Tag Archives: chain

Maintaining Supply Chain Security in pharmaceuticals: The need is now more than ever before.

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In today’s globalized economy maintaining Supply Chain Security (SCS), especially in the pharmaceutical sector across the world, is more critical than ever before. We have many instances of SCS being seriously breached, not only in the emerging pharmaceutical markets but also in the developed markets of the world.

Global examples of serious SCS violations:

Following are some at random examples of serious SCS violations globally in the recent times:

  • In 2007, over 300 people died in Panama in Central America after consuming a cough medication containing diethylene glycol, which was labeled as glycerin. The adulterant diethylene glycol was sourced from China and was relabeled as glycerin by a middleman in Spain, as reported by the media.
  • In March 2008, the US FDA prompted by around 81 drug related deaths in the USA, announced a large scale recall of Heparin injection, a well-known blood thinner from Baxter Healthcare suspecting contamination of a raw material sourced from China. Standard technology used by Baxter could not detect the contaminant, which the regulator considered as a deliberate adulteration. The contaminant was eventually identified as an over sulfated derivative of chondroitin sulfate, which costs a fraction of original heparin derivative. The ‘Heparin tragedy’ raised, possibly for the first time, the need of working out an algorithm to put in place a robust system for ‘supply chain security’. This need has now become critical as many pharmaceutical players, including those in India, are increasingly outsourcing the API, other ingredients and almost entire logistics from third parties.
  • ‘Business Standard’ dated August 24, 2011 reported that Ranbaxy Laboratories and the US health regulator are negotiating a settlement to lift a ban on the sale of the drugs produced at 2 of the company’s plants in India, which could involve payments and fines exceeding $1 billion. This ban, as the report says, dates back to 2008, when the US regulator banned 30 generic drugs produced by the company at its Dewas (Madhya Pradesh) and Paonta Sahib and Batamandi unit in Himachal Pradesh, citing gross violations of approved manufacturing norms.
  • ‘Business Ethics’ – the Magazine of Corporate Responsibility reported, “GSK facility in Puerto Rico suffered from long standing problems of product mix-ups, which caused tablets of one drug type and strength to be commingled with tablets of another drug type and/or strength in the same bottle…the subsidiary’s manufacturing operations failed to ensure that Kytril, an anti-nausea medication, and Bactroban, a topical anti-infection ointment, were free of contamination from micro organisms.” As a result, the US Justice Department reportedly announced, “GlaxoSmithKline, PLC (GSK) and the subsidiary agreed to pay US$750 million to settle charges that between 2001 and 2005 they distributed adulterated drugs made at GSK’s now-closed manufacturing facility in Cidra, Puerto Rico”.
  • As reported by Reuter, on April 30, 2010 recalled over 43 children’s medicines involving 136 million units and 12 countries in response to complaints from regulators and customers.  This recall included liquid versions of Tylenol, Tylenol Plus, Mortin, Zyrtec and Benadryl, as they “may not fully meet the required manufacturing specifications.”

Despite presence of one of the most stringent drug regulators, the issue bothers even the US:

In the wake of all these, ‘The New York Times’ dated August 15, 2011 reported, despite the fact that US now imports more than 80% of APIs and 40% of finished drugs mainly from India, China and elsewhere, the agency conducts far fewer foreign inspections as compared to domestic inspections. The US FDA Commissioner Margaret Ann Hamburg was quoted saying, “Supply chains for many generic drugs often contain dozens of middlemen and are highly susceptible to being infiltrated by falsified drugs.”

At another conference Ms. Hamburg said, “I think people have no idea in this country and around the world about the vulnerability of things that we count on every day and that we have a system that has big gaps in our protective mechanisms.”

FDA inspects only a fraction of foreign drug plants in the global outsourcing wave:

The investigative arm of US Congress, the Government Accountability Office reported, while US FDA inspected 40% of domestic manufacturing facilities in 2009, it inspected just 11% of the foreign manufacturing facilities, as the later outnumbered the domestic sites since 2008.

INSPECTIONS BY FDA

ESTIMATED PLANTS IN FDA INVENTORY 2009

2007

2008

2009

 TOTAL
India

64

64

59

187

502
China

19

36

52

107

920
Germany

26

34

36

96

228
Italy

28

28

30

86

168
Canada

20

19

35

74

310
U.K.

16

17

32

65

191
France

24

14

26

64

188
Japan

22

17

20

59

207
Switzerland

17

15

18

50

100
Ireland

14

11

19

44

63
All others

83

69

97

249

888
Total

333

324

424

1,081

3,765

NOTE: Most frequently inspected foreign countries. SOURCE: Government Accountability Office.

US FDA’s Counterfeit Drug Initiative:

The initiative includes the following measures:

  • Secure the product and packaging
  • Secure the movement of drugs through the supply chain
  • Secure business transactions
  • Ensure appropriate regulatory oversight and enforcement
  • Increase penalties
  • Heighten vigilance and awareness
  • International cooperation.

If such instances are available from the developed markets of the world, especially from the US, one can well imagine what is happening in the emerging markets of the world. In the developed markets, at least these are detected and rectifying measures are taken. Unfortunately, in the emerging markets scores of such criminal instances go undetected taking innocent lives of the patients.

Fast growing global outsourcing initiatives have increased the risks by manifold:

Thus even the US FDA acknowledged that fast growth of globalization in drug manufacturing has outstripped the agency’s resource pool for effectively inspecting all overseas outsourcing facilities.

As a result of the outsourcing wave in the US, the number of US FDA approved local drug manufacturing sites in the country is gradually coming down since 2008, with a commensurate increase in the number of foreign sites.

2000

2002

2004

2006

2008a*

Domestic

Foreign

Domestic

Foreign

Domestic

Foreign

Domestic

Foreign

Domestic

Foreign

2625

1150

2700

1500

2900

2000

3000

2500

2480

3800

NOTE: US FDA-registered drug-manufacturing sites with at least one product listed in FDA database. *a Preliminary estimates. SOURCE: US FDA

Stakeholders need to be extremely vigilant:

Pharmaceutical players and the drug regulators from across the world should put proper ‘fool proof’ systems in place to eliminate the growing menace of criminal adulteration of APIs, drug intermediates, excipients entering in the supply chain together with preventing any breach in their logistics support systems.

Regulators fail to keep pace with the fast growth of global generic industry:

Many feel a shift in prescription towards generic drugs, especially in the largest pharmaceutical market of the world – the US, is making the regulatory task of the FDA to inspect all drug ingredient suppliers indeed quite challenging.

Currently, 70% of all prescriptions in the US are contributed by the generic drugs, which indeed play an important role to contain the health care cost. However, as an innovative drug goes off patent a single manufacture’s product gets transferred to multiple manufacturers located across the world, making the task of the drug regulator to ensure high quality and safety standard of the same drug extremely challenging.

Conclusion:

SCS, therefore, deserves to be of prime importance for the pharmaceutical companies across the globe. Recent high profile SCS related cases, as mentioned above, have exposed the vulnerability in addressing this global menace effectively. All pharmaceutical players should realize that an integrated approach is of paramount importance to eliminate this crime syndicate, which is taking lives of millions of patients the world over.

It is worth repeating, securing pharmaceutical supply chain on a continuous basis is of critical importance for all the pharmaceutical players across the globe. However, the process will no doubt be expensive for any company, especially when counterfeiters find ways to bypass any such system very quickly.

Like other industries, in the pharmaceutical sector, as well, cost effective procurement is critical, which makes many pharmaceutical players, especially, in the generic industry not to go for such expensive process just to maintain the SCS.

Thus a strong corporate governance mechanism in all pharmaceutical companies must ensure, come what may, putting in place a robust SCS system is not compromised in any way… ever… for patients’ sake.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

The importance of ‘Supply Chain Integrity’ in ‘Global Supply Chain Management (GSCM)’ process

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Since the last decade with increasing pace of change, mostly in the western world has accelerated the globalization process in the Pharmaceutical Industry across the world. The key drivers to these changes are as follows:

1. A large number of patent expiration hugely impacting the top-line growth
2. Research pipeline is drying-up
3. The cost of bringing a new molecule from ‘the mind to market’ has now touched around US $ 1.75 billion
4. Regulatory requirement to get the marketing approval is getting more and more stringent, basically for patients’ safety, making clinical development more expensive and time consuming
5. Cost containment measures of various governments around the world is putting an immense pressure on product price, significantly affecting the profit margin

Changing Business Process:

All these factors are triggering other sets of consequential strategic events of enormous significance. Among those, following key corporate strategic steps indeed stand out:

1. More mergers and acquisitions of various size and scale to achieve both revenue and cost synergy, with new products and newer types of resources

2. Transformation in the fundamental operating models, e.g. R&D focused companies like Pfizer, GSK, sanofi aventis are extending their business interest in the pharmaceutical generics space, as well

3. Increasing globalization process and more focus on the emerging markets of the world like, Brazil, Russia, India, China, Turkey, Mexico

4. Growing emphasis on partnering, as we see in India, like for example, between Pfizer and Aurobindo, Claris and Biocon, GSK with Dr. Reddy’s Lab (DRL), AstraZeneca with Torrent, sanofi aventis with Zydus Cadila etc.

5. Global outsourcing in the ‘Contract Research and Manufacturing Services (CRAMs)’’ space

Increasing importance of GSCM:

In today’s evolving scenario, Global Supply Chain Management (GSCM) process has assumed a key importance. The need to reduce costs significantly and minimize the risks associated with the procurement activities of the business, have compelled many innovator companies to extend the activities of their Supply Chain management process to the Global arena, instead of just confining to the local space.

The changing requirements of all hues and types in various areas of the business, like in sales and marketing, manufacturing, research and development etc., have created a challenging, if not a rather volatile operating environment.

Such an evolving scenario will make the GSCM to increasingly play a key role in the overall business process of an organization to ensure that the right products are available at the right place, at the right time, at a right price and following the right processes…Always.

Emerging GSCM hubs:

There is at the same time, a new trend emerging to provide world class outsourcing services, especially from countries like India and China. These initiatives, which in turn will make these two countries the key global outsourcing hubs, are definitely not due to just cost arbitrage. It encompasses increased integrated value proposition for the overseas customers. Cost is just one of the key factors, others being quality, speed and suppliers’ integrity and reliability. Nothing in this value chain is mutually exclusive. GSCM will need to go through a set of complex algorithms to strike a right balance between all these vital parameters.

Importance of GSCM integrity:

In the days to come by, one of the greatest challenges in GSCM will be to improve the supply chain integrity and security. An appropriate definition of integrity for supply chains could be:

“…the requirement that the system performs its intended function in an unimpaired manner, free from deliberate or inadvertent manipulation.”

A safe and secure supply chain is definitely not a new requirement. However, in the list of priority of importance, it has now come up significantly, compared to what it was just a few years back. Though the issue of improving supply chain integrity and security has now assumed global importance, unfortunately, any uniformity in national regulatory requirements for this vital parameter is glaringly missing. Such a lack of regulatory uniformity clearly highlights that the pharmaceutical companies, engaged in manufacturing, are still not aligned with each other on what will be the right way to ensure absolute integrity, safety and security in the supply chain operating process to guarantee patients’ safety.

Globally, many Pharmaceutical Companies are getting engaged in improving supply chain integrity, security and patients’ safety with the introduction RFID. This, as many may know, is an inventory tracking system for improved product traceability, which in turn extends some protection to its customers with genuine products from the genuine pharmaceutical manufacturers. It is worth noting that RFID is just one component of overall patients’ safety initiative.

Along with high tech measures like RFID, to improve supply chain integrity, I reckon, pharmaceutical companies will need to further enhance their respective ‘supplier qualification process’. The process of supplier audits should include all important and critical areas of manufacturing, testing and quality, related to each individual product.

Stringent supplier qualification standard is of prime importance:

Only a stringent supplier qualification process will be able to guarantee integrity, safety and the quality of outsourced products from the suppliers.

An example of a GSCM related tragedy:

Before I conclude, I would like reinforce my recommendation with the example of the ‘Heparin tragedy’ where the supply chain integrity was violated and seriously challenged thereafter.

In the beginning of 2008, there were media reports on serious adverse drug events, some even fatal, with Heparin, a highly-sulfated glycosaminoglycan of Baxter International. Heparin is widely used as an injectable anticoagulant. Baxter voluntarily recalled almost all their Heparin products in the U.S. Around 80 people died from contaminated Heparin products in the U.S. The US FDA reported that such contaminated Heparin was detected from at least 12 other countries.

A joint investigation conducted by Baxter and the US FDA ascertained that the Heparin used in batches associated with the serious adverse drug events was contaminated with over sulfated chondroitin sulfate (OSCS). It was reported that his Heparin was supplied to Baxter by Scientific Protein Laboratories, Changzhou, China.

The cost of OSCS is just a fraction of the ingredient used in Heparin. Being driven by the criminal profiteering motive the manufacturers in Changzhou, China had reportedly used OSCS for highly-sulfated glycosaminoglycan as the former could not be detected by the pharmacopeia test in use, until 2008. This is because OSCS mimics Heparin in the pharmacopeia test. Post this criminal event, at present, all over the world more specific pharmacopeia test methods have been adopted for Heparin.

Conclusion:

Let us all ensure that such a tragedy does not get repeated in future due to a breach in the supply chain integrity, anywhere in the world…for the patients’ sake.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Create, Deliver and Realize maximum value from a new product launch with an innovative Supply Chain Management system

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Like in many other industries, effective supply-chain management (SCM) in the pharmaceutical industry involves a systematic process, spanning from procurement of raw, packaging and other related materials, converting those materials into finished goods stock keeping units (SKUs), inventory management of both raw and packaging material, as well as finished goods and finally the distribution of these SKUs to wholesalers/ stockists/ distributors, C&F Agents.Now a days, with intense cost containment pressure all around, effective SCM is gaining a critical importance in the overall business process of the pharmaceutical companies. Besides all these, SCM also plays a very important role in maintaining regulatory compliance and help preserving product quality and safety standards.Key deliverables of a good SCM system:

The key deliverables of a good SCM system are to ensure availability to the customers:

Of RIGHT Product
At RIGHT Time
In RIGHT Quantity
At RIGHT Place
At RIGHT Price and
Of RIGHT Quality

However, in this article, I shall not dwell on these well known and basic parameters. Instead I shall deliberate on three other very important aspects of the supply chain management for your consideration:

1. What will a great SCM system mean?
2. What is the emerging role of SCM system in launching a new product
3. Innovation and measuring SCM effectiveness

1. What will a great SCM system mean?

In my opinion this will cover three important points:

- The SCM system should have an excellent feel of demand fluctuations and its robust measurement system.
- The cost of running an efficient SCM system should be kept at its minimum.
- The SCM structure should always be without any organizational flab.

I repeat, to be effective, a good SCM System must always be demand driven. Customer demand must be ascertained and quantified first and only then company specific supply chain requirements to be worked out and not the other way.

Various research studies confirm that there are certain common qualities for the demand-driven companies, namely:

- Reaction time to gauge and respond to the customer needs and demand is very quick
- A robust IT infrastructure is in place to facilitate delivery of the key Supply Chain
deliverables

SCM helps in value creation, value delivery and the value realization process:

As we know that value creation is the first step for a demand driven organization, followed by value delivery and value realization.

Pfizer Inc ranked high towards these efforts with Lipitor. If by any chance Lipitor gets out of stock, doctors usually do not switch over to other statins; the patient may possibly come back to the Pharmacy next day and hope he/she will get Lipitor. Such type of value creation for the product had made Lipitor over US$14 billion brand today despite the presence of other newer statins in the market and a very efficient SCM system of Pfizer Inc.

In an ideal scenario there should be an overlap between product management, demand management and the SCM systems.

Need for interaction between SCM and Product Development/Management Teams:

In my view, some sort of close interaction between the Supply Chain with Product Development and Management teams is very important for any innovative company to succeed in the market place. This I reckon will be unavoidable in not so distant future. Currently there could be some such link, as mentioned above, existing in some organization, but certainly not what it ought to be.

A robust IT system is a major requirement:

A robust IT system is a major requirement for such interaction process between Product Management, Demand Management and the SCM. Those companies, which will be unwilling to invest in a robust and rapidly scalable IT infrastructure that provides process integrity, transaction reliability, data visibility and intelligence for decision making may find it difficult to implement such an important business process.

2. The role of SCM System in launching a New Product:

In the twenty first century, as we all are aware that quality of innovation determines the sharpness of the competitive edge of any company in the marketplace. This aspect of competitiveness will be increasingly more and more important. Unfortunately, despite having this cutting edge many highly innovative companies have been experiencing great problems while launching their innovative new products in the market.

As we have seen from the recent media reports, two examples indeed stand out:

- Delays in the launch of Airbus 380 wiped off five billion euros of the value of its parent
company.
- Another important example was the enormous problem that Sony faced to make adequate
number of Play Station 3 consoles for the holiday season.

These illustrations indicate that conceptualizing, developing and finally launching new products is becoming increasingly more and more difficult. It is now widely believed that the key issue is inadequate understanding of the critical role that the supply chain plays in the innovative process of an organization.

SCM – a key success factor for a new product launch:

In most of the companies, the world over, the marketing team decides on the product launch decisions. Fortunately now we have started understanding though gradually but surely that the success of a new product launch very heavily dependent on effective co-ordination on all aspects of the supply chain from design to sourcing to manufacturing to distribution.

Therefore, in order to succeed with a new product launch, concerned company will need to ensure that Product development, Sales and Marketing, operations planning and supply chain work very closely together as a coherent team. Such co-ordination between these functions is now an absolute imperative. Close co-ordination even within the various activities of SCM systems play a critical role on the quality and nature of an innovative product or services and thereafter for an effective logistic support to the finished new products.

3. Innovation and measuring SCM effectiveness:

Quality of innovative ideas implemented in various levels of the SCM process along with the operational excellence will determine the ultimate effectiveness of a SCM system of a company.

Operational excellence is usually measured through the effectiveness of various parameters set for the same like. These parameters may include order fill rate, cost of the SCM process followed and the speed that it adds right from the material procurement process to the delivery of required SKU’s right up to the retail chemists.

Similarly effectiveness of innovative steps taken in the SCM process is measured by many on parameters like, the return on new product development and the speed of launch.

Conclusion:

To make a new product launch successful, companies will increasingly require to work out not only an effective process for launch, but will also need to ensure that marketing, finance, operations and SCM with innovative steps built into it, work very closely together to help create, deliver and realize both tangible and intangible value of a new product, most effectively, to contribute significantly to the stakeholders’ value.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion

Absence of appropriate and functional ‘Cold Chain’ infrastructure dedicated to pharmaceutical and bio-pharmaceutical products at the Indian airports and seaports – A serious concern

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Drugs are complex entities and many of these are temperature sensitive in nature. This entails them requiring precise and continuous temperature conditions in transit in order to retain their potency and resultant efficacy. Many lifesaving drugs including biotech products and vaccines fall under such category. Any break in the cold chain process for such drugs can lead to immediate denaturing or deterioration in their quality parameters. It is imperative that a careful consideration is given by all concerned including government agencies at the sea port, airports while providing storage space at their warehouses for such drugs.
Current bottlenecks: Currently in India there are bottlenecks at the Airports that include authorities not being able to assure cold room space despite getting advance notices from the companies about the possible unloading of large consignments of temperature sensitive products. Some of the other gaps include improper training and refresher courses for some of the handling staff who handles such products at the Airport. Storage of Pharmaceutical products along with meat and food products is against the GMP norms.

Lack of special temperature control:

Cold Chain Medicines require special temperature controlled Cold storage. There are two commonly recommended temperatures specified on labels on cold chain products:

1. Products requiring temperature between 2 to 8 degree centigrade
2. Products requiring temperature around -10 to -20 degree centigrade

Cold Chain is an uninterrupted series of storage and distribution activities which maintains required temperature range of 2 to 8 degree centigrade or -10 to -20 degree centigrade as per product requirement.

Ensuring the right product quality:

Proper Cold Chain Management of pharmaceuticals will ensure that the right quality of such products is maintained not only during storage but during transportation also to meet right regulatory specifications. There is a greater focus and stringent regulatory guidelines and standards today in the developed markets around the world on strict adherence to right storage and transportation process for cold chain sensitive pharmaceuticals.

It should be kept in mind always that Cold Chain products are mostly sensitive biological substances that can become less effective or lose potency if not properly stored.
Some examples:

Products requiring 2 to 8 degree storage will not be effective if:

i. They are frozen or stored below 2 degree centigrade
ii. Exposed to temperatures above 8 degree centigrade
iii. Exposed to direct sunlight or fluorescent light

The loss of potency is cumulative and irreversible. If products are exposed to conditions outside the established range, the quality may be adversely affected, reducing their assigned shelf life, diminishing their effectiveness or making them ineffective. The exposed product may look the same – the loss of potency may not be visible.

Quality of storage is critical:

Quality of storage and handling of Cold Chain Pharmaceutical products at Airports and Seaports in the course of Export from or Import into India requires special care and attention. Since multiple products are stored and handled at Seaports/ Airports, personnel may not be able to appreciate the special need for Cold Chain Pharmaceuticals Storage & Handling. Thus, there should be Standard Operating Procedures (SOPs) for storage and handling of pharmaceuticals laid down by the Port Management authorities, so that the personnel handling pharmaceuticals strictly adhere to the pre-set norms.

Rapidly growing demand of cold-Chain facilities:

Pharmaceutical Products for which efficient Cold Chain facilities are required are rapidly growing in numbers. In its movement across the supply chain from the manufacturers to the patient, the medicines are handled and stored by various stakeholders like transporters, Airports, Sea ports, Distributors, Stockists, Retailers etc. Since the storage and handling of Cold Chain Pharmaceutical Products are unique, an uninterrupted Cold Chain is to be maintained in the entire supply chain network without any discontinuity, even for a short while, so that medicinal products of high quality reach the patients, always. Thus it is very important for all concerned stakeholders to ensure maintenance of proper Cold Chain facility.

Currently no ‘Pharma Zones’ in India:

At present there are no ‘Pharma Zones’ in India. However, Mumbai International Airport Private Limited (MIAL) has created 4 new cold rooms for pharmaceuticals and Delhi International Airports Limited (DIAL) has reported to have assured that the new Cargo Terminal, which is expected to be commissioned later in the year, will have around 4000 square metres of additional cold room capacity compared to the current cold room capacity of 400 square metres. Similarly, MIAL has agreed for a dedicated Cold Room facility for Pharmaceutical Products in the proposed new set–up.

The serious Concern continues:

Poor cold room storage facility at the country’s major airports and seaports is indeed an ongoing serious concern.

Unfortunately, even today, pharmaceuticals and bio-pharmaceuticals are, by and large, treated like just any other common product at our ports. It is high time, the authorities should note that due to inadequate storage and handling of these lifesaving drugs at ports, high dwell time and dispersed multiple authorities from whom clearances are required, the quality of these products may get adversely affected exposing the user patients at a great risk. The absence of a temperature monitoring mechanism in such facilities adds to the concern.

Recent Plan of “Pharma Zones” in India:

The DCGI has planned a separate dedicated controlled environment – ‘Pharma Zone’, within the cargo premises at Airports and Sea Ports for proper storage of Pharmaceutical products in line with Good Manufacturing Practices and Good Distribution Practices so as to assure the quality, safety and efficacy of Pharma products, which are to be either imported or exported.

Need for outsourcing Cold Chain services:

In the developed markets of the world there are private cold chain storage and third party logistics providers to offer contract logistics and storage services especially to cater to the growing demands Biopharmaceutical segment, which is the fastest growing manufacturing sector within global pharmaceutical industry.

Thus it is expected that spend of the Biopharmaceutical companies towards outsourcing of cold chain facilities will grow by over 10 – 15% for the next three to five years in the developed markets. India being the second largest producers of Biopharmaceuticals after China, similar opportunities exist in the country.

In India some renowned international courier companies like DHL and World Courier have been reported to have developed an efficient cold-chain management process, especially for the pharmaceutical companies to maintain the cold chain in their logistics network.

Conclusion:

An efficient cold chain infrastructure and its efficient management within the country will help immensely to Indian domestic pharmaceutical companies as they are exploring more and more opportunities to export pharmaceuticals in the global market. To achieve this objective modern cold chain warehouses, their efficient management as per regulatory guidelines will play a key role in ensuring right product quality standard.

Over a period of time cold-chain management practices of global standards will be required to achieve this goal. Currently for both import and export of cold-chain sensitive pharmaceuticals, as indicated, before, this area in particular poses to be one of the key challenges encountered by the industry to maintain high product quality during shipment. Individual pharmaceutical companies like Eli Lilly, India have their own vehicles equipped with cold-chain management systems for transportation of their cold chain sensitive products.

Greater initiative by the DCGI in this area in collaboration with the pharmaceutical industry as a whole, sooner, is absolutely essential, for the patients’ sake.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

To avoid “Heparin” like tragedy in future, a robust “supply chain integrity and security” system is of critical importance

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Globally the pharmaceutical industry is going through a metamorphosis. The types of changes that are taking place today globally, perhaps has no precedence..

The key drivers of these changes are mainly the following:

1. A large number of patent expiration hugely impacting the top-line growth
2. Research pipeline is drying-up
3. The cost of bringing a new molecule from the ‘mind to market’ has now touched around U.S$ 1.75 billion
4. Regulatory requirement to get the marketing approval is getting more and more stringent, basically for patients’ safety, making clinical development more expensive and time consuming
5. Cost containment measures of various governments around the world is putting an immense pressure on product price, adversely affecting the profit margin

Strategic measures of enormous significance:

All these are triggering other sets of consequential events of enormous significance. Among those following key corporate strategic measures indeed stand out:

1. More mergers and acquisitions of various sizes and scales to achieve both revenue and cost synergy, with new products and newer types of resources
2. Transformation in the fundamental operating models, e.g. R&D focused companies like Pfizer, GSK, sanofi aventis are extending their business interest to the pharmaceutical generics space
3. Increasing globalization and greater focus on the emerging markets of the world like, Brazil, Russia, India, China, Turkey, Mexico
4. Growing emphasis on partnering, as we see in India, like for example, between Pfizer and Aurobindo, Claris, GSK with Dr. Reddy’s Lab (DRL)
5. Global outsourcing in the ‘Contract Research and Manufacturing Services (CRAMs)’’space, mainly to rationalize costs and deliver the bottom lines, when the top line is under immense pressure.

Demand on all round effectiveness of the “Supply Chain”:
The changing requirements of all types, in sales and marketing, manufacturing and research and development have created a challenging, if not a rather volatile operating environment. In this situation supply chain will increasingly play a key role to ensure that the right product is available at the right place, at the right time, at a right price and following the right process…always.

Outsourcing initiative is not just about cost:
There is at the same time, a new trend emerging for increased outsourcing initiative, especially from countries like India and China. This initiative, which in turn is in the process of making these two countries the key global outsourcing hubs, is definitely not all due to just cost advantages. It encompasses increased integrated value proposition for the customers. Cost is just one of the key factors, others being quality, speed and suppliers’ reliability. Nothing in this value chain is mutually exclusive. Supply Chain will need to go through a set of complex algorithms to strike a right balance between all these vital parameters.

Robust “supply chain integrity and security’ will assume critical importance:
In the days to come by one of the greatest challenges in supply chain management will be to improve the supply chain integrity and security.
An appropriate definition of integrity for supply chains is:

“the requirement that the system performs its intended function in an unimpaired manner, free from deliberate or inadvertent manipulation.”
A safe and secure supply chain is definitely not a new requirement. However, in the list of priority of importance, it has now come up significantly compared to what it was just a few years back.

Are the pharmaceutical companies aligned on this issue?
Though the issue of improving the supply chain integrity and security has now assumed global importance, unfortunately, any uniformity in national regulatory requirements for this vital parameter is glaringly missing. Such a lack of regulatory uniformity clearly highlights that the pharmaceutical companies, engaged in manufacturing, are still not aligned with each other on what will be the right way to ensure absolute integrity, safety and security in the supply chain operating process to guarantee patients’ safety.

RFID is just one component of supply chain integrity:
Globally many Pharmaceutical Companies are getting engaged in improving supply chain integrity, security and patient safety with the introduction RFID. This, as many may know, is an inventory tracking system for improved product traceability, which in turn extends some protection to its customers with genuine products from the genuine pharmaceutical manufacturers. It is worth noting that RFID is just one component of overall patients’ safety initiative.

Suppliers’ qualification process through stringent ‘supplier audit’ is of critical importance:
Along with high tech measures like RFID, to improve supply chain integrity, I reckon, pharmaceutical companies will need to further enhance their respective supplier qualification process.
The process of supplier audits should include all important and critical areas of manufacturing, testing and quality, related to each individual product. Only a stringent supplier qualification process will be able to guarantee integrity, safety and the quality of products from the suppliers.

Heparin tragedy, where the supply chain integrity was grossly violated:
Before I conclude, I would like reinforce my recommendation with the example of Heparin tragedy where the supply chain integrity was violated and seriously challenged thereafter.

In the beginning of 2008, there were media reports on serious adverse drug events, some even fatal, with Heparin, a highly-sulfated glycosaminoglycan of Baxter International. Heparin is widely used as an injectable anticoagulant. Baxter voluntarily recalled almost all their Heparin products in the U.S. Around 80 people died from contaminated Heparin products in the U.S. The US FDA reported that such contaminated Heparin was detected from at least 12 other countries.

A joint investigation conducted by Baxter and the US FDA ascertained that the Heparin used in batches associated with the serious adverse drug events was contaminated with over sulfated chondroitin sulfate (OSCS). It was reported that his Heparin was supplied to Baxter by Scientific Protein Laboratories, Changzhou, China.

The cost of OSCS is just a fraction of the ingredient used in Heparin. Being driven by the criminal profiteering motive the manufacturers in Changzhou, China had reportedly used OSCS for highly-sulfated glycosaminoglycan as the former could not be detected by the pharmacopeia test in use, until 2008. This is because OSCS mimics Heparin in the pharmacopeia test and thus could not be detected in the case in question.
Post this criminal event, at present, all over the world more specific pharmacopeia test methods have been adopted for Heparin.

Conclusion:
Let us all ensure that such a tragedy does not get repeated in future due to a breach in the supply chain integrity, anywhere in the world…for the patients’ sake.
In today’s deliberations I am sure this issue will be touched upon to ponder over the possible implementable steps to address such future threats effectively.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Dire need of quality ‘Cold Chain’ infrastructure for pharmaceuticals in India and its efficient management through Public Private Partnership initiatives.

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Why Cold Chain for pharmaceuticals?Drugs are complex entities and many of these are temperature sensitive in nature. This entails them requiring precise and continuous temperature conditions in transit in order to retain their potency and resultant efficacy.Many life saving drugs including biotech products and vaccines fall under such category. Any break in the cold chain process for such drugs can lead to immediate denaturing or deterioration in their quality parameters. It is imperative that a careful consideration is given by all concerned including government agencies mainly at the seaports and airports while providing storage space at their warehouses for such drugs.

Current bottlenecks and lack of proper cold chain infrastructure:

Currently in India there are bottlenecks at the Airports and Seaports that include authorities not being able to assure cold room space despite getting advance notices from the pharmaceutical companies about the possible unloading of large consignments of temperature sensitive products.

Some of the other gaps include improper training and refresher courses for the handling staff who handle such products at the ports. Storage of Pharmaceutical products along with meat and food products is against the GMP norms.

Cold Chain medicines require different and special temperature control:

Cold Chain Medicines require special temperature controlled Cold storage. There are two commonly recommended temperatures specified on labels of cold chain products:

1. Products requiring temperature between 2 to 8 degree centigrade

2. Products requiring temperature around -10 to -20 degree centigrade

Cold Chain should be an uninterrupted series of storage and distribution activities which will maintain required temperature range of 2 to 8 degree centigrade or -10 to -20 degree centigrade as per products requirements.

Proper Cold Chain Management system is essential to ensure right product quality:

Proper Cold Chain Management of pharmaceuticals will ensure that the right quality of such products is maintained not only during storage but during transportation also to meet regulatory specifications. There is a greater focus and stringent regulatory guidelines/standards are in place today in the developed markets around the world for strict adherence to right storage and transportation process for cold chain sensitive pharmaceuticals.

It should be kept in mind always that Cold Chain products are mostly sensitive biological substances that can become less effective or lose potency if not properly stored.

Some examples:

Products requiring 2 to 8 degree storage will not be effective if:

i. They are frozen or stored below 2 degree centigrade
ii. Exposed to temperatures above 8 degree centigrade
iii. Exposed to direct sunlight or fluorescent light

The loss of potency is cumulative and irreversible. If products are exposed to conditions outside the established range, the quality may be adversely affected, reducing their assigned shelf life, diminishing their effectiveness or making them ineffective. The exposed product may look just as the same – the loss of potency may not be visible.

World class SOPs for Cold Chain storage and handling facilities are essential :

Quality of storage and handling of Cold Chain Pharmaceutical products at Airports and Seaports in the course of export from or import into India requires special care and attention. Since multiple products are stored and handled at Seaports/ Airports, personnel may not be able to appreciate the special need for Cold Chain pharmaceuticals’ storage & handling. Thus, there should be Standard Operating Procedures (SOPs) for storage and handling of pharmaceuticals laid down by the Port Management authorities, so that the personnel handling pharmaceuticals strictly adhere to the pre-set norms.

Pharmaceutical products requiring cold chain facilities are rapidly growing in numbers:

Pharmaceutical Products for which efficient Cold Chain facilities are required are rapidly growing in numbers. In their movement across the supply chain from the manufacturers to the patients, the medicines are handled and stored by various stakeholders like transporters, Airports, Seaports, Distributors, Stockists, Retailers etc. Since the storage and handling of Cold Chain Pharmaceuticals Products are unique, an uninterrupted Cold Chain is to be maintained in the entire supply chain network without any discontinuity, even for a short while. This will ensure that medicinal products of high quality reach the patients, always. it is, therefore, very important for all concerned stakeholders to ensure maintenance of proper Cold Chain facilities.

Government plan of “Pharma Zones” in India:

The Drugs Controller General of India (DCGI) has planned a separate dedicated controlled environment – ‘Pharma Zone’, within the cargo premises at Airports and Seaports for proper storage of Pharmaceutical products in line with Good Manufacturing Practices and Good Distribution Practices so as to assure right quality, safety and efficacy of Pharmaceutical products, which are to be either imported or exported.

Currently no ‘Pharma Zones’ in India:

At present there are no ‘Pharma Zones’ in India. However, Mumbai International Airport Private Limited (MIAL) has created 4 new cold rooms for pharmaceuticals. It has been reported that the new Cargo Terminal of Delhi International Airports Limited (DIAL), which is expected to be commissioned later in the year, will have around 4000 square metres of additional cold room capacity compared to the current cold room capacity of 400 square metres. Similarly, MIAL is also planning for a dedicated Cold Room facility for Pharmaceutical Products in their new set–up.

Need for outsourcing Cold Chain services:

In the developed markets of the world there are private cold chain storage and third party logistics providers to offer contract logistics and storage services especially to cater to the growing demands of the Biopharmaceutical segment, which is now the fastest growing manufacturing sector within global pharmaceutical industry.

It is expected that spend of the Biopharmaceutical companies towards outsourcing of cold chain facilities will grow by over 10% to 15% for the next three to five years in the developed markets. India being the second largest producers of Biopharmaceuticals after China, similar opportunities exist in the country.

In India some renowned international courier companies like DHL and World Courier have been reported to have developed an efficient cold-chain management process, especially for the pharmaceutical companies to properly maintain the cold chain in their logistics network.

Conclusion:

A world class cold chain infrastructure and its efficient management within the country will help immensely to Indian domestic pharmaceutical companies, as well, as they are exploring more and more opportunities to export Biopharmaceuticals in the global market. To achieve this objective modern cold chain warehouses and their efficient management as per regulatory guidelines will play a key role in ensuring right product quality standard that India will export.

Over a period of time cold-chain management practices of global standards will be required to achieve this goal. Currently for both import and export of cold-chain sensitive pharmaceuticals, as indicated above, the available infrastructural facilities pose to be one of the key challenges encountered by the industry to maintain high product quality during shipment and warehousing at the ports. Individual pharmaceutical companies like Eli Lilly, India have their own vehicles equipped with cold-chain management systems for transportation of their cold chain sensitive products.

Greater initiative by the DCGI in particular in this area, in collaboration with the Indian pharmaceutical industry, sooner, is absolutely essential. For the patients’ sake.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.