How can blockchain be used to strengthen the medical supply chain?

chirag May 26, 2023
blockchain in medical supply chain

In recent years, there has been a huge demand for enhancing supply chain efficiency within the healthcare industry to reduce costs and improve patient outcomes. This involves initiatives to streamline processes, optimize inventory management, and utilize data analytics to gain deeper insights into patient and provider requirements. By comprehensively understanding and effectively managing their supply chains, healthcare organizations can elevate the quality of patient care and generate favorable outcomes for both patients and providers.

The aftermath of the COVID-19 pandemic has made healthcare providers dependent on technology to manage healthcare supply chains, patient data, and insurance claims. Managing data in the healthcare industry is complicated and involves many organizations providing important services every day. If data management isn’t done properly and the Protected Health Information (PHI) is not handled as per HIPAA compliance,  the supply chain can be disrupted drastically, which is bound to have adverse and long-term effects on the efficacy and security of patient data in the healthcare sector.

This is where blockchain in the medical supply chain comes in. Blockchain-based solutions prove highly effective in the healthcare sector by providing secure retrieval and storage of data, leading to improved data integrity and streamlined medical conduct. These solutions ensure data provenance, promote authenticity in meeting the demands of the healthcare sector and guarantee the immutability of multi-directional transactions.

According to Gartner, in the upcoming years, more than 40% of the Chief Supply Chain Officers (CSCOs) will integrate a real-time supply chain data exchange solution, such as an application programming interface (API) or blockchain technology. This will be strategically done to enhance the efficiency and effectiveness of their supply chain operations.

Furthermore, blockchain technology in the pharma and medical sector is expected to witness a market size of $815.65 million in 2026, witnessing a CAGR of 22.10% from 2023-2030. Thus, now is the right time to invest in the technology if you wish to improve your supply chain management, increase the overall business efficacy, enhance traceability and transparency.

This article will help you discover everything related to blockchain in the healthcare supply chain. In addition to looking at the benefits of blockchain-based medical supply chain software, we will also help you understand how medical supply chain businesses can leverage blockchain for streamlining their business.

So, without further ado, let’s start by understanding the significance of blockchain for the healthcare supply chain.

Blockchain-based medical supply chain solutions

Significance of Blockchain in the Healthcare Supply Chain Industry

Significance of Blockchain in the Healthcare Supply Chain Industry

Blockchain technology has emerged as a promising solution to all the challenges the modern-day healthcare supply chain faces. By tackling critical issues and enhancing various aspects of the system, blockchain in healthcare has the potential to revolutionize the way we manage supply chains. Let us explain the role of blockchain in the medical supply chain in detail below:

Firstly, blockchain technology provides an advanced solution for improving traceability and provenance within the healthcare industry. Utilizing a decentralized and transparent ledger, the use of blockchain for the healthcare supply chain facilitates the comprehensive recording and tracking of each transaction and movement of healthcare products from manufacturers to end-users.

This process establishes a reliable record that affirms the product’s authenticity, quality, and integrity. Consequently, the implementation of blockchain in the healthcare supply chain serves as a crucial tool in addressing the issues related to counterfeit or substandard healthcare products, thereby working towards a single objective of ensuring patient safety.

Secondly, blockchain technology can strengthen supply chain integrity considering its distributed and tamper-resistant nature. The decentralized essence of blockchain ensures that data cannot be modified or tampered with without any proper user authorization. By leveraging blockchain’s immutable ledger to record transactions, healthcare organizations can establish a robust system for effectively tracking and managing products, thereby mitigating the risks associated with fraud or data manipulation.

Furthermore, blockchain technology in the healthcare supply chain contributes to improved efficiency and cost reduction within the healthcare industry. Through automation and streamlining of critical processes like inventory management, procurement, and logistics, using blockchain for healthcare supply chain eliminates the need for cumbersome manual paperwork and reduces the administrative overheads. By optimizing the utilization of resources, blockchain enhances operational efficiency, eventually leading to substantial cost savings.

These efficiency gains and cost reductions make way for improved patient care, as healthcare organizations can allocate resources more effectively and redirect saved funds toward patient-centric initiatives and services.

Blockchain-Based Medical Supply Chain Software Features

Blockchain-based medical supply chain management software offers several characteristics that can increase the healthcare sector’s overall efficiency and security. These qualities include, among others:

Features of blockchain-based supply chain management software


The blockchain-based medical supply chain management system’s immutability is crucial. Data cannot be altered after it has been stored on the blockchain. By ensuring that the data is secure, accurate, and dependable, this feature lowers the possibility of data breaches or manipulation.

Transaction History

All stakeholders may see the whole transaction history of any drug or medical device in the blockchain-based medical supply chain, which promotes transparency. This transparency keeps the supply chain free from fraud, waste, and corruption. Additionally, it enhances accountability throughout the supply chain and enables patients to confirm the legitimacy of the products they receive.

Smart Contracts

Built on the blockchain, smart contracts are self-executing contracts. Furthermore, they are based on predetermined criteria and can automate the execution of specific tasks, such as payments or product shipments. Smart contracts can be used in the medical supply chain to automate a number of processes, including confirming the legitimacy of items and guaranteeing compliance with legal standards.


One of the major features of blockchain in the medical supply chain software is easy tracking. The location and status of the product are recorded on the blockchain as it passes through the supply chain. This tracking ensures transparency and accountability, which enables all stakeholders to see the whole transaction history of any drug or medical device.

Regulatory Compliance

Regulatory compliance is guaranteed by the blockchain-based medical supply chain, which complies with rules, including the FDA’s track-and-trace standards. These compliances such as Health Insurance Portability and Accountability Act (HIPAA), General Data Protection Regulation (GDPR), etc., enables the healthcare sector to fulfill its legal obligations and safeguard the public from fake or subpar pharmaceuticals and medical equipment.

[Also Read: How to Develop a HIPAA-Compliant Mobile Application]

Patient Verification

Blockchain in the medical supply chain can be used for identifying patient records as well. When the product is delivered, they can look up its whole transaction history on the blockchain. This openness increases patient safety and faith in the healthcare system by enabling the patient to confirm the product’s authenticity and regulatory compliance.

Record Keeping

The procedure begins with the maker of medications or medical equipment, who enters the product’s information on the blockchain, including its composition, expiration date, and batch number. The other nodes on the network then verify and save this record, ensuring the data’s security and accuracy.

Uncovering the Blockchain in Medical Supply Chain Benefits

From increased transparency to improved traceability blockchain can revolutionize healthcare logistics, thereby ensuring patient safety and operational efficiency. Let us look at multiple benefits of blockchain in the medical supply chain in detail:

Benefits of blockchain in the healthcare supply chain

Decentralization: The decentralized nature of blockchain-based medical supply chain management is one of its most important advantages. The blockchain distributes supply chain management over a network of nodes rather than relying on a single central authority. This decentralized method boosts security, lowers the possibility of fraud or manipulation, and ensures the supply chain keeps running even if one or more nodes malfunction.

Greater Security: Enhanced security is one of the most sought-after benefits of blockchain in the medical supply chain that has led to the increased adoption of the blockchain-based software. The medical supply chain’s record is made tamper-proof and secure using blockchain technology, which reduces the concerns of fraud, forgeries, and other illegal behavior. By adopting blockchain-based supply chain management, medical product producers, distributors, and patients can have more confidence in the dependability and quality of medical goods.

Enhanced Efficiency: The implementation of blockchain in the healthcare supply chain management system can automate a number of processes, including documenting transactions, monitoring product movement, and confirming regulatory compliance. The supply chain can become more efficient thanks to this automation, which can also save time and money.

Better Transparency: All stakeholders may examine the whole transaction history of any drug or medical device in the blockchain-based medical supply chain, which improves transparency. By increasing accountability and lowering the possibility of fraud, this transparency also ensures that the supply chain runs smoothly.

Increased Patient Safety: Blockchain-based medical supply chain management can increase patient safety by enhancing medical items’ authenticity, accuracy, and security. Patients can confirm the legitimacy and conformity of the items they get, lowering the possibility of negative side effects or other harm.

Improved Data Privacy: Because the blockchain is decentralized, there is less chance of data breaches or cyberattacks because sensitive data is not kept in a single area. Additionally, using encryption and other security measures ensures the protection of patient data from unauthorized access.

[Also Read: How does blockchain resolve data privacy and security issues for businesses?]

Enhanced Trust: The medical supply chain’s stakeholders can have mutual trust amongst each other, thanks to the adoption of blockchain. Blockchain-based medical supply chain management can promote confidence among producers, distributors, regulators, and patients by offering a safe, open, and effective system.

Custom AI and Analytics solution for supply chain

Real-World Examples of Organizations Using Blockchain for Managing their medical Supply Chain

Companies at the forefront of adopting blockchain technology are demonstrating the vast potential it holds. By implementing the right blockchain in medical supply chain solutions, these organizations have increased their overall accountability and transparency and have established a highly efficient and precise supply chain across various industries.

Here are the few organizations that have implemented blockchain in their medical supply chain solutions:

1. DHL

DHL, the world-famous logistics organization, has launched a new prototype that utilizes blockchain technology to improve pharmaceutical supply chains. This software allows them to track and authenticate their pharmaceutical products, which helps to reduce the risk of counterfeit drugs infiltrating the supply chain.

2. Blockpharma

Blockpharma, a French startup, is combating counterfeit drugs through the use of blockchain in its medical supply chain. Their innovative solution enables consumers to easily scan unique QR codes on drug packages, thereby verifying the authenticity of the products and ensuring they remain untampered.

3. Walmart

Walmart is currently implementing a pilot project based on blockchain technology to monitor and trace food products within its supply chain. This initiative holds potential implications for medical supplies as well. By harnessing the power of blockchain, the project can enhance transparency, traceability, and overall efficiency throughout the supply chain. The primary objectives of implementing the distributed ledger include strengthening food safety measures and improving quality control mechanisms.

4. Mediledger

The Mediledger Project is a collaboration between world-famous pharmaceutical manufacturers such as Pfizer, Genentech, and AmerisourceBergen. The project is using blockchain technology to enhance the efficiency and security of the drug supply chain. It enables real-time tracking of medicines and works towards diminishing the likelihood of counterfeit products.

Blockchain-Based Medical Supply Chain Software Development Process

To ensure that the blockchain-based healthcare supply chain management software meets the custom needs of the healthcare industry, is in compliance with regulatory requirements, and seamlessly integrates with existing systems, it is important to hire a reputed blockchain and healthcare software development company like Appinventiv with years of expertise in the same. Here is an overview of the typical development process we follow:

Blockchain-based medical supply chain software development process

Requirement Gathering:

Collaborating with stakeholders, such as healthcare providers, manufacturers, distributors, and regulatory authorities, the initial stage is to gather thorough requirements. The scope and functionality of the project will be more clearly defined after we are aware of their unique requirements and difficulties.

Design and Architecture:

The design and architecture of the software are created based on the requirements. Choosing the right blockchain platform (like Ethereum, Hyperledger, or Polygon), choosing the consensus method, creating the data model, and organizing the smart contracts and user interfaces are all necessary.

Development of Smart Contracts:

The essential elements of blockchain software are smart contracts. They specify the laws, reasoning, and automation governing supply chain transactions. During the blockchain-based medical supply chain software development process, smart contracts are created and deployed by seasoned blockchain engineers to control various processes such as product verification, inventory control, and payment settlements.

APIs and Integration:

Blockchain-based software must communicate with pre-existing systems, including inventory management software, ERP systems, and EHR systems. Application programming interfaces (APIs) are developed to enable frictionless data sharing and interoperability between the blockchain software and numerous external systems.

Testing and Quality Assurance:

Strict testing and quality assurance is carried out to guarantee the software’s functionality, security, and dependability. This covers end-to-end testing of the complete supply chain process, unit testing of smart contracts, and integration testing of system elements. Security audits and vulnerability assessments are performed to identify and address potential risks.

Deployment and Network Setup:

The program is installed on the selected blockchain platform, and the required network infrastructure is set up. This entails setting up nodes, configuring network settings, and assuring the blockchain network’s connectivity and accessibility to authorized participants.

Ongoing Maintenance and Upgrades:

The last step involved in the medical supply chain management software development process is offering proper post-deployment maintenance and upgrades to the software. To keep the software secure, up-to-date and compliant with shifting regulatory requirements, regular maintenance and updates are necessary. User comments and changing industry standards are used to guide ongoing monitoring and improvements.

Understanding the Medical Supply Chain Software Development Cost

To give you a brief idea, the blockchain-based medical supply chain software development cost can vary from around $40,000 to $200,000, depending on several features. For instance, the overall complexity of the software is the most vital factor that impacts the overall development budget. Simply put, highly complex software with an extensive feature list will cost you more than simple software with minimal features.

To gain a competitive business edge, it is vital to understand that full-fledged software with modern features capable of enhancing the overall productivity of the medical supply chain is rather the need of the hour.

Software ComplexityEstimated Development CostTime Frame
Simple$40,000 – $85,0003 to 6 months
Moderately Complex$90,000 – $135,0006 to 9 months
Highly Complex$140,000 – $200,00010 to 12 months

Other vital factors that impact the cost to build blockchain-based medical supply chain software, includes:

  • UI/UX design of the software
  • The location of the software development agency
  • The tech stack used for implementing the software
  • The coding process
  • The team size of the hired development agency
  • Quality assurance
  • Maintenance and upgrades

Explore our Blockchain development services

How Can Appinventiv Help You Gain Medical Supply Chain Supremacy?

The main objective of blockchain in the medical supply chain is to ensure the continuous availability of essential medical resources such as drugs, medical equipment, and healthcare services. An effective digitally transformed supply chain must efficiently manage the connections between suppliers and customers to achieve optimal customer satisfaction while maintaining cost efficiency. This entails procuring resources, effectively managing supplies, and delivering products and services to patients and healthcare professionals.

One significant benefit of these distributed systems is their ability to address challenges related to disclosure and accountability in scenarios where the interests of individuals and institutions may not align. Thus, blockchain technology offers a viable solution to enhance the overall accountability, transparency, confidentiality, efficiency, and reliability in medical supply chains.

A blockchain-based software development company like Appinventiv can play a pivotal role in ensuring your business’s efficient development of blockchain-based medical supply chain software. Our in-depth technical expertise of implementing blockchain in the healthcare supply chain enables us to design and implement a secure and scalable solution.

Our expert blockchain development solutions can enhance transparency, traceability, and efficiency in the healthcare supply chain. We conduct thorough requirement analysis, understand the specific business requirements, and tailor the custom software, keeping in mind the HIPAA compliance.

We can leverage AI and IoT in our blockchain for medical supply chain solutions, which further guarantees effective inventory management, streamline logistics, prevent infiltration of counterfeit products, enhances data security and improve the overall supply chain efficiency in the healthcare industry

We can implement robust smart contracts and encryption techniques to enhance the security and privacy of sensitive medical data. Our medical supply chain software development services further guarantees effective collaboration and project management, ensuring timely delivery and seamless integration of the software into existing systems.

Contact our experts to develop a blockchain-based medical supply chain management software capable of enhancing your business efficacy.


Q. What are the benefits of using blockchain in the medical supply chain?

A. The implementation of blockchain technology in the medical supply chain offers a multitude of advantages. Firstly, it increases traceability and transparency by generating an unalterable record of every transaction and movement of medical products, guaranteeing authenticity and quality.

Secondly, blockchain fortifies supply chain integrity by preventing unauthorized modifications or data tampering, which mitigates the risk of fraudulent activity. Furthermore, it facilitates secure and efficient data sharing among stakeholders, ensuring precise and timely information exchange.

Q. How can blockchain enhance the efficiency of medical supply chain operations?

A. Blockchain technology offers several benefits to the medical supply chain industry. Blockchain can significantly reduce administrative overheads and optimize resource utilization by streamlining and automating processes such as inventory management, procurement, and logistics.

In addition to this, real-time tracking of products ensures efficient inventory management and reduction in overall wastage. Furthermore, another blockchain use in the healthcare supply chain is facilitating secure and instant information sharing among stakeholders, enabling faster decision-making and streamlined collaboration.

Q. What are the prospects for blockchain in the medical supply chain industry?

A. Blockchain technology holds great promise for the future of the medical supply chain industry. It can potentially transform the healthcare sector by addressing major data transparency, traceability, and security issues. By providing a decentralized ledger, blockchain in the pharma supply chain can securely track and verify the movement of medical products, preventing counterfeit drugs and ensuring authenticity.

Blockchain-based solutions powered by AI and IoT can enable interoperability and data exchange in the upcoming years, further improving supply chain operations.

Q. How much does it cost to develop a blockchain-based medical supply chain management software?

A. The cost of developing a blockchain-based medical supply chain management software can vary between $40,000 to $250,000. There are several factors that further impacts the overall development budget such as:

  • Location of the software development firm
  • The UI/UX design of the software
  • The features and technology stack
  • Post-deployment maintenance and upgrades
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