Strategic Alliance Magazine Q1 2018 - 27

BLOC KC HAIN SECURIT Y

Consider the benefits of a blockchain network in the
pharma industry between SAP, Merck, and Amerisource
Bergen, he continues. Merck had a costly business problem with pharmaceutical returns. If they got returned
from a hospital, basically they were thrown in the trash
because they didn't know where they were manufactured,
prescribed, and delivered, and why the doctor returned
them, he explains. There was no return path, no connection in between the points. What blockchain allowed
them to do was start tracking from the very beginning
the quantity, type, expiration date, location,
etc.; whether it went to a person, hospital,
doctor, or was not used at all. Blockchain
can also track temperature, how long the
drug is stored, what disease it was prescribed for, the name of the doctor-these
are all in blocks, and each is hashed (secured) by a very long crypto key. One
security benefit is if you try to modify the
data inside one of those blocks, such as trying to change the disease type, the
blockchain becomes invalid. This blockchain tracking will save Merck
approximately $3 billion a year, and the
company is calling it live inventory, he adds.
You can walk into many home bathrooms
and find bottles of pills that someone didn't
finish that eventually get thrown in the trash
or toilet. Or old and unused pharmaceuticals at police department collection areas. If that bottle was part of a
blockchain, there would be a permanent record of who
had it, how long it was on the shelf, and even the aspects of
disease associated with that geographical area. How many
could be found on New York's Long Island? Long asks as an
example. You have a way of doing disease prediction, control, and patterning. All can be a benefit to the chain ledger
and the supply chain, he concludes.
The companies that are going to make the largest leaps
with embracing digital transformation will take a blockchain approach, he predicts. Enterprise resource
planning systems need to talk with each other through
network security, data security, and policy security. It
gets complex with multiple layers, and it's slow. It can
have data corruption and system downtime. There can
be hacking, data stealing, and fraud. Blockchain takes
fraud out of the system. It's transparent and account-

able. If you start looking at security inhibitors for true
transformation, blockchain puts trust in the data level.
This is also true of smart contracts, which are digitalized,
trackable, irreversible transactions that bypass third parties. They are geared to digitally facilitate, verify, or
enforce contract negotiation or performance. Today, I
place an order, I get a purchase order, I send an invoice,
the payment is net 60 days, I go to my financials: all different levels of trust in those systems implemented in
those silos, he adds. Blockchain has that smart contract to

make renewable payment systems single-threaded, and
that secures the system.
One of the most interesting aspects of a blockchain is that
it is distributed and duplicated among the nodes in the system. This is similar to the technology behind the Internet
(TCP/IP) and routing tables for address resolution. When
a route went down, the systems found valid paths. When a
blockchain is modified or corrupt, it is taken out of circulation, leaving validation to the valid blockchain record. As
we move into a cloud-ubiquitous world, data replication is
the norm. The securing and control of that replication is
what enterprises will implement with private blockchains
where membership is invitation-only and logged. This is
the way enterprises can establish and manage trusted partners with the trust data inherent in the transmission. This
technology will probably be as pervasive as the Internet in
a short time to come because of exponential growth plus
having industry applications immediately, Long confidently asserts. n
Q1 * 2018 | STRATEGIC ALLIANCE MAGAZINE

Table of Contents for the Digital Edition of Strategic Alliance Magazine Q1 2018