Making Sense of Blockchain: How Firms Can Chart a Strategic Path Forward ^Top How GlaxoSmithKline (GSK) Is Creating a Blockchain-based Model to Manage Product Line Supply Chains To detect illegitimate drug products and ensure patient safety, the U.S. Drug Supply Chain Security Act (DSCSA) has mandated that pharmaceutical companies track and trace drugs at the retail-unit level by 2023. The act requires a detailed digital record of who has handled the product and where, starting from the manufacturer all the way to the local pharmacist. This is a difficult task for large firms such as GSK, which have complex processes and wide distribution networks. GSK scientists looking for tracking solutions took cues from Walmart’s success in tracking pork products from China using blockchain. The technology’s immutability and time efficiency attracted them, so they set out in search of a blockchain-based solution to establish drug provenance irrefutably and meet their regulatory requirements. First, GSK identified a non-critical use case that would be safe to experiment with: tracking cell lines for cell engineering. Cell lines are cultures that scientists use to edit and study biological processes (genome editing). Some activities in GSK’s cell engineering value chain were inefficient. Specifically, multiple license verifications made stock management and request fulfillment at its BioRepository laborious and time-consuming. When a GSK scientist requested certain cell lines for experiments, the BioRepository needed time to verify the scientist’s license and access rights. It then had to verify stock availability before approving. Since it worked separately from the procurement team for stocking cell lines, replenishment time and demand time often got mismatched, resulting in delays. To initiate the pilot, GSK’s scientists had to work around certain hurdles. The first was to obtain approvals from the leadership team, for which they had to construct a sound business case. By citing Walmart’s success, and after much deliberation on the estimated dollar efficiency gains, they managed to persuade the leadership to run a pilot. Next, to alleviate data security concerns, they voted to build a private internal blockchain. To minimize operational disruptions for the rest of the firm, they involved only a limited number of stakeholders. Finally, they negotiated and brought the BioRepository team, procurement team, external vendors, and a sample team of scientists on board. While their business case was clear, the scientists did not have a working knowledge of blockchain. To fill this skill gap, they looked outside the firm for experts and hired Viant, an Ethereum-based blockchain platform. Viant built a pilot solution around GSK’s existing computing infrastructure instead of upgrading it in order to limit capital expenditure. Under the pilot solution, pre-written smart contracts verify a scientist’s license and validate permission instantly when he or she requests a cell line. The application simultaneously verifies data on stock availability at the BioRe- pository, triggers delivery to the scientist, and alerts the vendor when replacement and replenishment of cell lines is required. Payments happen automatically since both the vendor and its bank are on the blockchain. GSK can provide regulators with access if needed. As an added benefit, the cryptographical nature of the application allows stakeholders to access only the portions of the supply chain relevant to their business. For instance, a vendor can be granted access to just the freezer unit while other aspects of the cell engineering process remain inaccessible. GSK’s pilot has yielded a holistic cell line tracking system that enables cost and time efficiencies as well as secure data sharing. By replicating this program to drug products with a larger volume of stakeholders, GSK would be able to fulfill the DSCSA’s tracing mandate. Furthermore, since license ownership can be easily traced, GSK can share its experimental research with its scientists all over the world without risking misuse of information. Following improvements in the healthcare data ecosystem, GSK is planning to extend this experiment to enable secure data exchange among researchers, patients, and clinical research centers. It plans to continue monitoring market adoption for blockchain and envisions solutions for managing pharmacogenomic data for clinical studies, patient enrollment, trial monitoring, managing consent, and more. 