Modum: EU Regulation of Pharma Distribution Meets Blockchain Technology

A concept of Modum blockchain solution - logistics industry securing the shipping and tracking of highly-sensitive pharmaceutical products.

Modum, a tiny Swiss start-up 2016, developed a successful blockchain-based solution to new regulatory demands placed on pharmaceutical companies in the E.U. Such requests require quality-controlled, digitally monitored, secure logistics for shipping and tracking sensitive products (particularly temperature-sensitive ones).

The initial impetus for innovation by Modum was the complex, stringent new E.U. “Good Distribution Practices” published by the E.U. Commission in March 2013. They require reliable monitoring of pharmaceuticals, including uninterrupted temperature control, with accurate and timely compliance reporting.

The G.D.P. quality system for warehouses and distribution centers dedicated to medicine stipulates that distributors of pharma products meet World Health Organization standards for safety and security. All E.U. pharma companies and their logistics partners must comply.

Specifically, consistent quality management systems must be in place along the entire supply chain, from the first shipment of materials to manufacturing plants to the final shipment of the pharma products to their end-users.

Blockchain and IoT Technology Working Together

Modum is leveraging blockchain technology to create a distributed ledger to meet that challenge to pharma companies. Significant features of this ledger include tracking, monitoring, securing, and receiving steps with the Internet of Things (IoT) technology for digitizing all products, packages, transports, and other physical components into the blockchain-based platform.

Modum began by working with client companies, including Swiss Post. They applied elements of its technology to their logistics needs for medicine, other pharma products, and perishable foods. But by 2018, the company had created and was marketing a product, Modsense, that can be purchased and installed by a company, then modified and customized with available components.

Modum now does business by selling this product and then working with a company to apply it to their distinctive needs and integrate it into their other systems and ensuring “smart logistics” for “full end-to-end visibility, from manufacturer to patient and in real-time!”

“Interoperability” vs. “Siloed Blockchains”

Modum identifies its distinct value-added as “interoperability” because “Distributed Ledger Technologies” (a term it seems to prefer to “blockchains”) are “siloed” and increasingly limited by lack of interaction. In effect, Modum defines the essential “next step” for blockchain technology (or D.L.T.) as challenging the siloed structure for these reasons:

  • System semantics are often not compatible between differing distributed ledger technologies.
  • Data structures differ, also preventing easy data exchange among distributed ledger technologies.
  • Protocols differ from network to network and are not compatible with DL Technologies.
  • Trust models are not necessarily verifiable among DL Technologies.
  • Unified governance requires tall members to have the same access control, rollback, upgrade support, and auditing and regulation support.

In response, Modum advocates an open, interoperable data standard solution. Buying into the MODsense platform provides this shared data standard among all component organizations along the logistics supply chain. The MODsense flow chart refers to this as an “Inter Chain Network” with “Inter Chain Routers.”

MODsense focused upon the crucial shared data standard: temperature monitoring for quality-sensitive supply chains. It emphasizes scalable tracking of temperature and ease of doing so.

access to global market

The MODsense Platform

As designed and subsequently refined, MODsense focuses on the challenges of last-stage logistics. It monitors high-volume shipping and compatibility with enterprise resource planning (ERP) software a company may use for financials, supply-chain, other operations, manufacturing, and H.R. activities. MODsense also integrates with oher systems for warehousing, and track-and-trace solutions.

Companies can program their quality requirements (specifically G.D.P. regulations) into MODsense. MODsense will then authenticate temperature and other data that becomes immutable on the blockchain managed securely and efficiently on mobile apps. Modum began with a focus on pharma distribution but moved on to healthcare applications such as medical supplies, vaccines, clinical trials, and perishable foods.

In operation, MODsense involves five steps:

  1. The company sets the specific standards for a shipment. That may include temperature alarms and logger parameters. If loggers pair with the load, then no manual programming of the logger is required.
  2. MODsense logger pairs with that shipment, at which point the MODsense dashboard generates a bar code for each item. Each parcel is barcoded and given a label. Loggers are activated with a single tap and begin monitoring temperature.
  3. It collects data along the entire shipping route. The logger is tamper-evident, and if the private key of the logger is compromised, an intelligent contract vetoes fulfillment of the contract.
  4. It reads the logger to bring the data back to the blockchain platform. The information is verified and stored on the blockchain upon receiving the shipment. It enhances secure delivery since the shipper does not have to open the package but does not even have to know of readouts already performed.
  5. When receiving the shipment, the data is available immediately at any location of a MODsense dashboard. The quality control team gets an email or message about any temperature deviations or other issues. MODsense can generate reports to meet record-keeping mandates and demonstrate compliance.   

Technology Components

There are five MODsense components, including apps:

  • The MODsense T [temperature] Logger is wireless and equipped with Bluetooth, and N.F.C. Loggers are hardly a new technology, now hand-held, the size of a small cellphone. There are many brands. N.F.C. is “near field communications” between two electronic devices.
  • The MODsense Dashboard monitors data recording and sets configurations with a web app.
  • The MODsense Desktop APP works via Bluetooth, N.F.C. Pad, and barcode scanner.
  • MODsense Mobile App both activates and reads out the loggers using Bluetooth.
  • The blockchain protocol layer is Ethereum. The consensus method is proof of stake.

Summing up its completed digitalization projects, Modum describes these solutions as linking the world of physical goods distribution with the digital world of shipping data and related financial transactions.

Early on, Modum worked with Swiss Post to create a thermos-monitoring solution. Swiss Post is now among the permanent partners of Modum.

Among other early clients offering endorsements of Modum are Zur Rose Suisse AG, Chemgineering (warehouse design for sensitive goods), as well as Puregene AG (shipping cannabis seedlings)—to mention a few.

MODsense is now available off the shelf. Companies in Europe, Asia, and South America have begun adopting it. 

The MOD token

MODsense uses an ERC20 crypto-token, MOD. The token itself serves a function of governance, i.e., voting rights. Essentially, each MOD in circulation gives the right to one vote. Token holders decide, or vote, that Modum has or has not attained its predefined milestones. The complexity of terms, such as locked coins, sharing profits with Modum, converting the MOD to Ether, and an intelligent contract distributing profits to token holders in Ether, strongly suggests that this token, for now, is not an investment or speculation vehicle. It does trade, however—recently at about $0.18 on the IDEX.

Acquisition of Modum by Roambee

On August 2, 2021, a Silicon Valley company, Roambee, announced its acquisition of Modum. Modum has cheered the combination. Both companies are in the supply chain field but with different approaches. Roambee focuses on global distribution and logistics in less regulated non-pharma areas. The combination gives Modum access to a worldwide market and distribution system and gives Roambee validity in handling sensitive goods. A suggestion, not elaborated, that the new company may focus on “construction.”

The selling pitch of Modum, to date, has been blockchain and IoT adapted to the highly regulated handling of sensitive pharma products. It appears to have provided a solution to the updated, demanding new G.D.P. guidelines.

Final Thoughts

Modum’s more comprehensive claim to provide a solution to the challenge of interoperability certainly targets a widely identified problem with blockchain. Recent business reviews in Blockchain Healthcare Review have focused on companies built, at least in part, on interoperability. An example is Medibloc and its solution to the lack of interoperability of medical centers that maintain independent patient healthcare records. Another is PotCoin, which has become a banker to the cannabis industry. Both strive for interoperability of essentially siloed businesses and achieve it by exploiting the security, trust, immutable ledger, and lack of need for a “trusted authority” inherent in the blockchain.