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How to achieve efficient medical supply tracking through regulated blockchain

Posted by L3COS Jul 17, 2020

With adequate supplies of equipment and medications, medical professionals can provide the right healthcare for patients at the right time. However, even before patients get to see medical staff, they have to contend with a complicated, cumbersome and fraud-vulnerable supply chain.

While the COVID-19 pandemic is bringing these inefficiencies into focus, technological minds are working out how regulated blockchain could solve them.

Current problems in medical supply tracking

Since medical supplies have to go through various stages such as manufacturing and distribution, there are bound to be issues such as mishandling and theft. Considering the medical supplies market is expected to hit $132.6 billion this year, counterfeiters and thieves are attracted by the prospect of getting just a sliver of the market.

medical supply estimation

Due to paperwork issues including a lack of documentation for the source of raw materials, inaccurate transport logs or product catalogues and lack of access to product information, regulators and medical professionals often find it difficult to identify counterfeit products that make their way into the medical supply chain.

As a result, buyers can receive substandard products rather than the authentic products they ordered. According to the World Health Organization, 1 in 10 medical products in low- and middle-income countries are counterfeit.

This can be harmful to patients, leading to more health problems and result in losses for manufacturers.

bad medical products


BSI estimates that cargo theft amounts to over $1 billion annually, with the US and UK accounting for nearly half of the theft. Without proper tracking of supplies from the manufacturer to the buyer, it’s difficult to recover stolen cargo.

pharma cargo theft

Furthermore, conventional medical supply tracking can be expensive because of expenses such as communication and tracking software, inventory management, labour costs and more. Factor in the fact that different manufacturers have different software programs and protocols to track supplies, and this inefficiency increases still further.

And finally, each medical supplier has a central database of their supplies, meaning there’s a single point of failure in the database. If this database is compromised, it’s easy for anyone to access confidential medical supply data.

How regulated blockchain can address the challenges faced in medical supply tracking

Regulated blockchain can eliminate the issues that plague medical supply tracking.

To ensure transparency of medical supply information, all the relevant parties, such as manufacturers, delivery services, healthcare providers and supply buyers, are present on the regulated blockchain network. This way, every party can follow the supply process.

As transactions are clear to all the parties in the blockchain, the government can regulate medical supplies more effectively. Buyers can reduce the chances of receiving counterfeit products and manufacturers can reduce lost revenue through theft and counterfeiting.

The Drug Supply Chain Security Act (DSCSA) was created just for this purpose. As Tim Mackey, professor of Global Public Health at the University of California, San Diego, said in a discussion, DSCSA is meant to create an

“interoperable supply chain for pharmaceuticals, and that generally means that the medicine should be able to be tracked and traced all the way from its production to where it goes to be dispensed.”

Regulated blockchain can help make this possible by a multi-layer consensus mechanism where a group has to accept a transaction as valid before it’s entered into the blockchain.

Consequently, the relevant health regulatory agency is able to confirm that the product meets the quality requirements; the manufacturer can confirm the provenance of the product. As a result, the medical supply chain is regulated, secure and decentralised.

Once the product is authenticated for delivery, the relevant parties, such as the buyers, sellers and regulatory agencies, can monitor the real-time status of supplies on their way from manufacturers to buyers.

Another great feature of regulated blockchain is the smart contract. With smart contracts, buyers can trigger actions based on set conditions. This could be, for example, a trigger for a new supply order when a pharmacy’s stock level has reached a threshold. Smart contracts can also be used to access more information about a defective product during the recall process.

Benefits of regulated blockchain-based medical supply tracking

With regulated blockchain as the platform for medical supply tracking, there are benefits for all parties involved. Firstly, regulated blockchain ensures that hospitals and other healthcare establishments receive the right medical supplies to provide the best possible care for patients. It can reduce counterfeit products and manage quality too.

A regulated blockchain can also reduce the costs associated with monitoring medical supplies. As all parties can track shipments made on the blockchain, there’s little need to set up and spend money on other, less effective, communication tools.

Furthermore, regulated blockchain makes it easier to track medical products through their lifecycle. This also enables patients to track the history of a drug before they use it, ensuring that they’re receiving exactly what they paid for.

With blockchain, users can collaborate on a shared platform for medical supplies without revealing important information about themselves. Manufacturers are also able to verify that returned drugs are authentic before they’re sent back into circulation. This is vital, as 120 million products are returned annually.

Lastly, manufacturers and distributors can detect inefficiencies in the supply chain and eliminate them efficiently. In doing so, they can locate and remove counterfeit, expired or damaged products.


Medical supply tracking is vital to the operation of hospitals and other healthcare services. However, conventional medical supply tracking still faces problems such as theft, counterfeiting and poor documentation.

These are serious problems for hospitals, their patients, manufacturers and healthcare regulatory agencies. Regulated blockchain can eliminate these challenges and serve as an ideal platform for medical supply tracking.

Contact us at L3COS today to see our solutions to medical supply tracking problems.


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