Q&A with Derek Lurth of HealthLoq
HealthLoq’s Derek Lurth doesn’t just believe it when he sees it, and neither should you.
Q: What do businesses like yours help companies in the supplements space do, exactly?
Derek: So, let’s say a company is trying to get their product onto Amazon. Right now, Amazon’s onboarding process requires a certificate of analysis and GMP certification, or evidence that it was manufactured in a GMP certified facility. Companies wanting to sell on Amazon can retrieve documentation off the Internet, manipulate it, make up their own and just submit it.
Q: Which leads to what?
Derek: You’ll see, for example, product testing performed by various universities and other industry stakeholders, and you will see that a large percent of the amount sampled either doesn’t contain the products on their label that they say they do, or they have other stuff in there that's not on the label. So, while it’s great that Amazon has these onboarding requirements, there's obviously a hole in the process because you have so much stuff on there that's not legit.
Q: So, there’s a real problem with document integrity then, and, consequently, product integrity?
Derek: Yes. It's super easy for anyone to manipulate documents electronically and submit them. So, the giant weakness in the supply chain right now is that no matter where you are in the product lifecycle, you can't, with 100% reliability, count on the documents that you receive as legitimate.
Fortunately, if they have the right technology, companies can now say, with 100% confidence, that the testing documentation is all original, unaltered and from the stated source. And this is true for not only the major testing labs, but the smaller labs, too. The tech available now verifies that a lab is real, and that it has gone through the proper certification.
Q: What has been the technology game changer here?
Derek: Well, for one, blockchain is important because the technology allows for an immutable or unchangeable sequential ledger of transactions, so no one can go in and monkey with it and mess with the data in hindsight. And if there's the slightest alteration, like if a comma or a period is missing that was on the original, or you dotted the “i” and it wasn't there before, it will come back as not a match, and you know the document has been altered.
Q: Can you walk us through a real-world example?
Derek: Okay, say you're trying to source your ingredients from reputable suppliers. You want to get the best cost for it, and yet you want it to be real and to trust those ingredients are what the ingredient supplier, or broker, is saying they are. So, the manufacturer says, “Alright, give me your certificate of analysis for this batch of curcumin. The supplier submits it and then, since the manufacturers already has the software downloaded and, on their system, they receive it, check the digital, one-way encryption of the document against the database, which was submitted to it by a third-party lab. Essentially, it’s a database of the digital fingerprints of real documents from multiple sources and then, when companies want to check the authenticity of documents they have received, they have the means to do so.
Q: So, this is more than just a software solution that allows for this, it is also a registry of sorts, yes?
Derek: Yes, although with the added benefits of not exposing any proprietary or private data—since only the digital fingerprints of documents are centrally stored—and not being hackable. Now the manufacturers no longer must wonder and hope that a document is real or not. And this kind of solution is about reinstalling trust in the process of certification.
Q: So, the real ROI on technology like this is twofold. One, liability is greatly reduced, and two, enhanced speed to market. This kind of system must inject fluidity into the process making it so much quicker.
Derek: On the reduction of risk, recently a large insurance provider for the supplement industry was willing to give significant discounts on product liability insurance because of the certainness solutions like this can bring. The benefits of these kinds of systems, including time to market, are real -- and varied.
Derek Lurth is the Chief Executive Officer and Co-Founder of HealthLOQ, a blockchain technology-based company that applies functional user-friendly and up-to-date digital applications that help strengthen and support evidence-based data for the natural products industry, and its consumers. With over 20 years’ experience in accounting, auditing and financial leadership, Derek has held key executive roles in both private and publicly traded companies in the natural products, pharmaceutical and home construction industries. Having started his career as a certified public accountant and auditor at Deloitte, a leading global provider of financial auditing, assurance, and advisory services, Derek has been able to transfer his knowledge and experience in a unique way to helping develop applicable blockchain systems.