CEO @ SRG CRO & A Kingsman @ ACROSS Global™
Let’s take a break from risks and take a look at another promising trend which is also in the area of Synergy’s particular interest, blockchain technology. Let’s talk about tokens…
Firstly, to make sure we’re on the same page, I’d like to explain the difference between tokens and cryptocurrencies. This is a very important nuance, which, for some reason, many people still miss. Today, when the blockchain is developing rapidly and is already knocking at every door, misuse of these terms is becoming a bad manner.
also called digital or virtual/alternative currency, is a media of exchange with a nature of digital asset. Each true cryptocurrency has special security basis – strong cryptography for protection of financial transactions, verifying transfers of assets, for control and transparency. Crypto coin works through blockchain – innovative version of distributed ledger technology.
In a simper way – cryptocurrency is an improved analogue of a traditional currency, but much safer, more global (even more global than the US Dollar;-) and with a decentralized mint. It’s the future of the global financial system!
are different. This is a special kind of asset which resides on its own blockchain or on top of other blockchain systems. Tokens are created and distributed to the users and investors through an ICO (Initial Coin Offering) – a specialized form of crowdfunding.
In contrast to the cryptocurrencies, tokens have much more functionality. They can be not only a mean of payment inside blockchain ecosystem, but also an Access token, Utility token, Security token, etc. Today’s functionality of blockchain with tokens provides an opportunity to implement and use smart contracts (BTW, smart contracts are the most promising area for clinical trials, we’ll focus on this in the next posts).
Back to tokens…
Back in 2016, at the MedCity conference (Philadelphia, USA) Nishan Kulatilaka, the associate director for applied technology @ Merck, noted the high prospects for this area. He said that pharmaceutical industry could be the second-largest sector to adopt the blockchain, after financial services . And this is quite a correct statement. We can observe its implementation already today, in 2018.
Why Use Tokens in Pharma?
First of all, blockchain provides safe and convenient platform allowing to record and group transactions. In the same time the latest cryptography system provides the highest possible level of security – very important option for many areas of pharmaceuticals and medicine.
Other advantages of blockchain with tokens:
Thanks to tokenization, anyone can become a participant in the pharma ecosystem, not only large companies with huge budgets. These are the colossal perspectives for financing and scaling the industry.
Among many advantages of using DLT for this area are: improving the efficiency of processes at all stages, reducing costs, increasing profitability, etc. Today we are witnessing a birth of a new age clinical trial solutions powered by blockchain.
Tokenization gives an opportunity to track and fully control not only the finished product, but also all the materials included in its production. So, the consumer can be completely confident in the quality of drugs and other pharmaceutical products that (s)he buys. And can check their authenticity in seconds due to blockchain.
We want to know about how drugs are manufactured, don’t we?
According to the Healthcare Global estimates, some counterfeit drugs are estimated to cause about 700,000 deaths each year. Deaths due to consumption of counterfeit medicines in the world annually – 800 000!
The use of blockchain, tokens and smart contacts will diminish these scaring figures by ensuring full control over all aspects of production and supplies in pharmaceuticals.
Smart contracts provide an excellent opportunity to reduce the inefficiency of the overall pharmaceutical and medical ecosystems. They allow multiple parties to enter into an agreement when there is no chance for mistrust and miscommunication, but there are more confidence, higher transparency and security. Fulfillment of the obligations of the parties at the same time is guaranteed by a mathematics, smart contract and the complex functioning of blockchain.
The required level of technical and information support for any, even complex, logistics chain can be achieved by using blockchain and utility tokens. And it’s really one of the best ways for the manufacturing pharma supply.
Thanks to blockchain, managers can do this important operation with considering on real-time demand for pharmaceuticals. So manufacturers can efficiently manage inventory levels and operative prepare for demand spikes. The creation of an efficient product flow, full customer satisfaction and steady financial gains – to name but a few benefits of transparency and supersonic information exchange in blockchain ecosystems.
Effective Management Systems
Blockchain platform with tokens has a great potential in this area: uniquely distributed network would help to create the innovative peer-to-peer supply chain and everyday management. And this is available to every company and product in the global sense. It allows worldwide token holders and investors to participate in the pharmaceutical development and supply network.
The most important advantage is making life easier and safer for the final consumerby minimizing a number of supply chain players in pharma ecosystem.
Considering the above, tokens are the key to the innovation and growth of future pharmaceutical and clinical trial management. In fact, there are great many other facets, and I’ll focus on them in my next post.
To be continued… Stay tuned.
P.S. For those who want to undertsand what Blockchain is really all about, I’d strongly recommend Nathaniel Popper’s Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money. Excellent reading!
Igor Stefanov is CEO of Synergy Research Group, the World’s First Agile Risk-Based CRO, totally devoted to the Agile Drug Development.