Have you ever noticed the print behind your routine drugs which has a warning of the sort – “Store in a cold and dark place with temperature below 20 degree celsius”. Do you ensure it happens? I am sure most of you do. 

Did everyone who carried the packet before you picked it from the Pharmacy properly store it?

Had it been stale or unsuitably stored food you would have simply tasted it and observed the difference, you may have asked for a refund or exchange from the general store or in rare circumstances went for a legal suit. Unfortunately, in the case of a medicine you can’t taste and tell about its quality. Even if you consume it and it takes on your health , there is no way you can be sure if it was because of the stale drug.

Despite me intimidating you, you will still take that drug maybe because you trust the brand. Probably you are willing to pay as high as 10 times the actual price of that drug elsewhere if a brand can ensure your safety. But what if it is a falsified copy of your favorite brand?

The reality is that no matter how reliable a brand is: from manufacturer to retailer there could be at least 6 different parties (manufacturer, packer, mover, chain of distributors, wholesaler, retailer) who carried your product before it reached you. So is it the right time to change our idea of trust?

The World Health Organization (WHO) estimates that there are over 1 million deaths annually from counterfeit and substandard drugs, causing $21 billion global financial impacts1. Another statistic from WHO says that an estimated 1 in 10 medical products circulating in low- and middle-income countries is either substandard or falsified2.

This is exactly what a blockchain is trying to resolve everywhere. A trust issue, and the healthcare supply chain is just one of the hundreds of applications of blockchain.

How does it work?

The answer is in three steps.

  1. By tracking and timestamping information using non-human intervention (eg. Electronic records, medical devices, sensors). In the case of Supply chain of drugs, a sensor can track if the drugs are stored in proper temperature and air pressure throughout the supply chain. They can also detect human touch points. Electronic records can maintain the manufacture and expiry date records of the medicine. In case of health data records (clinical trials, genomics, cardiovascular, ECG, electronic surgical equipment etc) information is directly captured by medical devices.
  2. By encrypting and storing the tracked information in a decentralized database.
  3. By defining a smart contract which defines the participation rights of the players. In case of a drug supply chain right from manufacturer to the customer all are players in the blockchain setup

Understanding technically, there is nothing new in step number one and is not directly related to blockchain but it forms the premise of it. However, step two is different as here the encrypted information is stored in a decentralized database which gives blockchain an edge over traditional cyber/data security measures as here there is no single custodian of the data, and information cannot be altered unless all the parties involved in the contract mutually agree to take action on it. This highly reduces the chance of theft, data breach, internal data leakage or privacy violation.

Hence, blockchain in healthcare promises to solve a grave issue of health data security breach as according to an IBM report, in 2021, for the 11th consecutive year, health care organizations experienced the highest average cost of a data breach by industry ($9.23 million, a 29% increase over 2020).3

The third step is the most challenging of all, which is smart contracting. Every player holds its own copy of data which is safely locked and all the data copies are connected through encrypted keys. If one of the players tries to alter the information in his copy of data the smart contract tallies it with other player data copies and doesn’t let that alteration happen. The smart contract can also define the exposure of information to different parties involved. Eg. a customer can see when the drug was manufactured or if there was a breach in minimum storage temperature, similarly if the customer returns the medicine to the retailer, the retailer can see the purchase bill date within the blockchain data record itself. Creating smart contracts is challenging because it requires discipline and adherence to a new culture of information procurement on part of players to ensure trust. Basically, every step and every individual has to commit to do activity within the ambit of the blockchain , eg. the retailer must use an electronic billing system connected to blockchain to ensure participation and so is true for other players to enable an unhindered record of information.

This is why despite being the most promising technology of the future, blockchain is evolving at its own pace because society takes time to adapt to a technology, but eventually it will take up everything given the capability this technology has.

Following are some of the areas within healthcare where this technology has started to revolutionize things 4,5

  • Pharmaceutical Supply Chain Management
  • Healthcare data management (Medical devices, Electronic Health Records, sensors, Individual Health IDs, Insurance ID Cards, Patient Record Management etc.)
  • Healthcare Metaverse platforms
  • Data procurement in Observational studies
  • Organ Transplantation
  • Maintaining Surgical Operations logbook
  • Appointment and capacity management with hospitals and physicians
  • Medical billing systems
  • Health insurance claims optimization
  • Protecting telehealth systems
  • Healthcare data audit
  • Improvement in clinical trials

When managed on blockchain even highly sensitive health related data can be reliably shared for research which was not possible before. Hence making way for further advancement in health research, health analytics and health economics. It is just the beginning of things and blockchain applications have unlimited scope.

If you think there is any specific domain within healthcare which I missed mentioning here that can have potential blockchain solutions, you can mention it in the comments section below.

Author – Kunal Hriday



1. World Health Organization, “Substandard and Falsified Medical Products”,https://www.who.int/news-room/fact-sheets/detail/substandard-and-falsified-medical-products, (January 31, 2018)
2. https://www.who.int/news/item/28-11-2017-1-in-10-medical-products-in-developing-countries-is-substandard-or-falsified
3. https://www.ibm.com/in-en/security/data-breach
4. Yaqoob, I., Salah, K., Jayaraman, R. et al. Blockchain for healthcare data management: opportunities, challenges, and future recommendations. Neural Comput & Applic (2021). DOI: 10.1007/s00521-020-05519-w
5. Carrano, F.M., Sileri, P., Batt, S. et al. Blockchain in surgery: are we ready for the digital revolution?. Updates Surg 74, 3–6 (2022). DOI: 0.1007/s13304-021-01232-y