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Blockchain

An enabler for life sciences and health care


Powered by Deloitte and AWS
Paul Roma, Deloitte Consulting LLP
Florian Quarre, Deloitte Consulting LLP
Adam Israel, Deloitte Consulting LLP
Mark Johnston, Amazon Web Services
Alejandro Flores, Amazon Web Services
Blockchain: An enabler for life sciences health care

Contents

Introduction 03

What is blockchain 04

Blockchain on the Cloud 06

Effective blockchain development 08

Challenges to health care transformation


and blockchain applications 09

Clinical trial use case deep dive: An illustration of how a


cloud-based blockchain solution can yield significant benefits 11

LSHC future, powered by blockchain 12

Deloitte empowers organizations to develop innovative


solutions to address business challenges 13

Deloitte and AWS help organizations innovate for the future 14

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Blockchain: An enabler for life sciences health care

Introduction
CXO’s have come to appreciate the world of strategic decision making and the
need for always available information; this provides an opportunity and desire to
answer questions and make business decisions as efficiently as possible. These
decisions have the effective potential for far-reaching impacts to people, industry,
and businesses across the globe. In the new insight-driven world, strategic decision
making is enabled by technology that can provide the right information at the
right time.

Technology now differentiates, disrupts, and penetrates all facets of business and
industry. With the unparalleled growth in the past few decades and a constant drive
to meet competitive global pressures have brought businesses to an interesting
juncture; a point of strategic convergence in which technology, savings, and the
demand for growth must intimately facilitate each other. One such promising
yet disruptive technology is blockchain—the distributed repository that holds
capabilities to radically reshape industries and change the way information is
transacted, stored, and shared.

The hype surrounding blockchain’s potential has traditionally been focused


on financial services; however, the life sciences and health care industry
(LSHC) is facing surmounting challenges and experiencing new levels of
scrutiny that demand a novel solution that can meet:
•• Patient security and trust
•• Collaboration amongst ecosystem stakeholders
•• Efficient business processing of customer transactions
•• Delivering authentic forms of care

To that end, the purpose of this paper is to:


•• Define the common benefits for enterprises to adopt cloud-based
blockchain solutions
•• Define key LSHC issues that cloud-based blockchain solutions could address
•• Describe Deloitte’s experience and leadership in this space
•• Describe the value that businesses can gain by adopting Amazon Web services
(AWS) for their blockchain technology and business demands

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Blockchain: An enabler for life sciences health care

What is blockchain?

Blockchain is a distributed and tamper- where entries are financial transactions, to


proof repository that provides a way for a medium that can enable decentralized
information to be recorded and shared information sharing and application
through a peer-to-peer community. In this operations. In this new evolution,
community, each member maintains his information on the blockchain could
or her own copy of the information and represent contracts, assets, records,
all members must validate any updates transactions, identities, or practically
collectively through a consensus process to anything else that can be described in digital
validate transactions and events stored in form. At its core, blockchain comes with a
the repository. specific set of capabilities: transparency,
disintermediation, trust, and auditability.
Blockchain has evolved beyond capturing The below figure defines these capabilities.
cryptocurrency transactions (e.g., bitcoin)

Transparency Disintermediation
All blockchain participants are able to view data By enabling transparency and trust, the
added to the chain, while the chain improves data blockchain can fulfill the roles that intermediaries
integrity by being the single source of truth traditionally provide

Trust Auditability
Blockchain’s connected data blocks and Blockchain data is immutable and
distributed validation structure establishes trust everlasting, creating an exhaustive
between participants without them having to means of record keeping
know one another

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Blockchain: An enabler for life sciences health care

With all new disruptive technologies, there is a tendency to apply the solution before understanding its true capabilities and intent. Although
blockchain has many capabilities, it is important to understand what it can and cannot do before identifying potential applications.

Blockchain has many capabilities, but it is important to understand what it can and cannot do:

Blockchain is not •• Bitcoin is a type of cryptocurrency that uses blockchain cryptography to securely record monetary transactions.
Bitcoin •• Blockchain properties provide the underlying technology that has enabled bitcoin and other cryptocurrencies to
rise in popularity.

Blockchain is not an •• Vast amounts of information that require absolute privacy within a single organization (e.g., customer account
enterprise database information) is meant to be stored in an accessible location for viewing/querying (i.e., an enterprise database)
•• A blockchain is not meant to be a substitute for this purpose of information storage—using it in this way would be
inefficient and would not take advantage of its properties.
•• Instead blockchain is designed to record specific transactions and data events that are meant to be shared across a
network of parties with a need for transparency, collaboration, and immutability (e.g., updating a patient record with
many additions as they progress through a clinical trial)

Blockchain security •• While the identity of the submitter is captured through private-public digital keys and therefore is as anonymous
does not mean as one desires, blockchain’s secure characteristic is related to the fact that the information contained in the block is
inherent data interrelated to all other blocks in the chain.
privacy •• Blockchain’s secure capability does not imply privacy. The intrinsic security feature of blockchain means that chains
are tamper-proof, and changing a block’s content requires altering each block onward, which is made exponentially
impossible the farther away from the newest block the change occurs.
•• Each implementation of blockchain can then employ techniques that will supplement blockchain’s secure core
capability to provide the desired degree of privacy for its end users –information encryption, access control, etc.

Blockchain is not •• A blockchain can take on one of two orientations, public and private.
always public •• A public blockchain is available for anyone to add to and participate in the consensus process, which is to determine
which data blocks are valid and should be added to the chain. Public blockchains are fully decentralized and open,
require all participants to validate proof of work/proof of stake, and transaction submitters pay fees to a miner to
process the block.
•• A private blockchain contains permissions stipulating the ability to view data, add to the chain, and participate in the
consensus process. In this structure, the blockchain could be made fully private (strictly within an organization) or
across a network of participants (e.g.,multiple partnering organizations).

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Blockchain: An enabler for life sciences health care

Blockchain on
the Cloud

As a nascent technology requiring Capacity planning


experimentation and a fail-forward-fast Reduce guessing on your infrastructure
mentality, blockchain is a key technology needs. When you make a capacity decision
to be developed and hosted on a Cloud prior to deploying an application, you often
Computing environment. end up sitting on expensive idle resources
or dealing with limited capacity. With Cloud
Cloud Computing provides a simple way to Computing, these problems go away. You
access servers, storage, databases and a can access as much or as little as you need,
broad set of application services over the and scale up and down as required with only
Internet. Cloud providers, such as AWS a few minutes' notice.
own and maintain the network-connected
hardware required for these application Increasing speed and agility
services, while you provision and use what In a cloud computing environment, new IT
you need via a Web interface or API’s for resources are only ever a click away, which
programmatic and automated control. means you reduce the time it takes to make
AWS can offer numerous benefits, relevant those resources available to your developers
to blockchain and other application from weeks to just minutes. This can result
development over on premise solutions: in a dramatic increase in agility for the
organization, since the cost and time it takes
Trade capital expense for variable to experiment and develop is significantly
expense lower.
Instead of having to invest heavily in data
centers and servers before you know how Lower overhead by no longer running
you’re going to use them, you can only pay and maintaining data centers
when you consume computing resources, Focus on projects that differentiate your
and only pay for how much you consume. business, not the infrastructure. Cloud
computing enables you to focus on your
Benefit from massive economies own customers, rather than on the heavy
of scale lifting of racking, stacking, and powering
By using cloud computing, you can achieve servers, databases, network gear, and
a lower variable cost than you can get on storage arrays.
your own. Because usage from millions of
customers are aggregated in the cloud; Go global in minutes
providers such as AWS can achieve higher Deploy your application in multiple regions
economies of scale which translates into around the world with just a few clicks. This
lower pay as you go prices. means you can provide a lower latency and
better experience for your customers simply
and at minimal cost.

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Blockchain: An enabler for life sciences health care

07
Blockchain: An enabler for life sciences health care

Effective blockchain
development

Beyond the inherent Cloud Computing •• Bitcoin blockchain is a platform simple and time-efficient method for
capabilities, AWS supports a growing focused on applications of the bitcoin initiating your organization’s blockchain
number of blockchain technologies, cryptocurrency development to help you:
providing a low-cost, secure, and rapidly •• Hyperleder blockchain is an open •• Enact infrastructure immutability with
deployable platform where organizations source project created by the audit and logging using Cloudtrail and
can experiment and develop blockchain Linux foundation, which created an AWS configuration templates
applications. alternative smart contract computing
•• Build a reliable blockchain deployment
platform
Blockchain on AWS offers a more effective by leveraging automation and
and efficient experience in employing a One click blockchain requisitioning: monitoring capabilities, such as
variety of blockchain solutions: CloudFormation and Cloudwatch
Blockchain development traditionally
requires significant configuration of •• Compartamentalize blockchain
Access to multiple protocols, such as:
multiple technologies (e.g.,blockchain deployments via several security
•• Ethereum blockchain is a distributed protocol, application development models by leveraging virtual private
computing platform, featuring smart platform, and storage). With an AWS- cloud (VPC) as a foundation.
contract functionality. It provides a based blockchain-cloud solution, the
decentralized virtual machine (EVM) underlying blockchain and connectivity
that can execute peer-to-peer contracts to supplemental applications can be
using a cryptocurrency called ether deployed with one click. Creating a

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Blockchain: An enabler for life sciences health care

Challenges to health care


transformation and blockchain
applications
The health care industry is facing numerous The existing network structure and
challenges and undergoing tremendous its generally inconsistent and lax audit
transformations across providers, payers, processes also give rise to provider billing
and life sciences. Major industry actors are fraud, waste, and abuse. It is estimated that
undertaking aggressive changes to their 5-10% of health care costs are fraudulent
operational and technology landscapes, resulting from excessive billing or billing for
with a shared goal to deliver ever more value nonperformed services.3
and care to their patients, while radically
decreasing their operational expenditures. Transaction processing and automation
Yet the industry is experiencing significant Regional and national payers are weighed
issues in undertaking these transformations, down by complex, organically grown or
such as: custom configured claims processing and
adjudication engines that are required
Patient trust and control to process 4.6 million+ claims each day. 4
Patients interact with a many of providers Breakdowns in any piece of the claims
and medical organizations over their system can significantly delay processing
lifetime. Each interaction is accompanied times causing prompt payment penalties for
by important, sensitive information the payer and inconsistent revenue cycles
that is grouped in the form of a medical for the provider.
record. However, managing access to this
information can be cumbersome and not Apart from existing system inefficiencies,
easily accessible by the patient, and given payers often struggle with billing dispute
the rise of data breaches the information management as claim details can be
isn’t always secure. adjusted/changed with providers and payers
being at odds over the single source of truth.
In 2015, there were 112M health care record
data breaches due to a hacking/IT incident.1 Delivering authentic care
In 2016, it is estimated that one in three In the life sciences sector, pharmaceutical
health care recipients will be a victim of a companies often struggle to track drugs
data breach.2 through the development life cycle from
clinical trials through global supply chains—
Ecosystem collaboration resulting in a lack of traceability and
Existing provider networks and health transparency. Defeating factors resulted in
information exchanges tend to suffer from 30% of drugs sold in developing countries
a lack of coordination and transparency being counterfeits.5
into all patient activities and measurable
outcomes. As a result, providers typically
have a fragmented view of the patient and
struggle to articulate their value-based care
worth to payers.

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Blockchain: An enabler for life sciences health care

Common LSHC Issues how blockchain can help

Patient control A patient’s medical record can be secured through blockchain’ s private-public key mechanism, in which the link
and trust between the patient’s identity and the information housed on the blockchain can only be interpreted with the private
key. In this way, high-level patient demographic and medical history information can be stored directly on the blockchain
(e.g., gender, age, vital signs, chronic illnesses), but remain nonidentifiable to a specific patient.

Ecosystem As a patient visits providers, selected data events from each interaction can be directed to a shared blockchain within
collaboration a defined network of providers. Providers can be incentivized to share their information with one another because the
culmination of data, across the provider types, is key to accurately understanding which treatments are providing the
most value, at the best price, to patients. Trusted and available patient information will assist providers and payers to
optimize medical resources and support risk based payment models.

Transaction A simplified smart claim contract with pricing terms atomically tied to the product definition can be created in
Processing and coordination with the payer and provider and published to a blockchain in a transparent manner. Providers that adopt
automation this simplified contract can continue to submit claims using standardized electronic claim forms. Once the information
is submitted, adjudication would take place in real time, on a claim per claim basis and can also trigger payments
automatically when certain conditions are met.

Authentic As a pharmaceutical drug moves beyond the R&D phase of its life cycle, the blockchain can provide visibility and end-
care delivery to-end traceability to the global supply chain. As drug units are fitted with electronic serial numbers (as part of the Drug
Quality and Security Act),6 the identifiers can be encoded on the blockchain to establish the drug’s footprint. As the drug
moves through the supply chain, intermediaries can validate receipt of the drug and provide updates (e.g., date shipped,
end customer). As the drug’s transaction history grows, its transcript can be provided to the government regulator ad
hoc to comply with reporting regulations and pinpoint the drug’s current status and location.

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Blockchain: An enabler for life sciences health care

Clinical trial use case deep dive:


An illustration of how a cloud-
based blockchain solution can
yield significant benefits
Challenge overview are not accurately reported, evidence of a from existing systems to the blockchain
The typical clinical trial process is timely, treatment’s effectiveness and the impact for immutable auditing and stakeholder
expensive, and difficult to execute due on patient health becomes distorted and visibility.
to the numerous stakeholders involved: untrustworthy.
Institutions carrying out testing, data safety When specific and standardized clinical trial
management boards, the sponsoring A cloud-based blockchain opportunity data is stored on the blockchain (e.g.,dosage,
pharmaceutical company, principal Blockchain can provide the ability for vital signs), it becomes immediately
investigators, and regulators. Across collaboration across interested stakeholders transparent to all parties that have been
these stakeholders, there are logistical (e.g., institutions, sponsors, regulators) permissioned to access the chain (in a
issues faced when collaborating, as well by storing clinical trial results on a cloud- private blockchain orientation). As such, if any
as potential fraud and abuse concerns based blockchain. The blockchain can be a patient’s identifiable information is stored
that should be addessed to help ensure cost-efficient platform, not solely operated on the chain, it would be immediately visible
that clinical results maintain their integrity by a singular entity, that can be entrusted to all parties. Alternatively, the blockchain
through interim and final analysis. These to store the immutable results to help can shield underlying patient identities, and
issues contribute the staggering costs of negate selective reporting and outcome reattach them in the event that the identity
running a clinical trial, averaging between switching while also providing the ability needs to be known. This disconnect between
$30 to $40 million.7 to be accessed for reporting and analysis the patient and their associated blockchain
purposes. data can be achieved through the blockchain’s
In clinical trials, multiple stakeholders public-private key mechanism.
require access to review results. Data AWS’s agile deployment, variable-cost
safety management boards review and model, and global footprint is the ideal Once the selected data is posted to the
monitor results for adverse events, while platform for a clinical trial blockchain blockchain, clinical trial stakeholders can
sponsoring organizations and regulators solution. Clinical trials require agility to run reports on the available information.
monitor interim data sets for early potential effectively determine the patient data Furthermore, smart contracts could be
indicators. Often expensive electronic data needs and the technology infrastructure created that trigger off of specific data
management tools are used to track results, to support collection, while minimizing cost events, which could automatically send
which can add up to 10% of a clinical trial’s impact during short-duration trials that may notifications to the data safety management
cost.8 Moreover, these tool are usually only last a few months. Therefore, creating board and other interested stakeholders.
owned and set up by one of the sponsors, a blockchain solution can be fluently
providing disparate views for different integrated when the clinical trial begins and Implications
groups involved in the study. is spun-down when the clinical trial has Adoption of a cloud-based blockchain
ended and reporting requirements have system for storing and reporting clinical
Additionally, at the institution level, there is a been satisfied. Moreover, AWS provides trial results could significantly reduce the
need to maintain security and immutability technologies to help enable next-generation costs of holding the trial, while improving
for clinical trial results to help ensure that environments that adhere to GxP and collaboration and transparency amongst
observed data retains its integrity and is not HIPAA regulations. stakeholders and provide a tamper-free
tampered. Selective reporting from clinical view into the results.
trials and switched outcomes (altering the When the clinical trial begins, the collected
purpose of a study based on the observed information could be stored on the In turn, the government regulator would
results) may occur: the COMPare Trials blockchain with minimal disruption to the be better equipped to evaluate clinical trial
Project reviewed a large sampling of clinical research organization performing the results and determine if a treatment is safe
trials and found that on average each study. The research organization could and beneficial to patients. The underlying
trial only reported 58% of its specified either adopt a blockchain specific front-end trust in the data could also be enhanced
outcomes while silently adding 5.3 new application to log the observed results or which could speed up the regulatory
outcomes.9 When clinical trial outcomes connect to an API that redirects information approval process.
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Blockchain: An enabler for life sciences health care

LSHC future,
The evolving industry landscape pharmaceutical drug monitoring
is one that requires health care process to track and trace drugs
organizations to think strategically from inception to consumption,
about providing value to patients and empower collaboration within

powered by and providers, anticipating future


challenges, sustaining core business
goals, adhering to regulations, and
a network of providers to efficiently
deliver value-based care.

blockchain
bolstering the bottom line while Installation of these blockchain
grappling with evolving payment applications can help the industry
models. improve the quality and value of care
delivered to patients while providing
The future is fast approaching. a cost-efficient technology that can
Blockchain will be a part of this improve the efficiency of existing
future, holding potential to recreate systems and processes; all of which
the medical data ecosystem to bring can contribute to a more secure
about the age of the patient-owned and personalized experience for the
health care record, enable smart patient.
claim contract adjudication where
results are instantly communicated
to providers, reconstruct the

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Blockchain: An enabler for life sciences health care

Deloitte empowers
organizations to develop
innovative solutions to address
business challenges
As the world’s largest professional services help our clients develop innovative and
organization, Deloitte has the technology practical solutions. We approach the
and business strategy capabilities and deep potential of blockchain on this industry
industry insight to help you solve the most like any new disruptive market force:
complex business challenges. Educating our clients on the underlying
technology and helping them recognize the
Technology and business strategy potential opportunities to positively impact
Deloitte approaches problems by bringing to their business by addressing existing
an executable strategy that combines inefficiencies and difficulties in adhering to
rigorous analysis, market insight, and regulations.
collaborative thinking to enable confident
action. Our expansive technology Blockchain capabiliites
experience across capabilities helps Deloitte provides business strategy and
organizations better manage their business blockchain application development services
and serve their customers, including to test out blockchain’s potential through
analytics and information management, proof-of-concept projects.
delivery, cyber risk services, and technical
strategy and architecture, as well as the A four-step framework is applied to assist
spectrum of digital strategy, design, and organizations in developing blockchain
development services. projects (1. Initiate, 2. Design, 3.Strengthen,
4. Implement). Initiation of a project begins
LSHC industry expertise with the identification of a problem that
Our professionals guide traditional health can be realistically solved by blockchain,
care and life science companies and designed to meet business requirements,
new market entrants in navigating the strengthened to take advantage of
complexities of the US and global health blockchain capabilities, and implemented
care system. As market, political, and through an application on top of a
legislative changes alter the industry, we blockchain protocol.

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Blockchain: An enabler for life sciences health care

Deloitte and AWS help


organizations innovate for
the future
Deloitte is a member of the Amazon Partner In order to address critical business on decades of combined experience and
Network providing specialization in a host of challenges and navigate an ever-changing some of the most effective use cases in
AWS and blockchain solutions. Customers technology landscape, today’s CXO’s cannot the world. By leveraging Deloitte’s and
around the world have leveraged Deloitte’s afford to sit idle. This is where Deloitte and AWS’s experience in Cloud and blockchain,
capabilities to transform their business to AWS are able to come together to formulate organizations can successfully solve
unlock the potential of the AWS cloud. a leading approach to a company’s vision problems, reduce costs, and realize
and overall business strategy, delivering exponential value.

Deloitte provides consulting services to help AWS provides the tools and services for organizations
organizations solve complex business problems to architect and deploy solutions that can satisfy
with blockchain through a step-by-step approach: their business demands:

Initiate: Before organizations develop Shared responsibility model: AWS operates,


blockchain projects, it is important to first Business Strategy manages, and controls the components from the
identify a targeted and applicable problem that host operating system and virtualization layer
can be solved by blockchain technology. down to the physical security of the facilities.
Blockchain App
Development Auto scaling: Helps you maintain application
Design: Stakeholder groups and regulators
availability and allows you to scale your Amazon
should be engaged early in the design process
Blockchain Infrastructure EC2 capacity up or down according to conditions
to set appropriate expectations and to
you define.
catalog necessary functionality for the overall
blockchain application to perform.
Cloud Services Cloud formation/orchestration: Allows a
system to be truly automated by scripting all
Strengthen: Leveraging blockchain functions to details of the infrastructure to fail and spin back
transfer and authenticate information, transfer up efficiently.
forms of value, and automatically execute
functions through smart contracts should be Distributed processing and scaling: Amazon
explored and evaluated for the specific use case. EC2 provides a wide selection of instance types
optimized to fit different use cases based on
Implement: When implementing the varying CPU, memory, storage, and networking
blockchain solution, organizations should capacity.
consider its orientation (private versus public),
as well as the underlying protocol (such as Cost optimization: AWS Trusted Advisor can
Ethereum or Hyper ledger). Further, a scaling help you reduce cost, increase performance,
plan should be developed to project the and improve security by optimizing your AWS
blockchain’s volume and processing frequency environment. Trusted Advisor provides real time
when scaled. guidance to help you provision your resources
following AWS best practices.

14
Blockchain: An enabler for life sciences health care

References Contacts
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Paul Roma
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breach_report.jsf proma@deloitte.com
2. IBM 2015 Cost of Data Breach Study. (2015). Retrieved September
29, 2016, from https://securityintelligence.com/cost-of-a-data-
breach-2015/ Florian Quarré
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from http://www.economist.com/news/united-states/21603078- fquarre@deloitte.com
why-thieves-love-americas-health-care-system-272-billion-swindle

4. CMS Factsheet (2015). Retrieved September 29, 2016, from


https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact- Adam Israel
sheets/2015-Fact-sheets-items/2015-10-29.html
Deloitte Consulting LLP
5. Center for Disease Control: Counterfeit Drugs. (2014). Retrieved adisrael@deloitte.com
September 29, 2016, from http://www.cdc.gov/features/
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6. Drug Supply Chain Security Act (DSCSA). (n.d.). Retrieved Alejandro Flores
September 29, 2016, from http://www.fda.gov/Drugs/DrugSafety/
DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct
Amazon Web Services
alejaflo@amazon.com
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9. Compare Trials Methods. Retrieved September 29, 2016, from


http://compare-trials.org/methods

15
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