News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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FDA, IBM, Merck, Walmart and KPMG Collaborate on Blockchain Pilot Project to Track Pharmaceuticals

First used to track cryptocurrencies such as Bitcoin, blockchain is finding its way into tracking and quality control systems in healthcare, including clinical laboratories and big pharma

Four companies were selected by the US Food and Drug Administration (FDA) to participate in a pilot program that will utilize blockchain technology to create a real-time monitoring network for pharmaceutical products. The companies selected by the FDA include: IBM (NYSE:IBM), Merck (NYSE:MRK), Walmart (NYSE:WMT), and KPMG, an international accounting firm. Each company will bring its own distinct expertise to the venture. 

This important project to utilize blockchain technologies in the pharmaceutical distribution chain is another example of prominent healthcare organizations looking to benefit from blockchain technology.

Clinical laboratories and health insurers also are collaborating on blockchain projects. A recent intelligence briefing from The Dark Report, the sister publication of Dark Daily, describes collaborations between multiple health insurers and Quest Diagnostics to improve their provider directories using blockchain. (See, “Four Insurers, Quest Developing Blockchain,” July 1, 2019.)

Improving Traceability and Security in Healthcare

Blockchain continues to intrigue federal officials, health network administrators, and health information technology (HIT) developers looking for ways to accurately and efficiently track inventory, improve information access and retrieval, and increase the accuracy of collected and stored patient data.

In the FDA’s February press release announcing the pilot program, Scott Gottlieb, MD, who resigned as the FDA’s Commissioner in April, stated, “We’re invested in exploring new ways to improve traceability, in some cases using the same technologies that can enhance drug supply chain security, like the use of blockchain.”

Congress created this latest program, which is part of the federal US Drug Supply Chain Security Act (DSCSA) enacted in 2013, to identify and track certain prescription medications as they are disseminated nationwide. However, once fully tested, similar blockchain systems could be employed in all aspects of healthcare, including clinical laboratories, where critical supplies, fragile specimens, timing, and quality control are all present.

The FDA hopes the electronic framework being tested during the pilot will help protect consumers from counterfeit, stolen, contaminated, or harmful drugs, as well as:

  • reduce the time needed to track and trace product inventory;
  • enable timely retrieval of accurate distribution information;
  • increase the accuracy of data shared among the network members; and
  • help maintain the integrity of products in the distribution chain, including ensuring products are stored at the correct temperature. 
In the FDA’s February announcement, Scott Gottlieb, MD (above), the FDA Commissioner at that time, said, “For the drug track-and-trace system, our goals are to fully secure electronic product tracing, which provides a step-by-step account of where a drug product has been located and who has handled it, [and] establish a more robust product verification to ensure that a drug product is legitimate and unaltered.” It’s not hard to imagine how such a tracking system would be equally beneficial in clinical laboratories and hospital pathology departments. (Photo copyright: FDA.)

Companies in the FDA’s Blockchain Pilot

IBM, a leading blockchain provider, will serve as the technology partner on the project. The tech giant has implemented and provided blockchain applications to clients for years. Its cloud-based platform provides customers with end-to-end capabilities that enable them to develop, maintain, and secure their networks. 

“Blockchain could provide an important new approach to further improving trust in the biopharmaceutical supply chain,” said Mark Treshock, Global Blockchain Solutions Leader for Healthcare and Life Sciences at IBM, in a news release. “We believe this is an ideal use for the technology because it can not only provide an audit trail that tracks drugs within the supply chain; it can track who has shared data and with whom, without revealing the data itself. Blockchain has the potential to transform how pharmaceutical data is controlled, managed, shared and acted upon throughout the lifetime history of a drug.”

Merck, known as MSD outside of the US and Canada, is a global pharmaceutical company that researches and develops medications and vaccines for both human and animal diseases. Merck delivers health solutions to customers in more than 140 countries across the globe. 

“Our supply chain strategy, planning and logistics are built around the customers and patients we serve,” said Craig Kennedy, Senior Vice President, Global Supply Chain Management at Merck, in the IBM news release. “Reliable and verifiable supply helps improve confidence among all the stakeholders—especially patients—while also strengthening the foundation of our business.”

Kennedy added that transparency is one of Merck’s primary goals in participating in this blockchain project. “If you evaluate today’s pharmaceutical supply chain system in the US, it’s really a series of handoffs that are opaque to each other and owned by an individual party,” he said, adding, “There is no transparency that provides end-to-end capabilities. This hampers the ability for tracking and tracing within the supply chain.”

Walmart, the world’s largest company by revenue, will be distributing drugs through their pharmacies and care clinics for the project. Walmart has successfully experimented using blockchain technology with other products. It hopes this new collaboration will benefit their customers, as well.

“With successful blockchain pilots in pork, mangoes, and leafy greens that provide enhanced traceability, we are looking forward to the same success and transparency in the biopharmaceutical supply chain,” said Karim Bennis, Vice President of Strategic Planning of Health and Wellness at Walmart, in the IBM news release. “We believe we have to go further than offering great products that help our customers live better at everyday low prices. Our customers also need to know they can trust us to help ensure products are safe. This pilot, and US Drug Supply Chain Security Act requirements, will help us do just that.”

KPMG, a multi-national professional services network based in the Netherlands, will be providing knowledge regarding compliance issues to the venture. 

“Blockchain’s innate ability within a private, permissioned network to provide an ‘immutable record’ makes it a logical tool to deploy to help address DSCSA compliance requirements,” said Arun Ghosh, US Blockchain Leader at KPMG, in the IBM news release. “The ability to leverage existing cloud infrastructure is making enterprise blockchain increasingly affordable and adaptable, helping drug manufacturers, distributors, and dispensers meet their patient safety and supply chain integrity goals.”

The FDA’s blockchain project is scheduled to be completed in the fourth quarter of 2019, with the end results being published in a DSCSA report. The participating organizations will evaluate the need for and plan any future steps at that time.

Blockchain is a new and relatively untested technology within the healthcare industry. However, projects like those supported by the FDA may bring this technology to the forefront for healthcare organizations, including clinical laboratories and pathology groups. Once proven, blockchain technology could have significant benefits for patient data accuracy and security. 

—JP Schlingman

Related Information:

IBM, Walmart, Merck in Blockchain Collaboration with FDA

Pilot Project Program Under the Drug Supply Chain Security Act; Program Announcement

IBM, KPMG, Merck and Walmart to Collaborate as Part of FDA’s Program to Evaluate the Use of Blockchain to Protect Pharmaceutical Product Integrity

IBM, KPMG, Merck, Walmart Team Up for Drug Supply Chain Blockchain Pilot

Merck and Walmart Will Track Prescription Drugs on IBM Blockchain in FDA Pilot

The Dark Report: Four Insurers, Quest Developing Blockchain

International Pilot Program Tests Whether People Would Be Willing to Exchange Clinical Laboratory Test Results and Photos of Their Bodies for Cryptocurrency

Developers believe participants will be interested in controlling how their private health data is provided to medical laboratories, drug companies, research organizations, and the federal government, while also earning an income

Bitcoins for blood tests, anyone? A new venture is examining the idea of exchanging cryptocurrency, a digital asset, for the results of weekly clinical laboratory tests and photographs of body parts from healthcare consumers. If successful, in a couple of years, people might be able to earn a “basic income” from selling their private health data to pharmaceutical companies, medical laboratories, research organizations, the federal government, and more.

Insilico Medicine, a Baltimore developer of artificial intelligence (AI) solutions for research and pharmaceutical companies, and the Bitfury Group, a blockchain technology company based in Amsterdam, Holland, are working together on the project they call Longenesis, a blockchain-based platform that uses AI to collect, store, manage, and trade data, such as medical records and health data.

Marketing Human Life Data

The two participants presented their novel idea this past November in Taipei, Taiwan, at the TaiwanChain Blockchain Summit. They published their report in Oncotarget, an open-access biomedical journal that covers oncology research. The authors of the paper believe blockchain and AI technologies could support patients and physicians in working with medical data.

“There are many companies engaged in the marketplaces of human life data with billions of dollars in turnover. However, the advances in AI and blockchain allow returning the control of this data back to the individual and make this data useful in the many new ways,” Alex Zhavoronkov, PhD, founder of Insilico Medicine, told Cryptovest.

“I would love to live in a world where I’m motivated to regularly take all kinds of medical tests for free, I get the data back, and I will be able to sell this data to the marketplace, and I earn all kinds of goods and services—primarily health related,” Zhavoronkov told Motherboard.


Alexander Zhavoronkov, PhD, Founder and CEO of Insilico Medicine, told Motherboard, “Right now, it’s difficult to predict. But I think that if [users] submit blood tests, pictures, transcriptomes let’s say on a weekly basis, you probably will be able to earn a good universal basic income.” Zhavoronkov is describing a new business model involving clinical laboratory testing. (Photo copyright: Insilico Medicine.)

Exchanging Human Biomarkers for Digital Coin

Combining blockchain and AI technologies is one of the many emerging technological advances emerging to enhance the medical and pharmaceutical industries.

“Recent advances in machine intelligence turned almost every data into health data. The many data types can now be combined in the new ways: one data type can be inferred from another data type and systems learning to optimize the lifestyle for the desired health trajectory can now be developed using the very basic and abundant data,” noted Polina Mamoshina, research scientist at Pharma AI, a division of Insilico Medicine, during the company’s presentation at TaiwanChain. “Pollen, weather, and other data about the environment can now be combined with the human biomarkers to uncover and minimize the allergic response among the myriad of examples. People should be able to take control over this data.”

Because pharmaceutical companies rely on data mining to obtain individual demographic information and medical records, the growth potential for this type of product is huge.

Clinical Laboratory Test Results Earn LifePound Tokens

Longenesis is still being tested, but Zhavoronkov hopes it will be ready for the public within the next two years. The plan is to utilize blockchain technology to collect and store patient medical data in exchange for their cryptocurrency, known as LifePound.

According to the Longenesis website, “Longenesis is a marketplace, which uses personal health data, transformed into a LifePound token. LifePound is used inside a marketplace as a monetary system, powered by Exonum blockchain technology to keep data secure and transparent. Tokens are distributed between Longenesis marketplace members and are used for transactions between the following elements:

  • Developers;
  • Users;
  • Data providers;
  • Customers; and the,
  • Stock cryptocurrency market.

The developers believe the “Longenesis Data Marketplace will be able to provide new insights in the fields of healthcare research and development. It will provide analysis and recommendations to pharmaceutical companies to help develop new drugs.”

It’s too early to predict whether Longenesis will be successful and catch on with the public. However, the popularity of cryptocurrency, and the opportunity to earn an income from one’s clinical laboratory data, could encourage individuals to participate in this type of endeavor.

In addition, this is a highly unusual and unexpected approach to encourage consumers to undergo regular medical laboratory testing in order to earn payment by a digital currency. It is a reminder of how rapid advances in a myriad of technologies are going to make it possible for entrepreneurs to create new business models that involve clinical laboratory tests and the data produced by such tests.

—JP Schlingman

Related Information:

This Biotech Company Wants You to Give It Selfies and Blood Tests in Exchange for Cryptocurrency

A Decentralized Medical Record Marketplace Powered by Human Data

Blockchain, AI Could Spur Biomedical Research, Insilico Medicine Says

Converging Blockchain and Next-generation Artificial Intelligence Technologies to Decentralize and Accelerate Biomedical Research and Healthcare

Blockchain, Explained

Blockchain Technology Could Impact How Clinical Laboratories and Pathology Groups Exchange Lab Test Data

Insurers might use blockchain technology to enable instantaneous verification and interoperability of healthcare records, which could impact clinical laboratory payment systems

Medical laboratories and anatomic pathology groups are keenly aware that connected, secure, interoperable health records are critical to smooth, efficient workflows. However, the current often dysfunctional state of health information technology (HIT) in America’s healthcare system often disrupts the security and functionality of information exchange between hospital and ancillary practice patient record systems.

One solution to this could be blockchain technology. With its big data and abundant touchpoints (typically: insurer, laboratory, physician, hospital, and home care), the healthcare industry could be ripe for blockchain information exchanges. Blockchain might enable secure and trusted linkage of payer, provider, and patient data. But what exactly is blockchain technology and how might it impact your laboratory?

Blockchains Could Transform Healthcare

Blockchain refers to a decentralized and distributed ledger that enables the interface of computer servers for the purpose of making, tracking, and storing linked transactions.

“At its core, blockchain is a distributed system recording and storing transaction records. More specifically, blockchain is a shared, immutable record of peer-to-peer transactions built from linked transaction blocks and stored in a digital ledger,” explained risk-management group Deloitte in a report, which goes on to state:

  • “Blockchain technology has the potential to transform healthcare, placing the patient at the center of the healthcare ecosystem and increasing the security, privacy, and interoperability of health data. This technology could provide a new model for health information exchanges (HIE) by making electronic medical records more efficient, disintermediated, and secure.
  • “Blockchain relies on established cryptographic techniques to allow each participant in a network to interact (e.g., store, exchange, and view information), without pre-existing trust between the parties.
  • “In a blockchain system, there is no central authority; instead, transaction records are stored and distributed across all network participants. Interactions with the blockchain become known to all participants and require verification by the network before information is added, enabling trustless collaboration between network participants while recording an immutable audit trail of all interactions.”

Key principles of blockchain (above) demonstrate the decentralization of the healthcare data. In some ways, this resembles electronic health record (EHR) systems that feature federated databases, rather than centralized databases. (Image copyright: Deloitte.)

Instant Verifications and Authorizations at Point-of-Care

In a Healthcare Finance News (HFN) article, insurers acknowledged blockchain’s potential for information verification and authorizations in real-time, fast payments, and access to patient databases that could fulfill population health goals.

“Everybody that is part of a transaction has access to the network. There’s no need for an intermediary. Blockchain allows for verification instantly,” noted Chris Kay, JD, Senior Vice President and Chief Innovation Officer at Humana, in the HFN article.

At clinical laboratories, blockchain could enable nearly instantaneous verification of a patient’s health insurance at time of service. Blockchain also could enable doctors to review a patient’s medical laboratory test results in real-time, even when multiple labs are involved in a person’s care.

“Everyone has to have a node on the blockchain and have a server linked to the blockchain. The servers are the ones talking to one another,” explained Kay. “What’s really transformative about this is it takes the friction out of the system. If I see a doctor, the doctor knows what insurance I have because it’s on the network. All this is verified through underlying security software.”

Healthcare Obstacles to Overcome

Breaking down data silos and loosening proprietary holds on information can help healthcare providers prepare for blockchain. However, in our highly regulated industry, blockchain is at least five years away, according to blockchain experts in a Healthcare IT News (HIT News) article.

“We’re hearing that blockchain is going to revolutionize the way we interact with and store data. But it’s not going to happen tomorrow. Let’s find smaller problems we can solve as a starting point—projects that don’t have the regulatory hurdles—and then take baby steps that don’t require breaking down all the walls,” advised Joe Guagliardo, JD, Intellectual Property/Technology Attorney and Chair of the Blockchain Technology Group at Pepper Hamilton, a Philadelphia-based law firm, in the HIT News article.

Healthcoin: Rewarding Patients for Improved Biomarkers

One company has already started to work with blockchain in healthcare. Healthcoin is a blockchain-based platform aimed at prevention of diabetes, heart disease, and obesity. The idea is for employers, insurers, and others to use Healthcoin (now in pre-launch) to reward people based on biomarker improvements shown in medical laboratory tests.

Healthcoin’s Chief Executive Officer Diego Espinosa and Chief Operating Officer Nick Gogerty, founded the company in 2016 after Espinosa, who had been diagnosed with diabetes, made diet changes to reverse it, according to an article in Bitcoin Magazine.

“When I saw my blood labs, the idea for Healthcoin was born—shifting the focus of prevention to ‘moving the needle’ on biomarkers, as opposed to just measuring steps,” Espinosa told Bitcoin Magazine.

Blockchain Provides Security

What does blockchain provide that isn’t available through other existing technologies?  According to Deloitte, it’s security and trust.

“Today’s health records are typically stored within a single provider system. With blockchain, providers could either select which information to upload to a shared blockchain when a patient event occurs, or continuously upload to the blockchain,” Deloitte notes. “Blockchain’s security and ability to establish trust between entities are the reasons why it can help solve the interoperability problem better than today’s existing technologies.”

Should Clinical Laboratories Prepare for Blockchain?

It’s important to note that insurers are contemplating blockchain and making relevant plans and strategies. Dark Daily believes the potential exists for blockchain technology to both disrupt existing business relationships, including those requiring access to patient test data, and to create new opportunities to leverage patient test data in real-time that could generate new revenue sources for labs. Thus, to ensure smooth payments, medical laboratory managers and pathology group stakeholders should explore blockchain’s value to their practices.

—Donna Marie Pocius


Related Information:

Blockchain Opportunities for Health Care: A New Model for Health Information Exchanges

Blockchain Will Link Payer, Provider, Patient Data Like Never Before

Old Ways of Thinking Won’t Work for Blockchain, Experts Say

Blockchain-Styled Solutions for Healthcare on the Rise

Can Blockchain Give Healthcare Payers Better Analytical Insight?

Blockchain in Health and Life Insurance: Turning a Buzzword into a Breakthrough

Does Blockchain Have a Place in Healthcare?