TABLE OF CONTENTS Jan 2014 - 0 comments

The push is on

Regulation, security, traceability key drivers for pharma logistics players

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By: Julia Kuzeljevich
2014-01-01

In the world of pharmaceutical logistics, security and traceability have become paramount.

Monitoring technologies and environmental condition monitoring have started to merge, allowing for the monitoring of temperature and light conditions, for locating the shipment at the time of any excursion, and all done in real time.

In the past, tracking technology allowed for visibility into the shipment but you had to wait until arrival at your facility to download the environmental conditions and then backtrack to see where and when the problem may have occurred. The result is that today, you can monitor if an excursion is happening and depending upon your communications and contact with the carrier fix the problem before it can harm your products in route, noted Brad Elrod, Director, Global Conveyance Security, Pfizer Global Logistics Compliance, and a speaker at the recent IDGA’s (Institute for Defense and Government Advancement’s) 2nd Annual Cargo Security Summit.

FedEx, which recently won the Best Supply Chain Integrity Innovator of the Year at the 2013 Cool Chain Excellence Awards, launched its SenseAware solution in 2009 in the US and has since expanded into a number of international markets with the service, which provides near real-time access to a package’s vital statistics within the in-transit supply chain or stationary inventory monitoring.

Along with increased monitoring, the pharma logistics industry is also seeing a push toward stricter regulations along the chain.

According to Health Canada spokesperson Blossom Leung, Health Canada has commenced revisions to version 2 of GUI-0069, (Guidelines for Temperature Control of Drug Products during Storage and Transportation), or “Guide 69” in industry parlance. 

“Given the recent release of updated international standards (European) and internal discussions regarding evolving temperature control practices within the pharmaceutical industry, Health Canada anticipates releasing this revised version of Guide-0069 for public consultation in late Fall of 2014.  The timing of this revision and recent change in international standards make for an excellent opportunity to further align with international regulatory partners,” Leung told Canadian Shipper. Health Canada has taken an additional measure to strengthen the supply chain as part of its recent implementation of regulations respecting good manufacturing practices for active ingredients.

“Every fabricator, packager/labeller, distributor, wholesaler and importer of an active ingredient, will be required to include, on the container label or on other documentation accompanying the drug, directly following the information provided by any previous party (a) the regulated party’s name, contact details, and Establishment Licence number, if applicable; (b) whether it has fabricated, packaged/labelled, distributed, wholesaled or imported the drug; (c) the date of that activity; (d) the expiration or re-test date of the drug; and (e) the lot number of the drug.  This record-keeping amendment fostering the traceability of active ingredients will help to protect the health and safety of Canadians in several ways. It will allow for more rapid and targeted investigation and recall of problematic active ingredients. It will also make the introduction of illegitimate, substandard active ingredients into the supply chain more difficult as verification of an active ingredient’s provenance will be simplified,” Leung said.

In the fall of 2013, USCongress and President Barack Obama passed and signed the Drug Quality and Security Act, Public Law 113-54.The new law contains important provisions for tracing pharmaceuticals in the supply chain.

The new law “creates a uniform, national licensing standard for wholesale distributors and third-party logistics providers to safeguard the pharmaceutical distribution system. It replaces the fragmented and piecemeal system that differed from state-to-state.” 

The International Warehouse Logistics Association (IWLA) applauded the legislation which caps a nearly three-year effort “that has multi-faceted impacts on the third-party logistics industry”, the association said.

“When dealing with supply chain security and safety, the influence stems from being recognized as an equal partner to the pharmaceutical manufacturers, primary and secondary wholesalers and distributors and pharmacies. By working with everyone in the sector, supporting both needs, we become stronger,” says Pat O’Connor, IWLA’s Washington representative.

The traceability system is based on an ownership model whereby transaction information is provided upon a change of ownership rather than a change of possession. The traceability obligations require businesses to provide transaction information, history and statements, to each subsequent owner, and keep transaction information for six consecutive years following the transfer.

“This is the first federal statute to contain a strong definition of a 3PL’s place in the supply chain,” O’Connor said. “The impact is now we can point to this law on other issues affecting 3PLs.”

The Act also sets uniform national licensing standards for warehouse-based 3PLs, noted IWLA.

While security and traceability measures are ramping up overall, client-specific requirements also drive the targeted solutions providers such as DB Schenker offer in their range of services.

Scott Barker, key account manager and expert in pharma logistics with DB Schenker, said security measures in pharma logistics tend to be client-specific.

“Each client has different security measures. Some have gone to total dedicated units from the factory to the airline to us. In some cases we’ve had security actually follow the units. This depends on the dollar value and on the drop locations, and is a huge factor in every pharmaceutical company you’re dealing with, especially if it’s a front line pharmaceutical product,” said Barker.

“In many countries pharmaceutical companies are consolidating distribution. India is a fun market to deal with as there is not as much direct lift coming into North America. Cargoes are often routed over London Heathrow, or Belgium,” noted Barker.

In some cases issues with handoffs or monitoring in the air cargo mode has led the air cargo industry to push IATA to increase its efforts to make air cargo more reliable, because of lack of SOPs in place throughout the system.

“It’s a tough problem for IATA because (in some parts of the world) there is a lack of direct lift and facilities. In many cases there are not enough facilities to handle the product. Some airlines will have chill facilities, some will not. Generally in North America the situation is not that difficult because if cargo has to lay over there are secure and chilled areas.

I’m finding more and more companies are looking at marine, trying to get bigger volumes, looking at reefers. But generally it comes down to production and need. A lot of this product needs to fly because it’s needed in the market. You can’t wait for 15-18 tonnes to be put in a reefer box. They have to get the product ramped up and marine will become more important,” said Barker.

He noted there is still work to be done with IATA and the airlines on sign-offs.

“We’re asking carriers to come to the facilities and watch products being loaded into Envirotainers so they can do a proper sign-off. Some of the larger carriers will actually come to the facility to do so. About 20 % are our own and the balance are the airlines’ containers.

DB Schenker is also an agent for Envirotainer so that’s actually a selling tool,” said Barker.

Other trends involve the use of thermal blankets which are still a big factor on geriatric type products, where you don’t need to have temperature and security seems to be the biggest factor.

“How we are protecting their product and what are the costs involved?

That’s really the focus right at the moment, especially in Canada,” he said.

UPS’ 2013 Pain in the (Supply) Chain survey, an annual survey of global healthcare executives in the pharma, biotech and medical device industries, found that the top supply chain, business concerns and investment plans for these industries centered around regulatory compliance, product security and cost management. Other topics included challenges and strategies around product protection, global expansion and technology, as well as impacts of the recent economic downturn and evolving legislation around the world.

Robin Hooker, Director of Global strategy, with UPS Healthcare Logistics, told Canadian Shipper that the survey’s findings also delved deeper into the successful strategies partner clients were employing to make a more effective health care supply chain, as well as their top “pain points.”

“What we’re seeing in the marketplace is that some of the standard solutions are not enough. In Europe we’re experiencing new guidelines with GDP that are quite stringent, and we’re at the table with top pharma there,” said Hooker.

UPS maintains an active regulatory “arm” of compliance experts to address issues in these areas.

“We need to push for strong standards that are accepted universally, and that raise the bar across countries. Looking at the survey, regulatory issues maintain the position as the number one concern, and the top concern from a global perspective.

Having standards out there will enable manufacturers to access more global markets,” said Hooker.

UPS Supply Chain Solutions celebrated the opening in December of a dedicated pharma facility at its Burlington, Ontario campus, as well as a five year renewed commitment to a partnership with Amgen Canada, in place for 15 years already.

“Drug manufacturers face distribution issues such as contamination, shortages, and counterfeiting that can compromise product quality. Biologics are much more complex to manufacture, and they have the ability to change lives, so it’s critical that we can serve every patient every time. UPS is a company that upholds the same standards for regulatory compliance as we do and we are proud to be aligned with them,” said Ralph Mueller, Director of Supply Chain for Amgen, which handles orders in the area of 20,000 shipments per year.

Amgen is an anchor client in UPS’s multi-client cooler facility, said J. Kevin McConnell, Vice President, Canada Distribution, UPS Supply Chain Solutions.

With tremendous growth in healthcare products, said McConnell, the strategy for the Burlington campus’ cooler facility saw the company “build ahead”, anticipating growth around the clients’ world projections.

The new facility is temperature-monitored and boasts strong perimeter security, full fencing and redundant security features built in.

The small package Proactive Response solution developed by UPS creates a collaborative action plan for clients in the event of a disruption of service.

“If there are deviations from key checkpoints there are intervention checkpoints where we can pull the package off the vehicle, re-ice, add de-ice, courier outside the standard network if necessary. We’ve also added a financial instrument: UPS proactive response secure insurance, up to the retail value of the commodity being shipped. We’re getting a lot of uptick in terms of the interest in the product.

It was launched in July and is unique in the marketplace. No other competitor is blending the enhanced visibility with an answer related to the insurance side,” said Hooker.

Accessing multi client distribution facilities will be one of top strategies going forward, noted Hooker.

“Multi-client facilities enable a nimble core concept profile. They allow supply chain leaders to handle regulatory compliance, inventory distribution in their home countries and targeted economies, using an approach that emphasizes agility, and that maintains strong brand recognition,” he said.

The overarching themes out of the ‘Pain in the Supply Chain survey’ are that partnerships are being leveraged for cost management, and for accessing global markets.

“Right now there is a lot of pressure and a need to transform in the industry. We don’t want to underplay the fact that the status quo cannot be the operating mode.

Clients need to access new markets but in a way that keeps them nimble and cost effective. They need to maintain compliance and step up to new guidelines. The solutions we’re seeing do center around partnership models-not necessarily at the large multinational level but even at the small biopharma levels that are experiencing rapid growth,” said Hooker.



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