Understanding The Chronicled Blockchain Solution For Pharmaceuticals

Falling Antibiotics Healthcare Background
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Patients in the United States receive $500 billion in pharmaceutical treatment each year. Behind this industry revenue, Intra-company transactions such as rebates, chargebacks, and other administration costs drive incentives and distribution between organizations. Chronicled provides blockchain-based MediLedger Network solutions to instantly complete these transactions, reducing human processing, revenue leaks, and cash flow inefficiencies that plague the industry.

Today’s technology provides a step function transformation in the way transactions are carried out. Rather than just sending data, Chronicled’s Industry Network 2.0 functions as a “virtual clearinghouse,” offering quick feedback on filed transactions and, if valid, adjudicating them in real-time.

Contracts & Chargebacks, Chronicled’s first industry revenue management system, automatically settles chargeback claims between pharmaceutical companies, distributors, and large purchasing organizations, ensuring accuracy in drug pricing for healthcare providers, drugstores, and other drug dispensers.

Challenges With Current Transaction Frameworks

In the current climate, transaction settlement is handled by the two transacting entities:

  1. One party begins the transaction, assesses it, and packages it with similar transactions in a file.
  2. The file is sent using Industry Network 1.0.
  3. The recipient unpacks the file and re-assesses all of the transactions with a new back-end, new business logic, and, in many cases, new reference data.

The process is cumbersome and inefficient, and both sides must cope with a slew of obstacles, including:

Duplicate effort – Both sides work on the same project, but with separate technological and human resources.

Disputes – When alternative reference data and business logic are used, the results vary.

Expensive error management – Disputes and errors are settled through emails, phone calls, and meetings – an expensive process. Some transactions have a 3 -5 percent error rate, requiring extensive personnel investment to rectify issues.

Delays in clearing – Some business transactions take at least 3 to 5 days to settle, and in some situations, weeks or months. As a result, a significant amount of working capital is frequently committed to controlling the risk of “transaction purgatory.”

Manual reconciliation — In complex error scenarios, manual reconciliation may be required since it is particularly difficult to determine the cause of the issue.


Benefits For Healthcare Industry

Industry Network 2.0 uses blockchain technology resulting in the creation of the virtual clearinghouse. Sophisticated cryptography, like Zero-Knowledge Protocols, is also used to keep the data private.

Business rules are agreed upon by the participants and are committed to the Network. The network guarantees that all participating partners have a cohesive view of transaction-related datasets. Once a transaction is filed, the transaction is settled using a consolidated platform. As soon as this occurs, all involved parties are alerted that the transaction has been completed.

Chronicled’s solutions are a radical transformation that will benefit the industry greatly. Some of the benefits include:

  • Automation – More components of the business process have been automated, and a stronger foundation has been laid for additional automation of downstream processes.
  • Low operating costs – These processes require a leaner workforce to run and manage.
  • Contract compliance – With decentralization and well-established virtual clearinghouse and adjudication rules, the system is more reliable as it cannot be unilaterally “bent” or compromised.
  • Instant Settlements – Real-time feedback is supplied and is especially important for faulty transactions. They can be instantly corrected and resubmitted by the entity that filed them.
  • Simplified auditing — The Network contains a “cryptographic memory” that enables third parties to check the accuracy of submitted statements autonomously. For example, a business can demonstrate that a product was sold for a given price without disclosing other data.

Use Case


The Chargebacks process helps distributors offer pharmaceutical pricing discounts to health institutions and other drug dispensers premised on manufacturer contract pricing. The stages below illustrate the process:

  1. Manufacturers sell drugs to distributors for a “list price”
  2. Manufacturers undertake negotiated special pricing with dispensers
  3. Wholesalers execute such arrangements and sell to Dispensers at a loss
  4. A wholesaler who sold to a dispenser returns to the manufacturer and requests the difference – a “chargeback” — to complete the financial transaction.
  5. If they applied the right price, the manufacturer returns the chargeback.

Even for individuals who aren’t familiar with the procedure, there are numerous obstacles to overcome: Is the right price being charged? Is the Dispenser still eligible for the price? Is the product still available for purchase, or was it returned?

 These are simple issues, but those working with chargeback transactions understand that the complexity is significantly higher, and there are many deviations to deal with. A constant ping pong of information, emails, and telephone conversations between the parties involved is frequently used to resolve such intricacy.

Chronicled’s Industry Network 2.0 platform can automate such complexity by organizing the transactions between the counterparties. While the Network validates any transaction published in real-time, all entities are kept up to date on what is going on.

Breaking Down the Mediledger Network

Consensus Mechanism

While the network is technologically and technically decentralized, it operates Enterprise Ethereum with Proof of Authority consensus on several independent nodes. The Mediledger Network is politically impartial and legally centralized through Chronicled’s role as Network Manager. 


For both preexisting and emerging applications that will be deployed on the network, there will be a distinct workgroup for every specific problem or problem category. The application design, production, and testing process are led by a “steering committee” for every work team, initially made up of pharmaceutical sector players.

When a solution comes online, organizations that run the technology (node operators) and keep the framework in an alert functioning state become part of the steering committee. Each participant enters a contract created by Chronicled that establishes expectations and sets legal standards.


The solution’s main design focuses on processing serialized units. Each unit is controlled as a Non-Fungible Token(NFT) with a trading partner in charge of custody. A serialized unit’s custody can be exchanged, and a blockchain smart contract controls the exchange function.

Smart contracts are being created to implement industry-wide or cross-industry business norms. The incumbent custodian initiates the transfer, which must be accepted by the receiver for the transaction to be completed. Only authorized producers of a product will be able to provide their individual serialized units on the blockchain.

If used in a serialized drug supply chain, this approach might, for instance, transmit the custody of a serial number from a wholesaler to a dispenser in a certified and controlled manner. This allows a recipient to verify that the serialized product they receive has a complete chain of custody.

Benefits and Applications of the MediLedger Network

The MediLedger Network creates an ideal bridge between trading partners, combining a protected peer-to-peer communication network with a decentralized blockchain system. 

It offers:

Business Rules

The network ensures that your business rules are followed while receiving data and transactions from business partners and that errors are corrected at the source. Some of the products include:

Claim Adjudication

MediLedger Claim Adjudication allows wholesalers to enforce precision and adjudicate chargebacks immediately inside their system. Wholesalers constantly know which pricing for which customers are compliant with manufacturer contract regulations.

Roster Management

Roster Management allows you to pre-validate your rosters to ensure thorough and precise data by merging industry data such as HIN and DEA for all parties. This allows manufacturers to maintain more updated contract eligibility records leading to more accurate pricing for buyers. Manufacturers can start automating contract eligibility based on predictable and standardized roster data, industry identifiers, and documentation.

There are substantially fewer chargeback disagreements and pricing problems when trading partners are synchronized on Group Purchasing Organizations (GPOs) rosters and industry identifiers.

Contract Communication

Manufacturers, distributors, and GPOs may all stay up to date on the current contract status through the MediLedger Network. Chargeback disputes can be addressed in seconds, with all participants viewing the same up-to-date historical data. Distributors submit chargebacks based on their contract version.

 Once their contracts are aligned, wholesalers and distributors can eradicate many errors generated by contract misalignment. For distributors, real-time and authenticated contract modifications eliminate the possibility of contract load lags and mistakes while improving pricing precision for dispensers.


The concept of a clearinghouse is used to settle transactions between two parties in several sectors. With blockchain technology, no third party is involved in processing transactions; rather, the network itself provides the reference data and business logic. As a result, the future of pharmaceutical transactions is streamlined end-to-end transactions with no involvement of third parties.

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