What Could Blockchain Technologies Mean for the Medical Device Industry?
There has been a great deal of interest in identifying how blockchain technologies could reduce cost and improve efficiency across various industries. This is particularly true in the medical device industry, where blockchain and distributed ledger technology may be able to enhance trust, collaboration, traceability, and auditability across the industry’s value chain. Blockchain technologies offer the potential to transform critical medical device processes in development, commercial operations, and supply chain and product lifecycle documentation.
Documentation supporting medical device development is often a hybrid of paper and disparate electronic documents. For example, the Device Master Record (DMR) and Design History File (DHF) contain many different types of documents including requirements, design plan, detailed design plan, risk management, design verification, and design validation. As these documents move from paper to electronic record format, applying blockchain technology with built-in traceability and electronic signature functionality can help manage them securely.
Blockchain technologies could also help with one of the most problematic issues that faces product development—clinical trial data management. For example, clinical trial data can be accidentally altered, lost, or disregarded, potentially resulting in the publication of inaccurate results. Data management issues such as failure to report all measured outcomes, selective reporting, or data exclusion may also occur. Data could also be fabricated or manipulated by researchers engaged in fraud. Blockchain technologies could be used to access and transmit clinical trial data as it is collected, generating an immutable record of the transactions. This would benefit trial sponsors, researchers, and regulators by ensuring the trustworthiness of the clinical trial data or other trial documentation such as informed consent.
The business models of many medical device companies include the bundling of consumables associated with the use of the equipment. The sale of these consumables may include a sliding scale of price discounts based on volume, which can be difficult to track accurately. Consumables may also be subject to chargebacks or rebates based on specific agreements with Group Purchasing Organizations (GPO) or large healthcare providers. Blockchain technology could enable the use of smart contracts to help automate, clear, and settle these transactions between manufacturers, providers, distributors, or other intermediaries in the medical device value chain.
Supply Chain and Product Life Cycle
An obvious use for blockchain technology is in the track and trace of individual medical devices from the supply chain to the finished product manufacturer through distribution to the patient. Blockchain technology could create a secure, highly visible record of the chain of custody. In addition to tracking finished products, the genealogy of approved or critical parts in the Bill of Materials (BOM) of a medical device may also be tracked where each approved part would have its own tamperproof record from supplier to manufacturer. The decentralized nature of a blockchain record could ensure that no single company or entity controlled the information. This would allow stakeholders, ranging from regulators to end users, to access the information and trust in its accuracy.
Tracking the activities that mark a medical device’s product lifecycle could also benefit from blockchain technology. For example, secure and trusted record keeping is critical to the Device History Record’s (DHR) role in documenting the production history of a finished device. The many manufacturing, quality, and service records typically maintained in the DHR could be placed in a decentralized record not under the control of any specific company where it could not be altered after the fact without being detected.
In the case of a device failure or non-conformance, the blockchain record could help quickly and accurately determine whether there were manufacturing issues or whether the device had been tampered with during its journey to the patient. The technology could track devices after their use to ensure they were disposed of properly or to see whether they were improperly returned to service, such as re-exporting them to another country.
The complex healthcare ecosystem in which medical device manufacturers operate consists of a wide variety of stakeholders including payors, providers, governments, regulators, and patients. Each of these groups has different interests and points of view, which makes getting them to agree on common standards challenging. Given the nature of healthcare data, privacy is a major concern, and regulators have not yet worked out the implications of blockchain in the context of patient privacy and regulatory compliance. Although blockchain technologies can help guard against tampering and other cyber threats, there is not widespread agreement on claims regarding security.
The application of blockchain technology in the medical device industry is still in its early stages. The technological characteristics of blockchain seem to offer compelling use cases that might improve product development, commercial operations, supply chain, and product life cycle documentation. Undoubtedly, new use cases will arise as the practical capabilities of the technology become clearer through pilot implementations. Before blockchain technologies can be broadly deployed, however, issues regarding standards, governance, and compliance with privacy regulations must be addressed.
Dave Medina is the Vice President – Industry Verticals at QAD. He is responsible for QAD’s marketing and product strategy for QAD’s key industry markets including life sciences, automotive, consumer products, food and beverage, industrial, and high tech. He is also the leader of the Industry Vertical Services Practice responsible for the services strategy supporting these market segments. Prior to this, Dave was the Vice President – Life Sciences for QAD, responsible for QAD life sciences marketing and product strategy.
Prior to QAD he held positions at Hewlett-Packard as the Director - World Wide Life Sciences Industry Segment, responsible for HP’s enterprise sales and services strategy and solutions development for the life sciences industry, and later as Director – Product Management for Healthcare Analytics and Life Sciences. Before joining HP, he was the Director of Business Development and Marketing for Quintiles Consulting, a consulting division of Quintiles Transnational focused on GxP compliance and medical device development. Dave has held leadership positions in sales, marketing, and consulting in a number of software companies in medical management as well as the medical diagnostics industry.