Menlo One is excited to share we’ve been working on a massive research and development project to upgrade pharmaceutical supply chain by leveraging blockchain technology with our partner Authentag.
Putting Pharma Supply Chain on a ledger
The COVID-19 pandemic has shown the world that the supply chain for pharmaceutical and medical products needs to be improved. Supply chain is a space which has seen little innovation in recent years. Even in a country as advanced as the US the inefficiencies in the system have caused shortages in drugs and PPE during this crisis which have cost lives.
This year we have been working with Authentag, a leader in distributed cryptographically secure tracking systems in a collaborative effort with pharma industry leaders including SAP, Rfxcel, Tracelink, and Cardinal Health, to verify products thought a distributed ledger.
Implementing a distributed ledger will give the industry real time insight into the status, location, and origin of products as required. This means a product can get from the manufacturer to a consumer faster. It will reduce the chance for fraud and counterfeits. And leveraging blockchain tech opens the door for new possibilities for financing pharma with DeFi.
This research and development was supported by funding from the National Science Foundation.
The NSF, which helped fund the invention of the internet, barcode, and other other ground breaking technologies, has shown itself to be open and supportive of what is a complex application of blockchain technology, encryption, and massively distributed data management, all of which integrates into a real-world application of distributed data set analysis and response.
Using DeFi to improve Pharma financing
With inventory verification data tracked on a distributed ledger, we see a great potential in utilizing these data and applying them to finance within the Pharma industry. At the end of the Financial year 2019 the top 50 Pharmaceutical companies had over $155 billion of inventory on their books with an average cost of debt at 4.3% APR and a weighted average cost of capital of 8.4%. Financing more of their inventory from debt and lowering the cost of that debt through smart contract technology will save industry and patients billions of dollars a year.
We have been working with Authentag to research and develop a decentralized financial (DeFi) system that will remove middle man inefficiency from the financing of large trade finance debt instruments. This will give better rewards to individual lenders, lower the cost of capital available at scale to the industry, and increase the use of product verification throughout the lifecycle of a product, which will increase the probability of counterfeit identification by manufacturers, protecting patient welfare.
Menlo One is very excited to be providing our tools and engineering expertise to Authentag and other pharma partners to make the supply chain for which provides all of us life saving drugs and equipment stronger, more secure, and more transparent. For more information, please see this post from Authentag.