The blockchain technology in healthcare market is estimated to be valued at USD 159 Mn in 2024 and is expected to reach USD 641 Mn by 2031, growing at a compound annual growth rate (CAGR) of 22.1% from 2024 to 2031. Blockchain technology allows for more transparency and security in healthcare data management and transactions, which is the major factor driving increased adoption across the healthcare industry.

The market is expected to witness significant growth during the forecast period. Healthcare providers are increasingly investing in blockchain solutions to improve efficiencies related to insurance claims, medical records management and supply chain management. Adoption across different applications such as clinical data exchange and interoperability, claims adjudication and billing management, drug supply chain integrity is also growing.

Market Driver - Increasing demand for secure healthcare data management solutions

There has been a growing concern among healthcare providers and individuals regarding secure storage and access to sensitive health records and data. With more healthcare going digital through integration of electronic medical records and online storage of patient data, it has become crucial to ensure privacy and security of this information. Data breaches in the healthcare industry have risen substantially in recent years compromising millions of patient records. This poses a serious risk to individuals whose personal medical details, diagnostic test results, insurance records and other confidential information could fall in wrong hands.

Blockchain technology brilliantly addresses this issue through its inherent characteristics of decentralization and transparency. By distributing records across a network of nodes instead of central databases, blockchain makes data almost impossible to hack or alter without consensus. Each transaction on the network is permanently recorded on indivisible blocks encrypted with cryptographic protocols, providing tamper-proof storage. Access permissions can be programmed making data visible only to authorized parties. Additionally, transparency allows tracing records in case of any unauthorized access attempts. This gives both healthcare providers and individuals the assurance of robust data security and ownership over personal medical records.

The need for such fortified yet distributed healthcare data management solutions is driving increasing focus on blockchain integration. Several pilot projects are already demonstrating how this can safely and efficiently store sensitive information while meeting stringent regulatory guidelines. With medical identity theft on rise and more value placed on privacy, blockchain is emerging as a viable technology to handle exponentially growing volumes of digital health records in a secure decentralized manner. This factor is expected to be a major driver behind growing adoption of blockchain solutions across healthcare industry over coming years.

Market Driver – Growing adoption of digital health records and blockchain integration

Digital transformation of healthcare is well underway globally with many countries pushing large-scale implementation of electronic medical records and online health platforms. This transition brings advantages of convenience, accessibility and improved care coordination. However, it also necessitates robust record-keeping systems capable of centrally storing, sharing and analyzing voluminous patient data according to strict compliance protocols.

Traditional centralized databases have limitations in terms of scalability, interoperability and trust which is fueling interest around blockchain's role. Its distributed ledger architecture allows easy creation of digital health profiles and profiles worldwide with built-in identity, access and sharing functionality. Individuals can own their health identities on blockchain with full control over personal data. Doctors and insurers can securely access only required information with tamper-proof audit trails for transactions.

Several projects have demonstrated how blockchain can facilitate optimal utilization of electronic medical records through its inherent data management qualities. This is helping address limitations of current systems and push digital transformation further. Both private companies and governments are actively exploring integration of blockchain with their health IT infrastructures. With its ability to resolve longstanding issues, blockchain is well-positioned to significantly aid and expedite large-scale adoption of digital health records globally. This makes it a compelling driver for healthcare systems striving to go fully digital in an efficient, secure and interoperable way.

Market Challenge - High implementation costs of blockchain technology

One of the biggest challenges currently facing the adoption of blockchain technology in the healthcare market is the high implementation costs associated with integrating this new decentralized system. While blockchain promises benefits like improved data security, traceability of patient records, and interoperability between different healthcare providers, transitioning entire healthcare networks over to using blockchain comes with substantial financial requirements. Healthcare organizations need to invest in new computing infrastructure, hire experts who understand how to develop on blockchain platforms, integrate blockchain databases with their existing legacy IT systems, and provide training to medical staff on how to use blockchain-based applications. All of these implementation activities involve large upfront capital expenditures. For many financially-strapped public health systems and small private clinics, coming up with funds for a blockchain overhaul remains a major roadblock that slows down their ability to transition to this promising new technology. High costs pose a challenge to widespread blockchain adoption in the industry until solutions emerge to lower the financial barriers for healthcare providers.

Market Opportunity - Expansion of blockchain applications in decentralized clinical trials

One key opportunity area for blockchain technology in the healthcare market is its expansion into supporting decentralized clinical trials. Currently, conducting clinical research is a lengthy and expensive process due to factors like the need to oversee trial sites physically and track consent documentation and data collection manually using paper-based systems.

However, blockchain platforms allow for trial data and records to be securely collected and managed on a decentralized digital ledger without relying on expensive on-site monitoring. This enables tasks like remote patient enrollment, electronic informed consent capture, and automated safety data reporting. By streamlining operations through its use of smart contracts and transparent record-keeping functionalities, blockchain has the potential to significantly cut down costs and trial timelines for pharmaceutical and medical device companies. If more players in the clinical trials industry integrate this technology over the coming years, it could lead to faster drug development, improved research efficiencies, and increased access to experimental treatments for patients worldwide.

One of the most effective strategies adopted by leading players has been collaborating with other healthcare organizations, technology providers, and clients to develop and deploy blockchain solutions. For example, in 2017 IBM partnered with pharmaceutical companies like Merck and Kinara Capital to launch blockchain networks for supply chain management. This helped them gain early adoption and test blockchain applications. Similarly, in 2018 Microsoft partnered with healthcare giants like Novartis, Pfizer and Sagentia to develop blockchain-based clinical trial management platforms.

Leading players like Microsoft, IBM, and Hashed Health have deployed several pilot blockchain projects with healthcare providers to prove the technology's value and refine solutions. For example, in 2016, IBM successfully pilot tested a blockchain network with medical chain to securely share patient medical records between NHS hospitals in UK. In 2019, Hashed Health partnered with Cognizant to run a proof-of-concept trial tracking prescription drug supply chain using blockchain. These pilots have demonstrated the technology's capabilities and driven more production deployments.

Top firms have acquired relevant startups to gain talent and complementary technologies. For example, in 2021 IBM acquired Truistar, a blockchain firm focused on clinical trials, to bolster its healthcare offerings. Similarly, in 2019 Microsoft acquired Anthropic, an AI safety startup, to integrate AI with its healthcare blockchain initiatives. These acquisitions have expanded players' capabilities and accelerated their blockchain growth in the healthcare market.

Leading companies constantly invest in R&D to find new use cases, improve protocols, and address regulatory hurdles. For example, between 2017-2020 IBM invested over $200 million in developing Hyperledger Fabric for healthcare use. Similarly, since 2018, Microsoft has spent over $100 million in funding university.

Insights, By Application: Increasing R&D investments in drug discovery

The drug discovery sub-segment currently holds the largest share of 54.4% in the blockchain technology in healthcare market based on application. The use of blockchain in drug discovery facilitates decentralized and collaborative R&D among various entities involved in the process. Pharmaceutical companies and research organizations are increasingly investing in blockchain-based platforms to discover new drug candidates. These platforms allow sharing of clinical trials data, research studies, chemical libraries and patient health records in a secure manner. This helps in faster analysis of vast amounts of data and expedites the drug development workflow.

Furthermore, blockchain brings more transparency to the drug discovery process. It establishes an immutable record of intellectual property rights over new drug molecules. This encourages greater participation of players and prevents biopiracy. The integration of AI and big data analytics with blockchain databases aids in identifying potential drug targets. The reduction in R&D costs and time to market provided by blockchain is prompting government and private fundings in this domain. Overall, the ability of blockchain to enhance collaboration, traceability and efficiency of drug discovery research is fueling its adoption rate.

Insights, By Types of Blockchain: Public blockchain sub-segment dominates owing to decentralization

 Among various types of blockchains, the public blockchain sub-segment holds the dominant share of 45.7% in the market. Public blockchains are fully decentralized networks that allow anyone with an internet connection to participate without requiring permission. This open and collaborative nature of public blockchains makes it highly suitable for healthcare applications involving multiple independent parties. Public blockchain platforms ensure high levels of transparency, anonymity and accessibility for all stakeholders.

Healthcare data on public blockchains can be accessed by patients, doctors, insurers and researchers from across the world simultaneously. This helps in crowdsourcing healthcare insights. Being decentralized, public blockchains are not under control of any single entity. So there are no issues of centralized control and censorship. Furthermore, public platforms like Ethereum provide standard protocols for building blockchain-based decentralized apps (Dapps). This makes public blockchains relatively easier to develop on and deploy for various healthcare use-cases compared to private blockchains. The open-source and collaborative attributes of public blockchains are thus driving their higher prominence over proprietary private models in the industry currently.

• The blockchain technology in healthcare is poised to revolutionize the industry by addressing some of the most pressing challenges, including data security, patient privacy, and the inefficiencies of current systems. With over 690 healthcare data breaches reported between July 2021 and June 2022, the need for secure, immutable, and transparent data management systems is more critical than ever.

The major players operating in the blockchain technology in healthcare market include IBM Lifescience, ConsenSys, Equideum Health, Embleema, MELLODDY, Pistoia Alliance, Hyperledger Foundation, Infosys, Innoplexus and Tech Mahindra.

• In September 2023, Briya completed a USD 11.5 million Series A funding round to enhance its blockchain-enabled data exchange platform.
• In August 2023, Solve.Care launched the blockchain-based Care. Trials network to improve patient matching in clinical trials.
• In April 2023, PharmaLedger introduced electronic product information (ePI) using blockchain technology, enhancing patient access to drug information.

• By Application
  • Drug Discovery
  • Clinical Trials
• By Type of Blockchain
  • Public Blockchain
  • Private Blockchain
  • Hybrid Blockchain
  • Other Blockchains