In February, the US Food & Drug Administration (FDA) unveiled a pilot program to test blockchain technology to counter counterfeit pharmaceuticals. The government agency is now expanding its program by onboarding IBM, Walmart, and Merck.

The FDA has chosen IBM, Merck, and Walmart to expand the government agency’s pilot program to fight counterfeit drugs. Together, the group will seek to develop blockchain-based means of verifying the supply and distribution of prescription drugs.

The FDA has been one of the most blockchain-friendly government agencies in the United States. Its pilot program announced in February has served as the inspiration for other agencies to follow suit, like the US National archives and Records Administration.

The new, expanded undertaking by the FDA has been approved under the US Drug Supply Chain Security Act (DSCSA). The main focus of this law in recent years has been to fight opioids. Recently, a warning letter was issued to drug distributor McKesson Corp for violations. However, the DSCSA is now being referenced to provide legal authority for a blockchain-based verification process.

FDA’s Blockchain Pilot Project Goals

The new project has a few goals. Firstly, it aims to reduce the time necessary to track and trace prescription drugs. Secondly, it will provide more reliable distribution information for buyers. Thirdly, information on the network will also store crucial information on the drugs themselves, such as the right temperature for their distribution.

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The FDA chose Walmart, IBM, and Merck each for different reasons. Walmart, for example, was chosen because of its strong supply-side logistics systems. IBM, on the other hand, has been at the forefront of blockchain innovation with its own IBM World Wire program, which is a blockchain-based network that allows for seamless cross-border payments. Merck is the final piece in the puzzle: it is one of the largest pharmaceutical companies in the world, and a prime case study on the technology’s effectiveness.

Altogether, if successful, we will likely see the use of distributed ledger systems be adopted by other US government agencies. This will undoubtedly open the door to legal clarification on the cryptocurrency space, which is today sorely lacking.

Do you believe the FDA’s blockchain pilot will be ultimately successful? Let us know your thoughts below.