hundreds of thousands of jobs around the world.
Also known as Life Sciences 4.0, the medtech industry is looking at blockchain technology as a way of solving several critical challenges, creating new opportunities throughout the value chain. For some companies, blockchain is seen as a way of handling issues no other solution can.
In the last few years, M&A activity and R&D has been as much responsible for growth as top line revenue increases in the healthcare IT sector. With new innovations in the pipeline, we should expect that dynamic to continue for the next few years, according to an Ernst & Young report. In medtech, blockchain falls firmly into R&D activity for now, and we shouldn't expect it to make any noticeable revenue increases for companies in the near future.
Exploring real world uses for blockchain in medtech
Although blockchain is generally associated with cryptocurrencies such as Bitcoin, Ethereum, and the Initial Coin Offering (ICO) craze of 2016-17, it has other, more practical uses than a speculative asset class and funding vehicle.
Even the financial services sector, once skeptical of its claims that it would 'disrupt' global finances for ever, has found ways to start integrating the underlying technology to solve serious challenges for banks. Bitcoin has not disrupted global finances. It remains a fringe asset class, one that some fund managers slot into portfolios, but not something people should put money in they can't afford to lose.
However, the technology that makes cryptocurrencies possible has valuable uses across a range of sectors. One of those is medtech. Let's take a glimpse at the key intersections of blockchain and healthcare.
1. Supply chain traceability
And one such real world use case is supply chain traceability. Medical companies need to actively monitor supply chains to ensure continuity of necessary supplies. This is without a doubt a mission critical activity. Without continuity control, medicines that should arrive just in time could miss crucial delivery windows. People, patients, could die as a result of supply chain failures.
The shipping industry is using the same technology to improve the security and traceability of container shipments across the world. Blockchain can be applied the same way in medtech.
Manufacturers and buyers (hospitals, doctors, medical companies) can more easily verify - without the risk of tampering or falsification - the place of production, active substances, shipping dates, batch numbers, expiry dates, storage conditions and other vital details. Blockchain technology in healthcare could sit in the communication layer between systems, making them more secure and impossible to modify.
2. Improving compliance with EU regulations
Two sets of EU regulations are going to impact medical companies in the next few years. Articles 25 and 27 of the EU Medical Devices Regulation (MDR) and Article 22 of the EU In Vitro Medical Devices Regulation (IVDR) will come into force in 2020 and 2022, respectively. These regulations require every medical package includes a unique device identifier (UDI), visible and readable for humans and machines.
Machine readable data should be in the form of a QR or bar code, or use an RFID chip, with data flowing through a blockchain traceability layer to make the information more secure. According to Article 25 of the MDR and Article 22 of the IVDR, every 'economic operator' in the supply chain needs to be identifiable and traceable.
In practice, this means traceability of information about manufacturers, authorized representatives, importers, distributors, and any other supplier engaged with a product. This information needs to be trackable for up to 10 years after the last device has entered the market, or 15 years for implantables. Blockchain healthcare solutions would make this whole traceable supply chain easier to solve, track and verify, without worrying about data tampering or corruption.
3. Reducing counterfeit drugs
Counterfeit drugs represents a huge market that puts millions of lives at risk. With closer, more secure supply chain management, it will be harder for counterfeits to enter the market. Identifying fake and dangerous drugs will be easier, with blockchain-based traceability systems nearly impossible to fake or circumvent.
4. Improve clinical trial data
Data gathered from clinical trials is a crucial part of the drug R&D. Clinical trials are hugely expensive and yet, according to the COMPare Trials Project, only 9 out of 67 trials that were assessed had no mistakes. Over 700 trial outcomes contained problems. One of possible blockchain applications in healthcare is making it easier to record, verify, and much harder to fake or modify. Trial outcomes will improve, costs will reduce and it should take less time to get a new drug to market.
As with any emerging technology, blockchain will have dozens of use cases in the medtech and other sectors that we can't imagine yet. R&D doesn't always produce the results everyone expects, and yet it often produces results that come with numerous other benefits. Whatever the future holds, it is clear that if we integrate blockchain technology with medtech solutions, many critical challenges facing the sector are going to be solved.
The industry players are already turning their attention to this technology. According to BIS Research, blockchain in healthcare is projected to grow over $5.61 billion by 2025. It is also expected that 55% of healthcare applications will adopt blockchain technology for commercial deployment by 2025. So we are likely to see more promising healthcare blockchain startups and businesses in the next few years.