EU Automation: Digitally securing the pharmaceutical supply chain
Errors in the pharmaceutical supply chain can lead to late delivery, increased costs and poor quality products, which can have a detrimental impact on consumers. Due to current trends changing the way the pharmaceutical industry operates, supply chains are becoming more complex, making it more important than ever to streamline operations. Here, Jonathan Wilkins, director at automation parts supplier EU Automation, explains how organisations can use digital technologies to improve the pharmaceutical supply chain and minimise the risk of errors.
In 2009, consumers of the pain reliever Tylenol reported a musty odour, requiring Johnson & Johnson to make numerous large recalls. It was eventually found that wood pallets used in shipment were causing the problem. The pallets had been treated with a fungicide that had decayed into a chemical that was causing the odour, as well as gastrointestinal adverse effects. The recall cost Johnson & Johnson $900mn and the damage to the Tylenol brand will never be fully repaired.
There are four trends making it increasingly challenging for pharmaceutical organisations to prevent supply chain errors like that of the Tylenol scandal. However, organisations can implement digital technologies to improve supply chain operations and ensure consumers receive a high standard of healthcare and safe and effective medications.
The pharmaceutical industry has been much slower to globalise than other industries, with high-income countries still dominating production and consumption. However, with many clinical trials now operating globally, including in developing countries, and many developing countries increasing their healthcare budgets, pharmaceutical supply chains are gradually globalising.
Often, a drug’s active pharmaceutical ingredient (API) will be manufactured by one contract manufacturing organisation (CMO), incorporated into the final dosage form by a second CMO and packaged by a third. It is becoming increasingly common for these CMOs to be in different countries.
Despite the increasing costs and complications caused by the globalisation of pharmaceutical supply chains, customers are expecting faster deliveries than ever before. Therefore, efficient transport, effective tracking and stringent quality control are becoming even more important.
According to a recent report by the Access to Medicine Foundation, one of the major causes of antibiotic shortages is a lack of visibility in the supply chain. Organisations can increase supply chain visibility using cloud technology to ensure real-time sharing of secure data. The cloud can be accessed by any authorised person, regardless of their location, so geographical boundaries are not a hindrance.
Augmented reality (AR) and virtual reality (VR) technology can also make it easier to work with people in other countries. The technology allows workers to visit sites overseas, whether for a meeting, a conference, to provide training or to observe the equipment and operations, without having to travel. If workers do not have access to AR or VR technology, there are several video conferencing platforms, such as Skype, that can be used to participate in meetings, share screens and send files in real time.
Despite the ease with which colleagues can collaborate overseas, it is still important to meet in person occasionally to maintain strong relationships. Technology can still be used to streamline the process — mobile phones, laptops, tablets and portable Wi-Fi hotspots make it possible to work while travelling.
It takes an average of three years from submitting a drug to the Food and Drug Administration (FDA) or European Medicines Agency (EMA), to the drug reaching a patient. This is not fast enough for personalised medicine — patients with serious illnesses often cannot wait three years for a suitable drug. Therefore, the supply chain for personalised medicine must be rapid, without negatively impacting product quality or regulatory compliance.
Investments in automation systems will be vital for speeding up the supply chain for personalised medicines, while ensuring the level of precision required for patient safety is achieved consistently. At Hannover Messe in 2017, Siemens demonstrated how automation can be used to design a manufacturing environment that makes personalised medicine more commercially viable. To help automation technology find its way into the personalised medicine industry, Innovate UK has up to £6mn to invest in technology that will help businesses to understand and meet the challenges involved in developing personalised medicines.
However, a fully digitalised factory is a big shift for most manufacturers, requiring rapid change. To make the process more cost-effective, manufacturers can make existing equipment smarter by retrofitting, as well as implementing new equipment.
Forecasting demand for personalised medicines is much more challenging than with traditional medicines. Production must be timed with prescribing, which means demand driven manufacturing resource planning and just-in-time (JIT) schedules will become more important. Organisations should make greater use of data, such as epidemiology information, genetic analysis and insight from wearable wellness trackers, to make predictions about demand and ensure sufficient and timely supply.
Personalised medicines are specific for individual patients and if the wrong patient receives the wrong drug, the consequences can be severe. Therefore, traceability along the supply chain is extremely important. Automated manufacturing lines can be equipped with radio-frequency identification (RFID) technology, to track and trace products during manufacturing, packaging and delivery. Radio waves can also be used to communicate information between a reading device and a product.
The global biologics manufacturing market is expected to show a compound annual growth rate of over nine per cent between 2018 and 2022, according to a recent market research report by Technavio. To be prepared for this growth, pharmaceutical supply chains should adapt to the additional requirements of biologic drugs.
The stability of biologics is complex because they are made from living organisms or contain components of living organisms. They often degrade by multiple pathways and these pathways may vary at different stages of shelf life. Also, many biologic drugs contain proteins, which can undergo slight structural changes in response to stresses such as temperature excursions. Slight protein structural changes can have large effects on the therapeutic properties of drugs. To make sure biologics are safe for consumption when they reach patients, the supply chain must be fast and physical conditions along the supply chain must be tightly and consistently controlled, to minimise degradation and structural changes.
Often, biologics require cold chain transport and storage, usually between two and eight degrees Celsius. Improving the cold chain capabilities in the supply chain requires a huge network of time and temperature sensors in factories, warehouses, trucks, labs and pharmacies.
Generally, temperature control is greater at earlier stages of the supply chain. Every drug has a label claim, which provides stability information. As drugs begin their journey through the supply chain, the manufacturer starts the clock by shipping full trailers of products with the same label claim. However, when the products reach wholesalers, pallets are broken up and products are comingled for distribution with others, meaning label claims become mixed. To make sure supply chains are temperature controlled in their entirety, the industry should pay close attention to improvements at the wholesaler stage.
FedEx’s TEMP-Assure portfolio maintains pharmaceutical products at consistent, required temperatures. When bad weather delays a shipment, the company moves the products into in-transit, temperature-controlled storage, to minimise the impact of the delay on the properties of the products. The company’s supply chain visibility system SenseAware comprises multiple sensors that monitor the temperature of containers in transit in real time. It indicates whether a shipment has been opened or subjected to light, humidity or sudden movement and tracks the entire supply chain.
Delta Cargo has also introduced digital technologies to ensure temperature control in the pharmaceutical supply chain. It has equipped its warehouses with temperature-calibrated coolers and uses thermal mapping to ensure the temperature remains consistent throughout storage containers, vehicles and rooms.
There are also biochemical technologies that could improve the biologics supply chain. A collaboration between StoneStable, a start-up in Oregon, US, and Portland State University is investigating improved ways to transport vaccines, a type of biologic drug comprised of viruses. The team is experimenting with coating viruses in silica, which renders them inert and resistant to hot and cold temperatures, and then returning them to their original state prior to consumption. This would allow vaccines to be transported at room temperature safely, which would reduce supply chain costs and the number of products discarded due to temperature excursions.
The World Health Organisation (WHO) recently estimated that one third of all medicines sold worldwide are counterfeits. As well as damaging the reputation of pharmaceutical companies and causing them a loss of revenue, counterfeit medicines can cause considerable harm to consumers if the ingredients are not the same as those of the genuine product. This has been demonstrated in Sub-Saharan Africa, where counterfeit malaria pills have been responsible for an estimated 116,000 deaths a year.
The prevalence of counterfeit drugs is expected to increase as global costs for healthcare increase and technological advancements make it easier to make exact copies of drugs and their packaging. Fortunately, there are several technologies that can help protect pharmaceutical products against counterfeiting. A common approach is to package drugs with a barrier to entry, which, if breached or missing, indicates that tampering has occurred. Examples include film wrappers, shrinkable seals and bands, breakable caps, tape seals and blister packs. The disadvantage of this approach is that the barriers are easy to mimic.
More advanced technology can provide greater protection against counterfeiting. For example, holograms can combine three layers of security features that show a product is legitimate. Embedded images, digital watermarks and invisible printing are also effective, because they require regulatory approval so are challenging to replicate. Also, chemical and biological tags can offer highly secure authentication, but are more expensive than other options and more challenging to implement.
The FDA recommends pharmaceutical manufacturers use multiple, periodically changing authentication measures on a product specific-basis, to provide the best possible protection against counterfeiting. This may involve physical barriers like blister packs, as well as holograms for first line authentication, in addition to covert features like scrabbled images, microtext or UV-sensitive inks for second line authentication.
Since 2009, the capabilities of technology have increased dramatically. This has given companies like Johnson & Johnson the opportunity to improve their supply chains, so that crises like that of the Tylenol brand do not happen again. For more information about how to digitalise your supply chain, visit https://www.euautomation.com/.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”