The United States Food and Drug Administration announced Thursday that the department wants to use blockchain distributed ledger technology to track and trace the production and movement of drugs and vaccines in the U.S.

To do this, the FDA has joined forces with IBM Corp. Wal-Mart Stores Inc., Merck & Co. Inc. and KPMG LLP to help create a drug supply chain system based on blockchain technology. The pilot program is expected to be completed and put into beta testing by the end of the year.

This system is being launched under the Drug Supply Chain Security Act, a government program enacted by Congress in November 2013 that outlines a framework to build an electronic, interoperable system to track and trace certain prescription drugs in the U.S.

The creation of this blockchain project follows successful commercial supply chain tracking done by a consortium of retailers with the IBM Food Trust network, which includes Walmart. Using blockchain technology, IBM and numerous retailers have been working to tackle food-borne illness and contamination that leads to one in 10 people falling ill every year.

“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, Walmart’s vice president of Strategic Planning and Implementation, Health and Wellness. “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 U.S. Drug Supply Chain Security Act requirements will help us do just that.”

Blockchain technology works by distributing a ledger of real-time transactions and securing each with cryptography so that after data has been recorded it is extremely difficult to modify. As a result, every time something happens to a pharmaceutical, it can be securely recorded to the blockchain so that it can be tracked from its source, all the way through its lifecycle, until it is dispensed to a patient.

“Blockchain could provide an important new approach to further improving trust in the biopharmaceutical supply chain,” Mark Treshock, IBM Global Solutions leader for Blockchain in Healthcare and Life Sciences said. “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.”

The blockchain technology will establish a permanent and easily auditable record that may be integrated with already extant systems for tracking and tracing drugs. “Blockchain has the potential to transform how pharmaceutical data is controlled, managed, shared and acted upon throughout the lifetime history of a drug,” added Treshock.

The proposed pilot program will reduce the time it takes to track and trace inventory, allow the timely retrieval of information on the distribution of drugs, enhance the accuracy of information shared throughout the network and help determine the integrity of products in the supply chain. Product integrity could also include random lot testing for potency, tracking storage temperatures and other sensitive information.

All this could greatly reduce the potential of lost shipments, counterfeit drugs and contaminated products by allowing them to be detected mid-lifecycle and allowing the granular tracking of entire shipments for recall when bad products are discovered.

Further information on the FDA’s pilot blockchain drug program is available on the DSCSA Pilot Project Program website along with related laws, compliance, coordinating businesses and the expected underlying technologies.

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