Although pharmaceutical and medical device companies have expressed enthusiasm about blockchain, the healthcare sector has lagged behind others when it comes to adopting the technology. However, blockchain is set to gain more importance in the healthcare industry as it can play a pivotal role in a wide range of processes, according to GlobalData, a leading data and analytics company.

The company’s latest report, ‘Blockchain in Healthcare’, states that the key factors affecting the implementation of blockchain include high upfront costs, outmoded legacy systems, scalability, heavy industry imposed regulations, and privacy concerns.

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Blockchain technology will be a considerable game-changer for the healthcare ecosystem, as it will create new ways for healthcare stakeholders – pharma companies, physicians, payers and patients – to collaborate, as well as facilitate information exchange. By using the technology, synchronized information can be securely stored enabling effective interoperability between healthcare organizations, while at the same time ensuring that each party is sharing the same real-world data.

Urte Jakimaviciute, MSc, Senior Director of Healthcare Market Research, comments: “One major issue that healthcare providers are facing is sharing information without violating privacy regulations such as HIPAA and GDPR. Since blockchain can be used as an interoperability layer, it can help to link the data between disparate systems creating a transparent and secure path for patient data sharing. Blockchain-based systems can also give patients more control over their personal data, as the technology allows them to track who has access to their data and when.”

While blockchain is yet too fully take-off in healthcare, there are already quite a few successful country and industry level initiatives. For example, Estonia leveraged this technology to enable the use of digital health records and prescription database. The Food and Drug Administration (FDA) also teamed up with Merck, IBM, Walmart, and KPMG to conduct a pilot project aiming to explore the application of blockchain technology to improve pharmaceutical supply chain.

Jakimaviciute continues: “Pharma supply chain management has a lot of issues deriving from lack of modernization and a high number of intermediaries involved. Blockchain technology can potentially support the digitization of supply chains, overcome the middleman problem and increase transparency and efficiency.

“Companies, from manufacturers to retailers, can trace products through supply chains ensuring authenticity or flagging potential issues at any stage of the process. If a quality issue of the product is identified, blockchain can facilitate the recalls by determining the location of the faulty product within the supply chain.”

The ability to execute various transactions without a third party is regarded as the key benefit of blockchain technology. Organizations are able to manage their business without central authority involvement or control. However, this freedom comes with its own share of disadvantages such as integrity, limited storage and high development costs.

Jakimaviciute adds: “Blockchain technology is not flawless as it comes with high implementation costs, slow transactional performance, limited storage capabilities and is unable to act as an analytics platform. Nevertheless, the technology is an important tool for establishing an efficient, transparent and customer-focused healthcare business model based on higher degrees of accuracy and trust due to the fact that it is a tamper-proof public ledger.

“Whether hyped or not, blockchain offers higher security and transparency which is a top priority for the entire healthcare industry – from pharmaceutical companies to payers and hospitals.”