New Study: Blockchain Would Save Pharmaceutical Industry $180 Million Every Year in Labor Costs Alone

A blockchain-powered mobile app tested by real caregivers delivering life-saving medications at UCLA Health demonstrated how distributed ledger technology could unlock annual savings in the billions.

LOS ANGELES, CA – March 2, 2020 – UCLA Health and LedgerDomain today announced key findings from a new study revealing that blockchain would save the US pharmaceutical industry over $180 million each year, along with reducing counterfeits and hidden costs worth billions of dollars. The study features a blockchain-based mobile app, BRUINchain, which was used by real caregivers delivering critical life-saving medications at one of the busiest hospitals in the United States.

The study, which has been submitted to a peer-reviewed journal, was launched as part of the FDA’s DSCSA Pilot Project Program, part of a broader effort to develop an electronic, interoperable system to track prescription drugs throughout the United States by 2023. BRUINchain is designed to not only track and trace drugs as they move through a pharmacy, but also to verify the legitimacy of the drug with the manufacturer before being administered. By leveraging blockchain technology, BRUINchain makes it possible for multiple parties to track and verify drugs while preserving data integrity and security.

“Blockchain has a reputation for being complicated, but BRUINchain made it simple and easy to scan a package and track its progress in real time,” said Dr. William Chien, lead author and pharmacy purchasing manager at UCLA Health.

Under the Drug Supply Chain Security Act, starting in 2023 pharmacists in the United States will be required to verify prescription drugs before they are dispensed. Unless verification can be achieved in near real-time, dispensers will need to scan packages twice. The study found that with distributed ledger technology such as blockchain, only a single scan might be required, saving the US pharmaceutical industry $180 million each year in labor costs alone. Blockchain would also reduce the need for pharmacies to hoard safety stock, resulting in $3.5 billion per year in savings.

BRUINchain was built on Hyperledger Fabric, enterprise-grade, open source distributed ledger hosted by Hyperledger, a project of the Linux Foundation. “We applaud LedgerDomain and UCLA Health for taking on the challenge of improving safety and cutting costs in the delivery of pharmaceutical drugs,” said Brian Behlendorf, Executive Director, Hyperledger. “This study shows that enterprise blockchain can be the foundation for addressing this critical issue and others in the healthcare industry. Solid data that documents the impact of platforms like Hyperledger Fabric is key to driving wider adoption and development of enterprise blockchain technologies across markets as well.”

About LedgerDomain

LedgerDomain is a blockchain platform developer founded in 2016 to bring blockchain solutions to enterprise ecosystems, unlocking a world of communal computing and real-time performance. LedgerDomain is a member of Hyperledger, the Linux Foundation, and the Clinical Supply Blockchain Working Group. In 2019, LedgerDomain and UCLA Health were selected as participants in the DSCSA Pilot Project Program to explore and evaluate methods to enhance the safety and security of the drug supply chain. Learn more at ledgerdomain.com and bruinchain.com.