Solution to China’s vaccine scandal now in the hands of rising blockchain maven VeChain. Buy a few tokens?

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The News:

A new production scandal has undermined Chinese citizens’ confidence in domestically made vaccines, and the tech community is suggesting the solution may lie in a highly touted technology: blockchain.

VeChain (Shanghai), in partnership with DNV GL (Høvik NOR), is using blockchain in a drug and vaccine traceability system, a project supported by the Shanghai municipal government. The VeChainThor Blockchain, according to VeChain, captures “…all data involved in vaccine manufacturing and transport including getting vaccines from producers, storage facilities, cold chain distribution, hospitals and even usage.”

VeChain said data recorded by the solution are “…immutable and permanent,” FiercePharma reports. It can allegedly prevent future vaccine scandals through early risk warning and management and can help provide evidence and point to the responsible parties if a crisis does emerge. The solution is being developed and tested in Shanghai and will soon be rolled out across China.

The announcement comes amid a scandal that involves Changchun Changsheng Life Sciences (CCLS), one of China’s largest vaccines suppliers. An investigation by the Chinese government found the company “…systematically fabricated production and testing records” to cover up its unauthorized rabies vaccine manufacturing practice.

Concerns over the quality of CCLS’s other products and even Chinese-made vaccines sped across the country since it had previously provided 252,600 doses of substandard acellular diphtheria/pertussis/tetanus vaccines meant for infants and children under China’s compulsory vaccination scheme. Some tech-savvy Internet of Things (IoT) experts see an opportunity for blockchain adoption in the vaccine industry–or pharmas in general–to prevent similar cases in the future.

Blockchain, the backbone technology underlying bitcoin, is a digital ledger system. Instead of using a centralized database, the transaction data are evenly distributed across a network of multiple computers. How does that fit into drug manufacturing?

Because each entry or transaction is hashed into a “block” that’s connected with the prior block using cryptography. Data (the history of records) stored there are considered tamper-resistant unless someone can take control of the majority of computers in the system, which is virtually impossible.

Steve’s Take:

In an article (Chinese) published on WeChat last month, Li Xiaolai, a high-profile Chinese cryptocurrency tycoon, suggested that a “token-free blockchain” could improve transparency along every step of vaccine supply chain and thereby offer a solution to this latest debacle.

Li suggested such joint bookkeeping records all the details in the entire vaccine supply chain, from who manufactures the vaccine, to who’s responsible for quality control, to who at which hospital or CDC bought a vaccine at what price and when the vaccine was given to whom.

The transparency, traceability and falsification-proof advantages of such a system can help keep the public calm, Li argues. Since public health is at stake, a blockchain system for authenticating vaccine and drug manufacturing and transport doesn’t need cryptocurrency like bitcoin to incentivize people to participate, says Li.

But blockchain has its own limitations. For example, while it can resist data modification, it can’t guarantee the accuracy of the original data entered, says a recent report (Chinese) by Tencent Research Institute.

Multinational pharmas have already embarked on the blockchain journey. Last September, a blockchain-based joint venture called The MediLedger Project was formed to help track prescription medicines so that counterfeit drugs can’t enter the supply chain. Pfizer, Genentech, AmiresourceBergen and McKesson contributed to such project and building a pilot system.

Now it’s up to VeChain and its partner DNV GL–a Norway-based risk management and quality assurance company that provides certification services for big pharma companies and hospitals in Shanghai–to present blockchain solutions to improve much-needed medical standards and security in China. Toward such a lofty goal, VeChain developed a small temperature tracking IoT device that measures 41mm x 55mm x 9mm.

According to VeChain, the device is key because it “…can capture and record to the VeChainThor Blockchain all data involved in vaccine manufacture and transport including getting vaccines from manufacturers, storage facilities, cold chain distribution, hospitals, and even usage.”

China, which has been plagued by food and drug safety issues and tragedies, was hit with a vaccine scandal in 2016 when China’s version of the US Food and Drug Administration discovered that local vaccine manufacturers administered hundreds of thousands of faulty and falsely documented vaccines to Chinese school children. Authorities arrested 324 suspects and investigated 100 officials “…under suspicion of taking bribes, abuse of power, and negligence.”

Then in 2017, there was the DPT vaccine fiasco where a quarter million substandard doses supplied by CCLS were administered to babies as young as three months. Chinese authorities also reported that roughly 150,000 people received substandard DPT shots from Wuhan Institute of Biological Products.

Not exactly a record the government could be proud of, especially because of China’s expanding economy, the maintenance of which depends on high-standards for imports and exports.

Steve's Take: I expect #VeChain to be a top 3 #China-based project in terms of market cap by the end of 2018. Click To Tweet

Bottom Line:

“The VeChain vaccine traceability solution will be shown alongside other VeChainThor Powered solutions at the China International Import Expo in November– one of the highest-profile import/export conferences in the world,” the company said in a statement.

VeChain and DNV GL are both participating in this event and will showcase their blockchain assurance solutions. The two firms were specifically invited by the Chinese government. During the showcase, the Chinese government will “…highlight the state-backed collaboration with VeChain and DNV GL,” the statement continues. Currently, President Xi Jinping also plans to be in attendance.

VeChain as an investment?

VeChain is an Enterprise-focused IoT and dApp platform for products and information. This is being achieved through partnerships and collaborations with innovative brands and industries, largely aided by their partner and former incubator PwC.

VeChain literally translates into something like, “The Only Chain.” They eventually aim to be the one coin to rule them all –the new and improved Bitcoin, perhaps. Some KOLs agree and believe that VeChain will end up as the IBM of the blockchain world and many of the world’s heavyweights and Fortune 500 businesses will go to VeChain for their blockchain enterprise solutions. Goals like this can’t be achieved without significant business and technical acumen.

Business connections are VeChain’s strong point. Thanks to their relationship with PwC, they are able to collaborate with mammoth enterprises and extoll their company’s prowess and proficiency. Some of their other partners include: Microsoft; Renault; Kuehne+Nagel; Hyperledger; BitOcean; and China Unicom.

Expectation: I expect VeChain (VET) to be a top 3 China-based project in terms of market cap by the end of 2018. Growth in revenues looks like a lock.

If you’re intrigued and would like to diversify the ultra-high-risk portion of your portfolio, here’s where to buy VeChain: Binance and other platforms such as Huobi.

Circulating supply: 55.45 billion VET. Total supply: 86.71 billion VET.

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