Use case - Pharmaceuticals &

Healthcare
 Drug Supply Chain Disaster: FoxMeyer
● In 1995, FoxMeyer Drugs was the 2nd largest wholesale pharmaceuticals distributor in
the United States with over $5 billion in revenue.

● Employed SAP R/3 software package and Pinnacle Warehouse Automation, to

increase efficiency.

● Poorly written software combined with lack of transparency led to complete disaster
with $34 million of inventory being lost.

● FoxMeyer filed for bankruptcy in 1996 and was sold to its main competitor McKesson
for a measly $80 million.

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 Need for Drug Traceability
● According to the WHO, every year close to $200 billion worth of counterfeit pharmaceutical products
are sold across the world.

● About 100,000 deaths a year are linked to the counterfeit drug trade in Africa alone.

● Counterfeiting occurs when a member of the supply chain siphons legitimate drugs and resells them
or enters counterfeit drugs into the supply chain as ‘authentic’ units.

● Counterfeiting can occur at any point in the manufacturing and distribution process and therefore
end-to-end visibility is required.

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 Traditional Drug Supply Chain
● Similar to other traditional supply chains, pharmaceutical supply chains also fragmented

● There’s limited visibility for the end user or retailer which prohibits better purchasing and
sourcing.

● Hospitals may unknowingly supply patients with counterfeit drugs as they have no way
to verify.

● End users have no way to verify the authenticity of the products.

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 Traditional Drug Supply Chain

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 Blockchain Drug Supply Chain

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 Blockchain in Drug Supply Chain
● The main stakeholders in the pharmaceutical supply chain are the drug producers, distributors,
hospitals, pharmacies and the consumers.

● Blockchains can provide a shared industry-wide logistics platform for all stakeholders.

● The platform would track drugs using blockchains from manufacturing to the end user.

● The platform would help with identification of counterfeit drug and if needed, organize recall.

● The stakeholder would be able to access the sourcing information, authenticate items and ensure
compliance

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