California-based startup using Blockchain to solve Supply Chain Management
Most people might not see opioid addiction and supply-chain management as related issues. But the connection has given the global pharmaceutical industry a serious problem. The startup company Chronicled is developing a blockchain-based solution, one that might help manufacturers that need to know the precise history of their goods.
In 2013, the opioid crisis spurred Congress to require drugmakers to come up with a way to track each shipment of drugs as it makes its way from manufacturer to customer, with a 2023 deadline. Similar rules have been put in place in Asia, South America and the European Union. But the patchwork of different computerized tracking systems that now manages drug supply chains is inadequate for the task.
Fortunately, supply-chain management is just the kind of problem that blockchain technology is well suited to solve. By tracking drugs on a blockchain, everyone involved in making and distributing them would have one record of all the transactions that take place as a drug travels from factory to container ship to truck and onto pharmacy shelves.
San Francisco–based Chronicled is working, along with pharmaceutical companies Genentech, Pfizer and Gilead Sciences, to develop such a system, called MediLedger. In it, each transaction in the supply chain will be authenticated via blockchain, and the provenance of each package will be verified. That will reduce the need for manual verifications, which can be slow and labor-intensive and also introduce errors in logging the progress of shipments. The new system could reduce drug costs while keeping counterfeit products from reaching consumers.
MediLedger is scheduled to launch commercially this year. The company’s founders are also looking beyond pharmaceuticals to work with organizations seeking to improve the supply chains for the minerals industry. That could lead to ways to identify the “blood diamonds” that originate in countries run by violent and corrupt regimes. Chronicled is also working on blockchain-based supply chains for the apparel industry and others.
To protect the privacy of transactions, Chronicled early on used a form of “zero-knowledge” cryptography, known as zk-SNARKS, that requires no exchange of information between a party that is seeking to verify a transaction and another party that is providing the proof of verification.
Chronicled was founded in 2014 by Chairman Ryan Orr, Chief Technology Officer Maurizio Greco and Chief Marketing Officer Samantha Radocchia and is now led by CEO Susanne Somerville. It recently raised $16 million from Mandra Capital and other venture capital companies and opened a development office in Vancouver, British Columbia.
→ Ashley Lannquist is a project lead for blockchain and distributed ledger technology at the World Economic Forum.