Guest Column | May 27, 2020

DSCSA, Blockchain, & The Pharma Supply Chain — Where Do Things Stand?

By Michael Esposito, TrainReach Consulting, LLC

Blockchain Supplychain

Data sharing throughout the pharma supply chain is critical for maintaining product integrity and quality, especially considering the number of handoffs that occur throughout the entire process and the multitude of parties involved, which span several types of stakeholders across companies from manufacturers to the end consumer. There are considerable risks of creating adulterated product because of the many stages in the pharma production, packaging, and distribution processes, where product integrity can be compromised, and current verification methods may not provide the level of control throughout the supply chain that current and future situations demand.

The Drug Supply Chain Security Act (DSCSA) mandates product serialization, with a timeline that involves several stages, reaching full implementation in 2023. One of the key requirements of the DSCSA serialization is a “standardized numeric identifier” applied to each salable package, with this information maintained for at least for six years.1 The FDA expects that companies will have a track & trace system in place to enable the tracking of a product throughout the entire supply chain, including the lot number, transaction history, and a statement documenting the transaction.2 One of the final major pending requirements, due on Nov. 27, 2023, is the use of a secure electronic means for exchanging product information, down to identifying a specific package.3

We have already witnessed FDA enforcement activity for violations of the DSCSA. Major pharmaceutical distributor McKesson received a warning letter on Feb. 7, 2019 for a serious breach of the act, in which oxycodone tablets were substituted for naproxen in a bottle that reached a Rite Aid in Michigan. In a second instance, another Rite Aid in Michigan received three bottles of oxycodone with all of their tablets removed and substituted with naproxen and ciprofloxacin hydrochloride. The FDA likewise determined that McKesson had failed to exercise due diligence on compromised product identified by Albertson’s and GlaxoSmithKline and had not met the six-year DSCSA requirement for unique product documentation of the identification of compromised product.4

Data challenges are not limited to breaches of the DSCSA, or even to illegitimate product that infiltrates the supply chain. As an example, verification methods are often built into pharma manufacturing equipment, such as vision systems accompanying labeling machines.5 The data generated by these verification methods is often integrated into other systems that the company uses for access by many stakeholders in the company and certain partners outside the company, such as third-party manufacturers. The ever-increasing trend of connecting multiple devices on the same manufacturing system is a component of the Industrial Internet of Things (IIoT).6 With the growth of the IIoT has come a realization that these systems are vulnerable to hackers, potentially compromising data integrity and privacy.7

MediLedger Project Tests A Blockchain Platform

Blockchain has been studied as a potential solution for these vulnerabilities. The features of blockchain that make it attractive are the ability to share data with multiple stakeholders and the protection of that same data across the entire network that is built into its construction. With these advantages in mind, the MediLedger project began in 2017, representing a collaboration among a cross-section of stakeholders in the pharma supply chain — Pfizer, Lilly, McKesson, Amerisource Bergen, Walgreens, and Walmart, among others, with Chronicled as the custodian — to address blockchain and go beyond simple compliance with the DSCSA. The goals were to make blockchain a practical solution for all participants in the supply chain, address possible problems, describe how it would be constructed from an IT perspective, list its advantages over other potential solutions, fashion an onboarding mechanism for the various participants, create a governing structure for the management of blockchain in the supply chain, identify how the system would be compatible with other systems, and develop a value proposition.8 In February 2020, the MediLedger project issued a report detailing its findings on how blockchain could comply with the full implementation of the DSCSA and provide a model that could be used throughout the pharma supply chain.9

The MediLedger project report examined the requirements for DSCSA compliance in detail and kept in mind existing GS1 standards and recommendations for incorporating these guidelines to be compliant with the DSCSA.10 The report notes that a major advantage of blockchain is the ability to manage situations that deviate from the norm in business transactions, or “exception handling.” With existing technologies, the possibilities of disruptions to the supply chain are high. Four scenarios were anticipated in the MediLedger study: product arrives at a distribution center without an accompanying file; product overage is identified when a shipment arrives; product is picked at the distribution center without accompanying data; and data without accompanying product.11 These exceptions can be addressed by blockchain’s ability to identify product in the supply chain that may have been compromised. The report identified the situations that would reveal the existence of compromised product as duplicate serial numbers; indications that the product is suspect, expired, recalled, destroyed, or stolen; an incorrectly identified origin for the product; or a nonexistent Global Trade Item Number (GTIN). In these aspects, the goals of MediLedger and the DSCSA align well.12 The issues that McKesson had with identifying compromised product as detailed in the FDA’s warning letter highlight the importance of implementing these solutions.

Blockchain Benefits Go Beyond Compliance With DSCSA

The main goal of blockchain in the supply chain is to foster an interoperable network that would provide benefits across all the stakeholders in the industry. Above all, supply chain integrity is the major precondition for the successful operation of such a network. Likewise, blockchain could drive efficiencies in the future, be versatile enough to manage business transactions that would normally create complexities or increase the possibility of human error, provide traceability for cold chain products, make drug diversions and recalls more visible, and aid in forecasting to improve inventory management.

The MediLedger participants asked for the FDA’s assistance in driving the use of blockchain by indicating its position on how the system would be governed and clarifying its expectations on how product should be dispensed, disposed of, and removed when it meets its expiration date. Likewise, the report concluded that the supply chain efficiencies provided by blockchain should extend to stakeholders that are not legally accountable for product quality, such as shippers, hospitals, and patients. A gap was also identified in driving standards throughout the industry with respect to track & trace, which could be addressed by the FDA indicating its support for the creation of a nonprofit entity to meet this end. The report concludes that blockchain could provide benefits throughout the pharmaceutical industry by facilitating the harmonization of the current patchwork of disparate systems, which have led to communication issues, as well as the clarification of industry standards, thereby going beyond the tenets of the DSCSA.13


As the requirements for serialization and track & trace become more challenging to implement as we approach 2023, blockchain, by providing data integrity throughout the supply chain, becomes a more attractive solution to reducing the probability of errors occurring. As the MediLedger report demonstrates, there is an effort to make the benefits of blockchain available and operational for all stakeholders in the supply chain. At the same time, blockchain can provide benefits that unify the disparate data collection methods currently in existence and create a more secure means of data management and exchange. Taking advantage of these developments is critical for companies to keep up with regulatory and industry trends, protect data, ensure quality, and potentially achieve increased efficiency and cost savings in the process.


  1. Title II of the Drug Quality and Security Act
  2. Quality Production Laboratory Materials Facilities and Equipment Packaging and Labeling Regulatory Education for Industry (REdI): Focus on CGMPs & FDA Inspections. Presented at Sheraton Silver Spring, MD, July 15-16, 2015. Presenters: Karen Takahashi, Senior Policy Advisor, Division of Regulations, Guidance, and Standards, Office of Policy for Pharmaceutical Quality; and Allison A. Aldridge, Ph.D., Team Leader Division of Drug Quality, Office of Manufacturing Quality
  3. Bryant M. Godfrey, Ready or Not, Here It Comes! The Drug Supply Chain Security Act Requirements Are Almost Fully Upon Us. Are You Prepared? Food and Drug Law Institute, January 2020.
  4. FDA Warning Letter to McKesson Corporation Headquarters, Feb. 7, 2019, and
  5. An example of one of these systems can be found on the YouTube video “Pharma labeling with vision system and neck banding”
  6. Everything you need to know about the Industrial Internet of Things
  7. Cisco Security, Securing the Internet of Things: A Proposed Framework.
  8. MediLedger FDA DSCSA Pilot Project, p. 7.
  9. Leaders from 24 companies in the US Pharmaceutical Supply Chain collaborate to submit the MediLedger DSCSA Pilot Project Final Report to the FDA, proposing blockchain for an interoperable track and trace system for US prescription drugs
  10. MediLedger FDA DSCSA Pilot Project, pp. 14-15.
  11. MediLedger FDA DSCSA Pilot Project, pp. 16-17.
  12. MediLedger FDA DSCSA Pilot Project, p. 20.
  13. MediLedger FDA DSCSA Pilot Project, p. 25.


About The Author:

MichaelMichael Esposito, principal at TrainReach Consulting, LLC, has over 30 years of experience in the pharmaceutical industry and 19 in GMP training and document management. He has worked for Wyeth Pharmaceuticals, Pfizer, and Johnson & Johnson's McNeil Consumer Healthcare Division in a variety of areas, including packaging, project administration, quality assurance, government contracts, translations, systems training, and international operations. He collaborated on the development and implementation of the training portion of the consent decree work plan for McNeil and revised its introductory GMP course. Esposito is a member of the training organizations GMP TEA and the Association for GxP Excellence (AGXPE). His areas of interest include systems training, training effectiveness, post-training user support, process improvement, product security, and sustainable packaging. You can reach him at