Blockchain Will Not Be Used For DSCSA Data Exchange

That’s right.  I have now concluded that Blockchain will never be used in the US supply chain to fulfill the DSCSA requirement for sellers to provide buyers with Transaction Information (TI) and Transaction Statements (TS) (see also “Could Blockchain Technology Be Used For DSCSA Compliance?”).  So if you are currently planning to do a pilot to test a proposed architecture to do that, I recommend that you adjust it to test something else (see also “What Should FDA Pilot?”).

In fact, the thing to test is whether or not it can be used to facilitate gathering the TIs for a given Standardized Numerical Identifier (SNI) going back to the original manufacturer, as needed after November 27, 2023 during a suspect product investigation or recall.  Those are rare events compared with the number of drug sales and shipments where the TI and TS will need to be exchanged.

How and why did I come to this conclusion?  Let me explain.


The way I see it, the main DSCSA 2023 requirements can be broken down in to two distinct requirements.

  1. Passage of TI and TS from seller to buyer with each change of ownership
  2. Facilitate gathering the TIs for a given set of SNIs back to the manufacturer

When considering potential solutions, I believe these two requirements should be thought of separately.  I think that will result in better proposed solutions.


Only a few weeks ago I explained how I didn’t think blockchain, or anything else new, was necessary to exchange the TI and TS for each shipment in the supply chain (see “EDDS: The New Data Exchange Requirements”).  I said:

Blockchain isn’t needed for the exchange of TI and TS, because those transaction documents only need to be transmitted from seller to buyer, point-to-point, just like they are today.

But I sealed my opinion only after I read the Healthcare Distribution Alliance (HDA) comments to the FDA that I wrote about last week (see “HDA Questions FDA’s Authority To Mandate A Centralized System For the EDDS”).  HDA did not discuss blockchain directly but they said:

“…[E]ach product identifier and other important data will be exchanged electronically, in a consistent, standardized manner, between trading partners. […]  Here we emphasize that the point-to-point connections to provide transaction data, including the important product identifiers, do not exist today between all trading partners. Without these critical connections, trading partners would likely be unable to realize the full potential of item-level serialization. Connecting manufacturers to all their wholesale distributors and wholesale distributors to all their dispensing customers, though complex and costly, will allow trading partners to consistently and accurately send, receive, and promptly retrieve, in accordance with international standards, unit-level purchase and sale information.

They are clearly talking about the same kind of point-to-point data exchange that I am talking about.  No one, outside of the buyer and seller, needs to be a routine part of that data exchange or have access to the data that was exchanged.  And this is the bulk of the communications that are necessary—today, and after the Enhanced Drug Distribution Security (EDDS) phase begins in 2023.

Point-to-point data exchange technologies are straightforward, and some have been in use within the US pharma supply chain for decades, so they are trusted and well understood.  No need to replace them with more complex and less understood technologies, just to achieve the same kind of secure point-to-point data exchange already in use.

HDA points out that these point-to-point connections are not yet established between every trading partner, but they will be necessary to meet the TI and TS exchange requirement of the EDDS.  Today they are established between virtually every drug manufacturer and the wholesale distributors they trade with.  They also exist between the larger wholesale distributors and their larger dispenser customers.

As the HDA hints at, they do not yet exist between smaller dispensers and their suppliers, whether large or small wholesale distributors or the drug manufacturer.  Perhaps this is why HDA, “…urges FDA to begin undertaking the small business assessment mandated by the DSCSA”.

In my view, smaller dispensers should be able to make use of the same kind of portals offered by wholesale distributors today (see “A Closer Look At Web Portals for DSCSA Transaction Data Exchange”), as long as the data is formatted in GS1’s Electronic Product Code Information Services (EPCIS) events within the EDDS timeframe.  But I will certainly listen to any argument HDA or others propose to insist that these companies also need to participate in the point-to-point data exchange in the EDDS.  Maybe I’m missing something.


That just leaves the second requirement, to facilitate gathering the TIs for a given set of SNIs back to the manufacturer.  Again, the need to do this will be rare compared with the frequency of change of ownerships of drugs in the supply chain.  When you isolate this requirement, I can see how an application of blockchain would be very helpful.

Rather than loading a blockchain with all of the data contained in every TI and TS, now all the blockchain needs to hold is every SNI and some way to allow authorized parties to learn where to query for the full TI documenting each change of ownership.  The blockchain would quite literally “facilitate gathering” the TIs, without literally holding them.  This is what needs to be designed and tested.  Pilots that do this will be very valuable for pointing the way toward the future.

By recognizing that the DSCSA EDDS contains two separate requirements, and keeping their solutions separate, I believe the solutions will be easier to find, more reliable, and cost less to operate over time.

By the way, who exactly should fall into the category of “parties authorized to gather the TIs back to the manufacturer”?  You might be surprised.  I’ll write about that in a future essay.