The project, which reflects our company’s focus on digital innovation, is part of an FDA program that explores emerging approaches for the tracing and verification of prescription products.

Merck has teamed up with IBM, Walmart, and KPMG to conduct a pilot project that aims to explore the application of blockchain technology to the U.S. pharmaceutical supply chain.

The project was selected recently by the Food and Drug Administration (FDA) as part of an initiative to implement the U.S. Drug Supply Chain Security Act. The DSCSA, signed into law in 2013, aims to preserve the integrity of prescription medicines and vaccines by requiring manufacturers to track and trace all transactions involved in transporting medications from factory to patient.

Our participation in this pilot project and the FDA program demonstrates our commitment to digital experimentation and our openness to collaborating across fields, with other companies and with regulators.

Blockchain provides a record of transactions, much like documentation that accompanies a shipment. It holds that record in an electronic form that is accessible to all of the participants in the chain; the transactions cannot be tampered with or reversed, allowing for greater transparency and security.

block chain
Blockchain's potential for data transparency

This would permit, for example, a product within the U.S. to be traced from the purchaser back to a particular batch at the manufacturing facility in seconds.

“Blockchain provides an increased level of surety for all parties,” says Craig Kennedy, senior vice president, supply chain and originator of the pilot project. “We’re confident we’ll be successful in the pilot and show FDA that the approach has value to patients and regulators in terms of compliance.”

Merck will build on successful work done by IBM and Walmart in developing the retailer’s system for tracking fresh produce and meat. That platform, known as Food Trust, is in use by more than 50 companies globally. Walmart has found that the system cuts down tracking from more than a week to a few seconds, in some instances.

“With successful blockchain pilots in pork, mangoes and leafy greens, we are looking forward to the same success and transparency in the biopharmaceutical supply chain,” said Karim Bennis, Walmart’s vice president of strategic planning and implementation, Health and Wellness.

What’s next for blockchain? While patient impact isn’t the top focus of the pilot project, in the future, consumers may be able to look up a prescription they’ve received to ensure that it is authentic and was properly handled en route to the pharmacy, and companies may be able to automate complicated transactions such as calculating rebates.

The pilot program is expected to be completed in late 2019.