Blockchain in healthcare updates
Clinical supply chains suffer from many of the same challenges (lack of transparency, inefficient data management, need for auditability, etc) as commercial supply chains but have less parties involved, which make it easier to implement a blockchain. The Clinical Supply Blockchain Working Group is comprised of Pfizer, Biogen, AstraZeneca, Merck, GlaxoSmithKline, Thermo Fisher, IQVIA, UCLA, Deloitte, Marken, Bracket, and Almac, and they’ve published a white paper here detailing their work to date and a bit on the future direction. LedgerDomain, the company providing the technology for this solution, is working with UCLA on one of the projects under the DSCSA’s blockchain focused pilot.
Patientory was the first major healthcare initial coin offering (ICO), at the time describing itself as a “blockchain-based distributed electronic medical record storage computing platform,” and selling a cryptocurrency (“PTOY”) that would power its network. Patientory raised $7.2m off of this vision in tandem with an exuberant cryptocurrency market.
Since then Patientory, like all healthcare ICOs, has had a mixed record. Patientory’s currency, PTOY, sold as a way to pay for storage of medical records on its network, has been mostly unusable for its lifetime and sunk from a listing price of $0.65 to less than $0.01 with volumes of trading (a critical measure of liquidity for investors) falling to similarly low levels. A quick analysis of the smart contract of Patientory’s currency shows that there is little usage of PTOY beyond trading. The Patientory Association’s Github hasn’t been touched for about a year.
But, nonetheless, Patientory Inc (the for profit company) has launched a beta mobile app with 350 users, which is more than most healthcare ICOs. Importantly they established a non-profit association which controls the proceeds from Patientory’s token sale. From the above article:
She [McFarlane] added the remaining 45 percent of the ICO funds are under the nonprofit’s management
That is a laudable move to make because equity holders and token holders have diverging interests and token holders have almost always ended up getting a worse deal when there is tension between those interests. One way that this issue might be resolved is to separate those interests into two entities: a neutral non-profit that governs a network and develops its technology, and a profit seeking company building on top of that network. Most big public networks (Ethereum, Tezos, Cosmos, etc) have a non-profit foundation that manage proceeds from their token sales and advocate for adoption, though there are some notable exceptions (EOS’ block.one and Ripple’s Ripple Labs are for-profit companies).
SimplyVital bills itself as a HIPAA compatible blockchain for healthcare and in 2017 raised $6.3m through an ICO. They came under scrutiny of the SEC for not registering their token offering with the agency and not taking steps to identify whether all of the participants in that token offering were accredited US investors. In April of this year they had returned the bulk of capital to investors. The SEC took notice of their remedial actions, in the end issuing a settled cease and desist order and taking no further action. You can read the SEC’s letter here and SimplyVital’s statement here. Some commentary from actual lawyers (I am not one!) can be found here.
What I'm reading this weekend
Would love to hear feedback and commentary on the above piece that I co-authored.
Pairs well with the The National Business Group on Health’s annual survey. Some highlights between these two reports that stood out to me:
Total health spending by and on behalf of a family of four with employer coverage tops $22,000
On average employers contributed $15,000 of that.
49% of employers are planning to deploy at least one advanced primary care strategy in 2020
34% said they were rolling out on-site primary care or near-site health centers
51% will offer more virtual care programs next year
85% of respondents rate high-cost drugs as the number one or two most concerning pharmacy issues
What blockchain opportunities does this create?
The folks at Keep and Summa launched a token called tBTC on Ethereum that is equivalent to, and can be redeemed for, 1 Bitcoin. That has been done in the past in a centralized way (see wBTC) but what’s unique about this is that tBTC uses a clever model involving cross-chain communication and collateral to keep it decentralized . The technical spec can be read here.
Why enterprises should care: cross-chain interoperability efforts are maturing and there is much to learn from bleeding edge projects like these.
This is quickly becoming the industry standard for data about developer activity in the crypto space. The takeaways for me were:
Ethereum has the largest base of contributors by far (~1200) which is ~4x times that of the runner up, Bitcoin.
Following up those two are EOS (224), Cardano (~125), and Monero (~100).
Many projects have a group of developers that frequently contribute, but often times this group is much smaller than you would expect.
Test nets and launches drive engagement
Infrastructure and decentralized finance projects are attracting the most new developers
We have a lot of room to grow!