United States: Blockchain: A Tool With A Future In Healthcare

Blockchain technology originated in 1991, and was conceived as a secure way to timestamp digital documents akin to how a notary timestamps physical documents. The true value lies in the fact that once stamped, the document cannot be backdated. Since then, the application of Blockchain technology has evolved and has the potential to transform and improve healthcare.

This article examines three possible areas for blockchain application in healthcare—the drug and device supply chain, medical staff credentialing, and electronic health records (EHRs).

What is a Blockchain?

Blockchain is an open distributed ledger, meaning that anyone provided with the requisite credentials can access and add to the ledger. When data is added to the blockchain, it is done chronologically. Each block contains the relevant encrypted data, which is referred to as a hash, and the hash of a previous block. The kind of data contained within a block depends on the type of blockchain being utilized.

For example, a bitcoin block might contain information about a specific transaction occurring between two entities, e.g., the sender’s identity, the recipient’s identity, and the amount of points being transmitted between the entities. Each block also has a unique hash that identifies the block and its contents. Any changes made inside a block will cause the hash to change. Each block also has a hash of the previous block such that each successive block points to the immediately preceding block.

The first block, known as the “genesis block,” cannot have a hash from a previous block, by definition. The hash system offers security because altering the data in a block alters the hash of a block. Once altered, the hash of an altered block no longer corresponds to the previous hash found on the successive block. When the hash of one block does not correspond to the previous hash of the successive block, the chain is invalid, and the chain rejects the invalid new block. Theoretically, algorithms could be deployed to recalculate the hashes on the blocks following the altered block, which would validate the chain anew and undermine the major utility of blockchain. However, blockchains have proof-of-work, which is a built-in mechanism that makes recalculating the hashes a formidable process.

Blockchains are also distributed, which means that a single entity does not manage the chain. The chain is managed by a peer-to-peer network whereby every member of the network is allowed access to the blockchain. Each new member of the network gets a full copy of blockchain, which can later be used to validate the entire blockchain. When a new block is added to the blockchain, each member of the blockchain network gets the new block and will individually validate the new block (proof-of-work). Once each member of the network has validated the new block, consensus is achieved. It is the use of consensus that allows tampered-with blocks to be identified and rejected.

Importantly, blockchain can be programmed to record and track almost anything, and the technology offers a potential solution to a number of the challenges facing the healthcare industry.

Solution for the Drug Supply Chain Security Act (DSCSA)

In 2012, a nationwide meningitis outbreak was traced back to a compounding pharmacy, New England Compounding Center (NECC) that engaged in drug manufacturing in violation of its state license. (See 21 U.S.C. § 353a.) Specifically, NECC shipped contaminated steroid injections across the country resulting in 753 patients becoming ill and 64 patients dying.

In response, Congress established a national standard for drug security by expanding the Food & Drug Administration’s (FDA) oversight of compounded drugs through the Drug Quality and Security Act (DQSA), which includes the Drug Supply Chain Security Act (DSCSA) in Title II.

The purpose of DSCSA is to improve tracking, detection, and removal of counterfeit, misbranded, or potentially harmful drugs from the drug supply chain. The DSCSA establishes a national standard for drug security, as opposed to the varying state requirements that had been regulating the space, by mandating the development of a prescription drug traceability system encompassing the full supply chain from manufacturer to dispenser for pharmaceuticals distributed in the United States. The system essentially mandates a blockchain-like verification system whereby drug supply chain stakeholders are required to verify upstream information about a product (e.g. who manufactured the product, when it was sold, who it was sold to, etc.) and provide downstream information (e.g. passing along the same information to the next entity in the chain).

Specifically, the legislation outlines a 10-year plan for developing an electronic, interoperable system to identify and trace prescription drugs as they move through the U.S. supply chain. The law includes several provisions requiring implementation, including: product identification, tracing and verification, suspect drug detection and response, notification of illegitimate drugs, wholesaler licensing, and third-party logistics provider licensing. The law also requires the FDA to develop standards, issue guidance documents (many of which have already been issued), implement pilot programs, and conduct public meetings as part of implementation efforts.

Blockchain as a Possible Solution for DSCSA

One of the core requirements of the DSCSA is that each package and homogenous case of product must contain a product identifier, which will be used to identify a product at any point in the drug supply chain. Pinpointing a product’s position in the drug supply chain requires an accurate accounting of a product’s chain of custody. Currently, no one source has all of the information about product transfers as a product moves from manufacturer to dispenser (e.g. hospital, pharmacy, physician’s office, etc.).

The ability of blockchain to track and store data chronologically across a peer-to-peer network makes the technology particularly well suited to solve for the traceability requirements imposed by the DSCSA. In addition, blockchain is uniquely secure, which could reduce common issues in drug supply, such as drug counterfeiting. For example, if a product is presented at any point in the supply chain without the correct hash, the distributed network can identify and reject the product as counterfeit.

Because blockchain offers such an elegant solution to DSCSA compliance, vendors are already piloting blockchain solutions to DSCSA requirements. For example, the MediLedger Project initiated by a San Francisco-based company, Chronicled, is developing a blockchain system that can demonstrate DSCSA compliance.

Similarly, a supply chain consulting group, The LinkLab, is working with industry partners to design and develop pilot blockchains that can meet DSCSA compliance requirements.

Solution for Medical Staff Credentialing

Medical staff credentialing can be a costly and time-consuming effort that conducted via phone calls, faxes, and snail mail. Because blockchains can be verified and updated incrementally, the technology may be well suited for the credentialing process. Blockchain encryption applications and access limitations create a secure database that can be accessed across all those participating in the chain. Each data contributor may be granted access to the entire ledger, or access can be restricted.

Another possible blockchain application is a credentialing “smart contract," an agreement to participate in a “living” credentialing database specifically designed to use blockchain technology as its infrastructure. The concept is that a practitioner’s credentialing information would be continually updated within a single database, with both inputs and access provided by those who have entered into a Blockchain Credentialing Process Agreement. In this fashion, it would not be necessary every time there was a need for credentialing information spanning the time period from completion of college through the most recent credentialing relevant events, to seek the information from the multitude of repositories where it resides. Instead, it would be instantly available, with access granted to view the information by the practitioner, directly, or through a direction given to the entity that maintains the database. The savings in time and cost from this type of approach would be significant as credentialing is a repetitive process where delay inevitably is costly.

In 2017, a pilot program involving the Hashed Health Consortium was initiated. The Hash Health Consortium consists of a group of healthcare industry stakeholders who work together to identify industry challenges that are potentially solved by blockchain technology applications. The goal of this early effort was to create a blockchain-based registry containing a reliable record of certifications and credentials. In 2018, Hashed Health launched a provider credentialing product that leverages blockchain to securely exchange information related to a clinician’s permissions to practice at a certain level or location.

Possible Solution for EHRs

Simple coordination of care has created the need for an EHR platform that allows multiple healthcare providers can view, edit, and share reliable patient data. The sensitive nature of health data, the ongoing challenges posed by interoperability, patient record matching, and health information exchange, make a potential solution to the management of patient health records in electronic format invaluable.

Blockchain is a platform that can securely store medical records, is amenable to real-time updating, and can be securely accessed by anyone given access to the chain. In this case, a single chain would represent a single patient’s medical record. Each new piece of health data would be visible to each member of a patient’s care team as the data is entered into the chain. Moreover, a single, national blockchain-based approach would allow patients to become the owners of their data and allow the information to travel with them.

Use of blockchain as a solution for EHRs is already being piloted at some of the nation’s premier medical institutions. For example, Medicalchain, a London-based startup that develops blockchain technology for storing EHRs, has a working agreement with the Mayo Clinic to explore different distributed ledger initiatives. Massachusetts General Hospital has engaged MediBloc, a Korean blockchain startup, to pilot new storage and exchange mechanisms that complement its existing EHR system.

Industry Resistance to Adopting Blockchain

Perhaps the embryonic nature of the technology or its ties to bitcoin have made blockchain suspect to industry players. Fears about complete reliance on a decentralized computerized system may also be at play in keeping blockchain from being deployed to solve complex issues such as DSCSA compliance. Adoption of blockchain requires having confidence in a store of information without reliance upon a trusted intermediary to authenticate a transaction, which causes healthcare organizations to hesitate when it comes to storage and processing of highly sensitive healthcare data.

If blockchain consensus is reached, then a transaction is authenticated. In some arenas, such as EHR, where quality of care and care coordinating are the central drivers, industry can pilot programs and adopt blockchain technology at their leisure. However, because FDA is already actively enforcing DSCSA, stakeholders are under pressure to bring their operations into compliance. Pilot programs will likely have a high bar to demonstrate DSCSA compliance before industry will adopt the technology. The upside to being under such pressure is that DSCA compliance may pave the way for further blockchain adoption in the drug supply chain industry.


Like any new technology there will be development and adoption fits and starts over time. But in the case of blockchain, there appears to be a concerted effort to move the technology forward. Other potential applications include: informed consent management, clinical trial data management, FDA regulatory new drug and device application processes, and insurance coverage, preauthorization and claims adjudication. Over the next two to five years we will likely see success stories that will prove that these early stage investments were worth the effort.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions