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What is blockchain and what role it plays in pharma and medicine

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Blockchain has now become a very popular technology that is best known for its use with cryptocurrencies. However, it is also used in pharmaceutics and medicine. What are its advantages?

What is blockchain?

Blockchain is a distributed database with an unusual structure. While traditional databases store information in tables, blockchain collects information in groups - blocks.

Each block has a specific capacity and when it is full, it is closed. It also receives a unique identifier and time stamp. If there is new data, it goes to the next block. This in turn is linked to the previous block and together they form a chain. Blocks are combined using cryptographic mechanisms and all create an irreversible timeline.

Database decentralization is fundamental to the blockchain. Data is stored in many network nodes in different locations and a possible change in one storage location will not result in modifications of information in others. This makes the data tamper-proof and cannot be deleted or destroyed.

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Blockchain vs. finance

The fact that information stored in blockchain databases cannot be modified makes this technology a great bookkeeping tool. This was the first use of blockchain — Bitcoin was introduced in 2006.

Bitcoin is a decentralized currency that revolutionized the world of finance. It is independent of central bank policies and financial infrastructure. Transactions are also instant and free of charge. Following the example of Bitcoin, as many as 10,000 other cryptocurrencies have been created and this market is currently (2022) worth about a trillion dollars.

Currently, there are many cryptocurrency exchanges, where you can make investments. Loans secured by smart contracts are also provided that are cost-effective for the parties involved.

Other applications of blockchain technology

However, blockchain is not only cryptocurrencies. It is used in other areas due to the ability to store data securely and that the data is not susceptible to change. These areas are, for example:

  • Non-fungible token (NFT): this technology allows you to sign digital art. Thanks to this, there is only one original copy of a given work, which allows you to invest in this market. NFT is used more and more widely, enabling, for example, computer game developers to sell items that appear in them. This technology can be also used more broadly as an act of ownership of anything.
  • Insurance: smart contracts allow clients and insurers to make contracts more transparent. It is impossible, for example, to submit duplicate claims for the same event and payments are made faster.
  • Real estate: blockchain makes it easier and safer to verify financial and property information. It allows you to speed up transactions and reduce their costs.
  • Personal data and voting: thanks to blockchains, personal data can be stored securely, which allows, among others, for digital voting. The system allows you to check your voting rights and prevents you from voting multiple times.
  • IoT (Internet of Things): storing data from devices in databases based on blockchain technology provides greater security.
  • Logistics and supply chain: blockchain allows you to track the items in transit. It is known what route they take and that they have not been replaced.
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Application of blockchain in pharmaceutics and medicine

Blockchain has a chance to become one of the game changers in the field of healthcare. Some of the applications of this technology are already present in pharmaceutics and medicine, others are only in the testing phase. They are being developed by numerous startups mainly in the United States, but there is no doubt that successful applications will also find their way to Poland. Many of them are noteworthy and may become the industry standard in the future.

  • Drug supply chain management

The process of transporting drugs between the manufacturer and the final recipient is long and complex. It often involves many partners and manipulation of funds may occur during it. For this reason, manual records are maintained and recipients are able to provide evidence of the origin of the drugs. However, this does not give 100% certainty as to the originality of the products.

This problem concerns developing countries to the greatest extent. WHO estimates, that 1 in 10 drugs in these markets are counterfeit (1% in developed countries). About 17% of pharmaceuticals contain the wrong ingredients. A similar percentage of incorrect proportions of active ingredients and in 30 percent they are not present at all. This translates into the deaths of up to hundreds of thousands of people.

Most counterfeit drugs come from China and India. It is therefore crucial to monitor the progress of the delivery. This can be done using Internet of Things (IoT) devices that record such elements of the transport process as the location of the batch, trans-shipment points or storage conditions.

Thanks to blockchain, data remains decentralized, accessible to all partners and impossible to falsify. This creates trust between the partners and gives the recipient the confidence that they are receiving an original product.

Blockchain is also a recipe for the scourge of illegal export of medicinal products, e.g. using the reverse supply chain mechanism. Monitoring the transport of drugs can be a way to limit the phenomenon of unavailability of certain medical products in pharmacies.

  • Supply chain and insurance settlements using smart contracts

Blockchain can facilitate more than just supply chain monitoring. Suppliers and recipients of drugs or medical equipment can enter into smart contracts with each other. This allows organizations to be authenticated, contract details recorded, and transactions tracked. Settlements between entities are facilitated on the basis of conditions clearly defined in smart contracts. This helps to avoid conflict.

Smart contracts can also be used to manage medical insurance contracts. The immutability and easy availability of data allows insurers to conduct advanced analyses. Above all, however, it protects them against the risk of falsifying medical information and making unauthorized claims. For patients, blockchain means faster compensation payments.

  • Securing patient data, medical records and storing the

The decentralized blockchain database allows you to avoid the threat of data modification. This is particularly important in the case of medical information, where data manipulation may lead to a threat to the patient's health.

Storing patient information in the form of a blockchain allows doctors and other stakeholders to access always up-to-date and true data. Blocks are secured with unique identifiers, which ensures their authenticity. Saving documentation in blockchain databases also eliminates the need to transfer it.

At the same time, convenient access to medical records does not mean universal availability. Stakeholders can only access them with the patient's consent, which is recorded in the form of a transaction.

Medical data is also vulnerable to hacker attacks. Only in 2021 according to the FBI and the Department of Justice in the United States, 40 million medical records were stolen. Cybercriminals gained access to e.g. credit card information or health insurance numbers. Blockchain significantly increases data security, allowing you to avoid similar incidents.

  • Storing data from IoT devices

IoT devices will become increasingly important in healthcare. These include so-called wearables, i.e. devices that patients wear (such as wristbands or in the future even clothing equipped with sensors). Home scales, blood glucose monitors and other devices that can provide data on the patient's health condition can also be connected to the Internet.

Doctors and medical facilities may have access to the data after authorization. They should be properly secured to prevent theft or modification. Blockchain is perfect for these purposes.

  • Clinical data

The use of blockchain in conducting clinical trials can start with the recruitment process. The number of patients qualified for research has a chance to increase significantly due to recruiters' access to their data.

Patients can also enter into smart contracts with research providers. They will receive confirmation of clear rules for conducting research, and organizations will have a chance to use financial incentives.

Blockchain also guarantees the security and privacy of patients' medical data. The structure of the blockchain also means that the data cannot be modified, which prevents possible falsification of research results.

Blockchain risks

Concerns related to the use of this technology in healthcare are related to the technological limitation of public blockchain systems. This applies, for example, to speed and scalability.

The speed of data processing in a blockchain can be impaired due to the large number of users connected to the network. In the case of healthcare, instant access to data is sometimes necessary - it can be a matter of life and death.

Faster private blockchains may solve the problem. These systems are also decentralized, but access to data requires appropriate authorization. Their use can also improve security and confidentiality. Therefore, they are the best choice for many of the innovative blockchain applications we listed above.

There is also a security risk. It does not result from the characteristics of the system itself, but from the ‘human factor’. A patient may fall victim to phishing, i.e. swindling access to their medical data. Hackers can then steal not only information about a person's health, but also, for example, his NFT tokens. The problem being, so much data is stored in the blockchain database.


Despite some risks, blockchain brings innovations that allow for major changes in the healthcare industry. It is a technology that enables better data protection and management, controlling supply chains or concluding contracts in the form of smart contracts.

It is worth following the development of this technology and testing new applications. It is very possible that in some time they will become a standard, as they bring many benefits. Therefore, just like the finance market or trade in works of art, blockchain can revolutionize processes in pharmaceutics and medicine.

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