		Drug and device manufacturers are experiencing unprecedented levels of public criticism and governmental scrutiny, while being asked to provide more affordable healthcare products to an expanding base of insured Americans. And to compound the issues, advancements in technology are enabling change at breakneck speeds. What is your company to do? How can you act and react in a manner that addresses these changes and keeps stakeholders satisfied?

		To begin to address these issues, you have to start with a basic assumption: that change will be continuous and come at an accelerated pace. So to respond, manufacturers need to create supply chain models that can adapt and change at the speed of this change. My contention is that the current environment makes outsourcing relationships for supply chain management more valuable than ever.

		In my opinion, outsourcing is a certainty for small and mid-size manufacturers, and is inevitable for large manufacturers. Why? Because insourced manufacturers can’t flex infrastructure and SG&A (sales, general and administrative) expenses at the speed of the external market. They lack the ability to scale fixed costs and aggregate volume to justify leading-edge technologies to optimize variable costs. Outsourcing and strategic partnering with global distribution and transportation aggregators has moved from optional to imperative to keep up with the pace of change, and those who fail to recognize this will find themselves at risk.

		Now let’s look at the other side of the coin. Logistics providers must fulfill the needs I mentioned. They must have innovation teams to convert their learning into new models, they must be investing in new methods and technologies, and they must be willing to manage the allocation of fixed and variable costs over a broad customer base—allowing manufacturers to buy services at or near the point they receive a demand signal from their end customers and pay the logistics provider for those services at or near the point that they are paid for the product sale. The logistics provider has to be the arbitrator of the asset base&mdash;willing and able to manage the asset risk&mdash;and this is where most logistics providers get uncomfortable. Those with the fortitude to do so will certainly gain a competitive advantage.

		So let’s look at some specific examples as to how we develop these ideal relationships:

		With volume and variation comes experience, and with experience comes the ability to innovate. However, to be successful we must have partners who share with us their business priorities so we can target what areas to innovate. One idea that continues to have innovative value is the multitenant distribution center.

		Let me give you an example of innovation. A major manufacturer decided to investigate outsourcing their distribution operations. Our analysis of their operations revealed poor utilization, allowing us to propose re-engineering their layout and product flows—which resulted in a 40% reduction in warehouse space and a 10% reduction in labor. Additionally, due to high demand for our services in this market, we were able to commit to assuming financial responsibility for the entire facility, targeting new customers for the 40% of space that will be freed up, and allocating back to the manufacturer only those costs they would be consuming.

		Another challenge that manufacturers have is the lack of flexibility to mold their current network to what they want and “buy” what services they need because too often they are being plugged into the logistics provider’s model. While the provider will state the “plugging” is optimal, many times it is not. Providers must be flexible here and allow the manufacturer to exercise their desired level of control, and the provider must tailor a solution that meets the strategic needs of the manufacturer.

		For example, we recently engaged a Canadian company with whom we designed a model to consolidate multiple operations. This change had the potential to have material impact on their employees as some would still work in the facility that we would operate, by encouraging these employees to take an active hand in the building’s amenities, and to maintain the corporate identity they were proud of. While this may seem minor, our flexibility helped build trust in the relationship. They knew that regardless of the issue, we would be open, honest and flexible to change—which is critical in any successful relationship.

		When it comes to meeting ever-changing and increasingly stringent regulatory requirements that are inherent in the healthcare supply chain, it is critical that both parties provide the needed expertise to effectively interpret the regulations and deploy the proper solutions. In support of our clients, GENCO offers a fully validated QMS system, dedicated QMS auditors, and technical system support. We maintain a team of quality management resources to support our industry certifications for ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, TL9000 certification in technology areas and ISO 13485:2003 certification in medical device distribution environments. Our quality team is also responsible for implementing new certifications, such as AS9100 and AS9120.

		Even so, the best relationships leverage the knowledge of both parties, with the manufacturer leading the effort.

		Technology is an area where many manufacturers tie up precious working capital. At a minimum, an effective technology stack includes an integrated enterprise resource planning (ERP) system, and systems for transportation management (TMS), quality (QMS) and warehouse management (WMS), with the latter including a labor management system. It is rare that it makes economic sense for a manufacturer to procure and maintain these systems, and if you do, it is likely you will not fully leverage the cost or functionality that the applications provide. The fixed and semi-variable costs are your drivers here, and a logistics provider or a SaaS model is your best option.

		Recently we have witnessed tier-1 manufacturers considering a move away from insourcing certain IT applications—primarily because they have a need to standardize systems across their network, or must further invest in their current platform. Again, here is where a provider can add value by providing best-in-class technology on a variable cost basis, and the provider is responsible for all maintenance, version upgrades, validation and scaling of the application. GENCO is performing just this service for a med-device manufacturer with a WMS that will plug into a global integration layer model whereby we can add additional distribution nodes anywhere in the world with minimal incremental costs.

	Outsourced logistics services can provide substantial value both in turning fixed costs into variable ones, and in synchronizing sales cycles to improve cash flow. One GENCO client that insources its logistics is making a shift in its strategic product portfolio, causing both excess warehouse capacity and misallocated assets geographically, but also the wrong mix of assets within those facilities. In addition, due to some changes in their corporate tax structure, there are significant tax advantages for them if they can move their primary distribution center to another targeted state. The problem? By working with GENCO’s combination of warehousing demand (in the state where the misallocated assets were) and warehousing capacity (in the state that made better sense for the client), financial and business problems were resolved.

		The collective, myopic view in our industry is that healthcare logistics is about cost control, but I contend it is more about preventing adverse events via an unrelenting focus on quality, executing to disciplined and proven processes, and being constructively paranoid that there are hidden risks in our current models and they must find them before they reveal themselves via an adverse event. As a result of our recent acquisition by FedEx, we are adopting the philosophy and application of quality driven management (QDM). One of its tenets is “Customers Define Quality,” so we work with our clients to proactively identify risk areas and mitigate those risks via accurate assessment and use of scientific methods to develop alternative solutions. At GENCO Healthcare, we remind ourselves every day that “at the end of every transaction is a patient,” and we accept the tremendous responsibility to maintain and improve the integrity of the healthcare supply chain.

		Kevin McPherson is vice president of Healthcare Logistics, for GENCO, a FedEx Company. With more than 30 years of supply chain and logistics experience, he leads the vision for GENCO’s expanding Healthcare Logistics practice.

Articles

Outsourced services can provide significant financial and risk-avoidance benefits

Managing logistics partnerships in uncertain times

		There is a perception that national vaccination programs, or even just individual vaccinations for, say, travelers going abroad, has been motoring along for decades, due to the near-universal acclaim that vaccination has had over the past century in eliminating human scourges like polio and measles. But along the way, it should be noted, a tiny but significant occurrence of adverse reactions had been taking place, leading to the establishment of the National Vaccine Injury Compensation Court (VICP) in 1988 (which has adjudicated a couple thousand claims out of the more than two billion vaccine treatments administered since then; compensation is funded by a surtax on vaccine sales).

		Then came the now-thoroughly discredited study claiming a connection between childhood vaccines and autism, and things haven’t been quite the same since. While that study, originating in the UK in 1998, was partially and then fully retracted, and despite dozens of resulting studies that found no such connection, it led to the growth of an “anti-vaxx” community (

) that fights against requirements for childhood vaccines. And that, in turn, creates turmoil as each of several important, new vaccines enter the market, for both children and adults. Exhibit 1 for this trend is the vaccines for human papilloma virus (HPV), which is linked to cervical cancer, but which has had a bumpy introduction in the healthcare field since Merck brought Gardasil out in 2006.

		Meanwhile, there continues to be a hurry-up-and-wait, start-and-stop process for eradicating infectious diseases throughout the developing world. Endemic diseases such as onchocerciasis (river blindness), preventable by Ivermectin, a drug donated by Merck, are now disappearing in parts of the world. World Health Organization efforts for other diseases continue, aided by private foundations like the Bill and Melinda Gates Foundation and GAVI, the Vaccine Alliance. Nevertheless, the field remains underfunded and underutilized. A recent issue of Science magazine [1] publishing the results of a committee of infectious disease experts, notes that there are at least ten “feasible” diseases that are addressable by current vaccine science, yet remain undeveloped. The most notable of these is Ebola, which caused thousands of deaths in Africa in 2014 and led to a panic reaction in the developed world out of fear of the infection spreading.

		Pharma manufacturers, buffeted by these societal and technical hurdles, had been retreating from the vaccine field in the early years of this century, but lately have been returning as new science leads to promising outcomes. FDA approved Novartis’ Bexsero, a vaccine for a type of meningitis, last year, and Fluad, a seasonal influenza vaccine, also from Novartis.

		Currently, the global market for vaccines is around $33 billion, projected to rise at an 11.8% annual rate to $58 billion in 2019, according to a 2015 report by MarketsandMarkets, a market research firm.

		Sanofi Pasteur MSD sponsored a recent supplement to the J. of Market Access and Health Policy [2] to showcase the overall dynamics of public health and vaccination programs (primarily in Europe), the substantial life-saving benefits, and the economic returns on funding of these programs (downloadable at http://www.jmahp.net/index.php/jmahp). The supplement’s editors, in an article titled “The Economic Value of Vaccination: Why Prevention is Wealth,” recommend three broad-based needs to advance the field:

 Given the undeniable importance of vaccination for public health, there is a need to secure an appropriate level of budget to guarantee populations’ access to vaccination;

 There is a need to communicate clearer and more compelling messages about the value of vaccination to governments and policymakers, as well as healthcare professionals and the lay public;

 There is a need to consider the global economic benefits from vaccination. Economic evaluations should move beyond assessing only the effect of vaccination on health and medical costs at the individual level, and address the broader economic value to society.

		Despite their record of success, “vaccines are often undervalued and/or underused, though for different reasons: Undervalued, paradoxically, in some parts of the world where increased vaccination coverage could provide significant benefit; underused, in other parts of the world where the high standards of health and healthcare seem to be have led to the achieved vaccine-borne benefits being taken for granted, in these societies at risk of complacency,” says Vanessa Rémy, PharmD., MSc., of Sanofi Pasteur MSD (Lyon, France), in the J. of Market Access and Health Policy.

		“We are seeing a generational gap, where people literally just don’t know how catastrophic it can be,” adds Ryan Million, partner at Trinity Partners (Cambridge, MA). “They do not fear diseases they do not know, or appreciate the utility of mass vaccination programs because they have never lived through or witnessed the types of devastation that our recent ancestors have experienced, in terms of regular measles, polio and other outbreaks—but ironically that’s because these are the very diseases that have been prevented or eradicated by proper vaccination.”

		And while much of the debate, such as it is, occurs between the anti-vaxx crowd and public health policymakers, the physician and pediatrician communities could play a stronger role, according to a study on HPV vaccine uptake. A study of 776 US pediatricians and family practitioners, published in October 2015, shows that many are neither communicating about, nor advocating for, the HPV vaccination strongly enough [3]. According to the study authors: “…Recommending HPV vaccine inconsistently, behind schedule, or without urgency...likely contribute to under-immunization among adolescents, and may convey ambivalence to parents.” Because a strong recommendation from physicians is perhaps the greatest factor in parents deciding whether or not to vaccinate their children, doctors who fail to make it a priority are influencing outcomes. The study concludes that “improving the quality of physicians’ recommendations for human papillomavirus (HPV) vaccination is critical to addressing low coverage.”

		To combat these barriers, strong, consistent counseling for parents and students should stress HPV’s direct link to cancer—and put less emphasis on HPV’s sexual-transmission pathway. “I’m not a big fan of the moral part of the argument being overlain on any healthcare improvement that has been scientifically and clinically established,” says Million of Trinity Partners. “HPV causes cervical cancer and if you can prevent that, that’s just a good thing and that’s all there is to it. The best outcome would be to get it automatically, both genders, at a certain age, and take the distracting debate off the table altogether.”

		Despite being a leading consumer of HPV vaccines, the vaccination rate against HPV in the US remains far below recommended levels. For instance, the CDC notes that in the US in 2014, four out of ten adolescent (age 13—17) girls, and six out of ten adolescent boys, had not started the three-dose HPV vaccination series (these rates vary by state).

						Fig. 2. West’s intradermal adapter enables more consistent vaccine administration. Credit: West

		Just as HPV vaccines are proven to prevent the incidence of certain types of cancers, vaccines against hepatitis-B infection and hepatitis-C (which have been available for several decades) also reduce chronic liver disease and liver cancer. Today more than 90% of countries include hepatitis-B vaccination in their childhood immunization program and have shown dramatic reductions in liver cancer [4].

		Shingles is a painful and debilitating disease caused by the varicella-zoster virus (which causes chickenpox); when patients have had chickenpox as a child, the virus remains dormant in the body and can reappear as shingles, as the immune system weakens with age. The blistering rash and post-herpetic neuralgia associated with shingles can lasts for weeks or months, and are often so severe that they require prescription antidepressants, opioids, various analgesics and antiepileptic medicines. In the US alone, more than a million cases of shingle occurs each year, according to FDA.

		The Zostavax vaccine from Merck is currently the only licensed shingles vaccine. It reduces the incidence of shingles by 50—70%, depending on the age of the patient, according to the company. GlaxoSmithKline has developed a newer shingles vaccine, called Shingrix, which was shown to provide 97% protection against shingles in certain patients aged 50 years and older during Phase III trials. GSK intends to submit a regulatory approval for Shingrix in North America, Japan and the EU during the second half of 2016.

		Prevnar 13 from Pfizer is a pneumococcal conjugate vaccine that prevents pneumococcal pneumonia and related meningitis in both children and adults. Pneumococcal meningitis can cause deafness and brain damage, and kills one child in ten who get it, according to the CDC, which notes that since the introduction of the vaccine, severe pneumococcal disease in children has fallen by 88%.

Good growth is occurring in the vaccine business, despite the hurdles of public perceptions and public-health funding shortfalls

Vaccines manufacturers wrestle with public health policy

		Today’s leading scientific and public health organizations—including the American Academy of Pediatrics, the Centers for Disease Control and Prevention, the American Medical Association, the American Academy of Family Physicians, the National Association for Pediatric Nurse Practitioners, the Infectious Diseases Society of America, and many others&mdash;emphatically endorse strict adherence to accepted vaccine schedules, and despite lingering questions some skeptics have about potential side effects, countless scientific studies have been published in peer-reviewed journals to verify the safety of today’s vaccines; many can be accessed at the CDC’s repository of vaccine safety publications [10].

		Some of the most prevalent misconceptions related to vaccines are addressed in Reference [11]. And when it comes to the worn-out claims that vaccines cause autism, a large-scale study involving more than 95,000 children and published in 2015 [12] found no link between having the measles-mumps-rubella (MMR) vaccine and the risk of developing autism. This study joins a long list of others demonstrating no causal link between autism and vaccinations.

		While many in the medical community label today’s anti-vaxx crusaders as “quacktivists” because of their disdain for the established body of medical literature, the impact of their persistent, alarmist messaging about vaccines continues to be felt throughout the healthcare spectrum. As an increasing number of parents in some communities have chosen to opt out of recommended (and in some cases, compulsory) vaccination schedules for their children, this situation has opened the door for a disconcerting number of vaccine-preventable outbreaks and epidemics that have been directly correlated to lowered vaccination rates within the afflicted communities.

		For instance, despite the fact that measles elimination in the US was documented by the CDC in 2000, numerous outbreaks have happened since 2008, including the well-publicized outbreak at the Disneyland theme park in California last year; and within several Amish communities in Ohio in 2014. In 2010, the worst outbreak of whooping cough in 50 years took place in California, with 9,210 cases and 10 deaths.

		Meanwhile, polio, which can be eradicated by mass vaccination programs, is once again on the rise in Pakistan, because the Taliban has banned aid workers from vaccinating children there. More than 100 polio cases have been reported in the country as of mid-November 2015, and an estimated 240,000 children have not been vaccinated.

		“If there is any silver lining to the enormous skirmish of outbreaks of vaccine-preventable diseases that have resulted from falling vaccination rates in some communities, it’s that the situation allows us to really look at the big data around these cluster outbreaks and analyze the risk factors related to how long the outbreak lasted, who was vaccinated and who was not, and more,” says Doyle of Quintiles.

	“These outbreaks provide the best examples of what actually happens when vaccination rates dip,” adds Million of Trinity Partners. “That’s just data with no judgment and no need for interpretation.”

The impact of the anti-vaccination lobby

Kuehne+Nagel’s distribution center in Memphis, TN opened last August. Credit: K+N

		From a general, global perspective, healthcare products will never be a large fraction of shipment tonnages; the healthcare sector will always pale in comparison to automotive, energy or consumer goods movement. But healthcare has two things going for it that draw more than its fair share of attention from logistics providers: growth is strong and steady, and the products tend to call for premium services from freight forwarders, ground, air and ocean carriers. A third factor, at least in the US, is the broadbased trend for more consumer-driven healthcare choices; the best example of this is direct-to-patient delivery, even of complex biologics.

		“It’s amazing how much complexity exists in pharma and healthcare supply chains that wasn’t there a few years ago,” observes John Menna, VP of global strategy, healthcare logistics for UPS. “There’s volume growth, but there’s also the complexity of products being moved and what’s required to move them in a compliant manner. Emerging markets around the world, combined with more offshore manufacturing, are also factors. The record number of M&A undertakings by pharma companies make supply chain managers’ work very challenging. Finally, there’s the drive from insurers and hospital systems to handle more patient care in the home or in outpatient facilities; that adds to the cost pressures on healthcare generally, and to logistics providers specifically.”

		The Big Three wholesalers, AmerisourceBergen, Cardinal Health and McKesson, have a profound influence on product movements within the US, of course, but increasingly now with international transportation. AmerisourceBergen has its pioneering, multiyear arrangement with Walgreens Alliance Boots (which is based in the UK), and acquired a Brazilian distributor; McKesson closed on its acquisition of Celesio, a major European distributor, last year, and Cardinal has a distribution business in China that tripled in size, to $3 billion, since Cardinal acquired it in 2010, according to George Barrett, CEO. In addition, AmerisourceBergen and McKesson have substantial operations in Canada.

		The biggest, multinational logistics firms in healthcare—UPS, FedEx, DHL, with companies like Panalpina and Kuhne+Nagel also in the running, have set up networks of healthcare-specific distribution centers and ancillary facilities around the world, both to match the services called for by the Big Three, and to provide standardized services globally to multinational pharma companies. On national basis, a handful of US third-party logistics providers (3PLs) are storing and moving products for US pharma companies, and for non-US firms, especially generics manufacturers, who want to build their business activity in the US, the world’s largest pharma market. Finally, the carriers themselves&mdash;especially air freight that has time- and temperature-specific shipping conditions&mdash;are building out healthcare-specific resources to serve the pharma industry.

			At presstime, UPS’ 50th dedicated healthcare-distribution facility was scheduled to go online in Roermond, the Netherlands, which is also close to UPS’ European air hub at the Cologne/Bonn airport in Germany. Capacity is 300,000 sq. ft. It also opened a healthcare-dedicated air freight-forwarding facility at Amsterdam Airport Schiphol.

			Life Science Logistics (Dallas, TX) is finishing out a tripling of its cold chain space at its Indianapolis facility, as well as adding new capacity for managing reverse logistics for medical devices and med-surg kits, where instruments need to be sterilized and then repacked. Richard Beeny, CEO, says the company has experienced a quintupling of its healthcare-products volume throughput in the past year.

			MD Logistics, a Plainfield, IN 3PL, doubled the capacity of its Indianapolis facility with a $2.5-million, 173,000-sq.-ft. addition, as well as adding to its Reno, NV facility. Both have expanded cold-chain capacity.

			BDI Pharma, which characterizes itself as a “niche distributor” of specialty blood products, chemotherapeutics and the like, opened a DC in Fort Worth, TX, and has doubled capacity at its Columbia, SC headquarters.

			Also in Texas, Woodfield Distribution has opened a 48,600-sq.-ft. facility in Sugar Land, TX that is equipped to handle warehousing and distribution, cold-chain capability, reverse logistics and regulatory-compliant disposition. Capacity is also increasing at its Boca Raton, FL headquarters. The company has a particular focus on pharma products entering the US from Latin America.

			Last August, Kuehne+Nagel added 125,000 sq. ft. for contract pharma logistics to its Memphis distribution center, which already has more than 200,000 sq. ft. of warehouse capacity, mostly dedicated to life sciences. A 10-year contract with an unspecified client has enabled the company to add additional capacity, for CRT, refrigerated and frozen warehousing. K+N brands its life sciences services as PharmaChain, with 49 healthcare-logistics facilities in 21 countries. “Kuehne+Nagel continues to invest in our KN PharmaChain solutions—our systems, facilities and employees&mdash;in order to guarantee our high service and quality standards for the inventory control and transport of pharmaceutical products,” said John Hextall, president of K+N North America, in a statement.

			Last summer, American Air Cargo opened an ExpediteTC 25,000-sq.-ft. facility in Philadelphia for inbound and outbound shipments of pharma products; it includes refrigerated (2-8°C) and controlled room temperature (CRT, generally 15-25°C) space, and the ability to recharge the air-freight containers offered by CSafe, Envirotainer and others, which use batteries to run self-contained heating and cooling units.

			United Cargo started the new year with the opening of a TempControl facility for healthcare products at Newark Liberty International Airport (Newark, NJ); the CRT space is used for inbound and outbound freight, and for transiting shipments within the United Air Cargo network. The company noted that it now has 56 TempControl facilities (where there are trained personnel in handling healthcare logistics) in its global network, including a just-opened one in Vienna, Austria. The type of dedicated CRT storage space built in Newark is the model for others, likely to be in Chicago and San Francisco, noted Jan Krems, United Cargo president.

			Catalent (Somerset, NJ), which has a substantial business in outsourced drug development, announced a quadrupling of its Shanghai, China facility, with an emphasis on temperature-controlled handling of biologics undergoing clinical trials. Expansion is also in the works for the company in Singapore.

			Marken (Durham, NC), which has been building out its network of clinical trial depots around the world for several years, announced in 2015 that is has new facilities or capacity in Boston, at New York’s JFK Airport and in Russia.

			World Courier, a subsidiary of AmerisourceBergen, opened a service facility, the Climate Optimisation Research & Engineering (CORE) Labs, a testing and development center based near Cologne, Germany. Its focus is providing design and validation services to pharma clients investigating climate-controlled packaging. In early 2015, World Courier added to its Australia depot to enable commercial distribution of specialty drugs, a distribution channel that parent AmerisourceBergen hopes to build on.

			QuickSTAT, a unit of the global express-delivery firm Quick International, is partnered with Almac Group at the latter’s Ireland facility; QuickSTAT opened a dedicated, temperature-controlled packout facility for temperature-controlled shipments for Almac near Belfast International Airport.

UPS’ annual survey found substantial progress in life sciences supply chain development.

		For the eighth consecutive year, UPS Healthcare Logistics commissioned a third-party survey of manufacturers, distributors and healthcare organizations around the world, published as its “(Pain) in the Supply Chain” survey. The 2015 report shows a healthcare industry having success in addressing product security and regulatory compliance, but low progress in planning for natural disasters and other business interruptions. Logistics cost control—a perennial concern for healthcare managers&mdash;has a mixed outlook, with success in controlling some costs but a desire for further economies.

		That’s the quick summary of the survey, which is based on questionnaires and in-depth interviews of supply chain managers of pharma and medical device companies, and healthcare-product suppliers around the world. The survey was performed between April and June by TNS on behalf of Big Brown. Some 55% of respondents said they were successfully addressing product security issues in 2014’s survey; this year, that jumped to 75%. Likewise, 57% were meeting regulatory compliance challenges last year; this year, the figure is 70%. There is some improvement in preventing product damage and spoilage (particularly for temperature-controlled products), with 63% having success now versus 57% in 2014. And while there is a 12-percentage-point rise in respondents’ success in managing logistics, warehousing and transportation costs, the 2015 figure is 50%: half of the industry is where it wants to be, and half is not.

		For those companies that have staked out strong positions in healthcare logistics, the sector’s growth is “a good problem to have:” Respondents noted that “rapid industry growth” is their No. 1 problem, according to 56% of respondents, with the growth causing complexity and cost pressures. In the US, that figure was 59%; in Asia (which, strangely, is the fastest-growing region of the world for healthcare) it was only 35%; and in Latin America, it was the highest of all regions, at 67%, followed closely by Europe at 63%.

		The dominant compliance issue is the EU’s Good Distribution Practices (GDP) guidelines, which went into effect in the overall EU in 2013, but which are implemented in each member country. Two troubling aspects of GDPs are how documentation is to be collected and maintained, and to what extent CRT products (which traditionally, in many cases, have shipped as general freight) are to be regulated. “At the moment, GDP concerns are more prominent in Europe than the US,” says UPS’ Menna. “But it’s still extremely unclear to many customers there, and to us, how those regulations will be interpreted and enforced, on a country-by-country basis. There are lots of gray areas.”

		At last year’s IQPC Cold Chain Forum (Boston, Oct. 5—9), Mary Foster, a member of the executive committee of US Pharmacopeia, announced that that group’s efforts to establish a USP version of GDP standards (as USP <1083>) was essentially being sent back to the drawing board; instead, USP would concentrate on 

providing guidance on packaging and testing for cold chain shipments

. “In our experience, US manufacturers and FDA pay more attention to Good Manufacturing Practices (GMPs) than to GDPs,” notes Life Science Logistics’ Beeny. “FDA audits, which we’ve had numerous times, focus on the documentation and practices of our warehouses; less so on actual transportation practices.” In the final analysis, though, product quality remains the manufacturer’s responsibility, and leading biopharma firms look closely at each step in the distribution process.

		The CRT requirements under GDPs essentially mandate that a product is kept within the temperature range on its label while being transported. One complication, notes Thomas Grubb, who is both manager of cold chain strategy at American Air Cargo, and a member of the Time and Temperature Committee of the International Air Transport Assn., is that some drug labels are “15-25°C,” while others are “5-30°C.” Most carriers have standardized around 15-25°C, but if there were storage or shipping situations using 5-30°C, some 15-25°C products would be out of their label range. “We’re not sure what 5-30°C means, beyond ‘do not freeze, and do not bake,’” he quips.

		To the extent that some manufacturers are enforcing GDP standards, a readymade alternative to insulated packaging is the use of thermal blankets that dramatically slow down the heating or cooling of products they are covering. Some manufacturers are now deploying these blankets as a standard part of packaging; meanwhile, FedEx offers a thermal blanketing service as an adjunct to its temperature-controlled services.

		Meeting import/export requirements are a responsibility for any international shipper, but for overseas companies seeking entrée to the US market, US-based 3PLs offer substantial support services. “Our additional expertise includes the importation and processing of prescription drug products that arrive in bulk form that are packaged within the WDSrx facility according to FDA guidelines,” says Adam Runsdorf, CEO of Woodfield Distribution. “Our reputation for providing 3PL managed services and value-added solutions to the healthcare industry is an important consideration that Latin American-based companies find desirable.”

The rise in product volume is more than matched by the rise of regulatory constraints

Logistics providers confront a complex, global healthcare market

Specifying a suitable container for shipping temperature-controlled life sciences products usually involves matching the design elements of the container (insulation quality, amount of gel refrigerants, etc.) with the trade lane (the transportation route) that the package will follow. Many pharma companies verify this performance by doing field tests (shipping the container along the specified route) and monitoring overall performance. From this comes the traditional practice of specifying “summer” (warm season) and “winter” (cold season) configurations, or, when possible, an “all seasons” configuration.

What follows are some fairly technical approaches to generalizing this design practice. The model we are following is something commonplace to engineers: the “pump curve” that measures how a given pump will perform under varying conditions of flow and pressure. The intent here is to show that some current practices in handling temperature-controlled shipments—such as the temperature at which packages are maintained prior to shipping—need to be examined more closely; and that a “performance curve” for container designs could simplify the design process.

Engineers routinely select equipment such as pumps, valves and agitators. This article expands this routine selection process to passive shippers intended to maintain a specified range of temperatures from the point of origin to the destination. Once the engineer has identified the requirements, the next step is to choose a specific piece of equipment that has the capability to meet these requirements. For any given type of equipment (or passive shipper), there are many vendor possibilities. Furthermore, each vendor will have a wide range of options. In order to make a decision, the engineer will initially use some of the requirements to eliminate many of the potential candidates—for example, material of construction, cost or ease of maintenance. Once the list has been narrowed in this way, the engineer seeks a performance curve for the equipment. For the pump, the vendor presents a performance curve consisting of a graph of pressure developed vs. the flow rate through the pump. An example of such a performance curve is shown in Fig. 1.

Performance curves share a number of common attributes:

(1) The curve plots the equipment capability vs. system requirements. For example, in the case of the pump curve, the system pressure represents the capability, and the requirement is represented by the flow rate.

(2) The performance curve differentiates design space within which the equipment can perform and where the equipment cannot perform. In Fig. 1, region “A” represents the possible ranges in which the pump can satisfy the design requirements, whereas region “B” represents the conditions in which the pump is improperly sized for its intended use.

(3) No engineer will specify equipment without a performance curve. Without a performance curve, the selection process breaks down to an expensive, time-consuming trial-and-error activity. Lack of a performance curve indicates that the vendor may not understand the capability of the equipment well enough for the engineer to use the equipment with confidence.

(4) Vendors have many customers with different demands, and it is prohibitive for the vendor to create individual performance curves for all of these different demands. For the pump example, one customer application might use water and another customer application might use ethylene glycol. These two liquids have different densities and viscosities. It would be impractical for the vendor to have a different performance curve for each density and viscosity that could be used by the customer. Over the years, methods have been developed that effectively normalize the performance curves so that a single curve can be applied in many different applications of the equipment, making the curves applicable over a wide range of demands.

(5) Pumps, valves and agitators are complex pieces of equipment when viewed from the perspective of the physical relationships that are occurring when the equipment is being used. The utility of a performance curve is that the critical relationships within the operating equipment are captured in a single performance curve that can be applied in many seemingly different situations.

Fig. 2. Passive Container Performance Curve

With respect to (passive) shipper selection, the ambient lane temperature profile represents the requirement, demand or thermal challenge that the container must meet, and the expected duration that the container can operate for a given ambient temperature profile represents the capability or performance of the container. The table below summarizes the comparison between a pump performance curve and a container performance curve.

A performance curve for the container moves the container design process closer to the design processes used for other equipment. A container performance curve could be represented generically as shown in Fig. 2. Note that in Fig. 2, the thermal demand measure may be a positive (hot) or negative (cold) ambient condition (this “thermal challenge” metric is defined below, with Fig. 4).

If such a curve were constructed for a given container, it could be used in exactly the same way as performance curves are currently used for other engineered systems. In order to decide if a container is suitable, the customer requests the performance curve from the vendor. Suppose the container is required to maintain 2–8°C for a time TL as shown in Fig. 2. For a particular real ambient temperature profile, the thermal challenge metric is calculated and the point is plotted along a horizontal line through the lifetime value TL. If the point is within the region defined by the curve (A), the container can maintain the product temperature within 2–8°C up to a time TL. However, if the point is outside the performance curve (B), the container cannot maintain the product temperature within 2–8°C up to a time TL. A performance curve that defines shipper capability allows the customer to quickly and easily determine if the container can satisfy the thermal requirements for the bulk of the ambient temperature profiles it is likely to see in real shipments. Given two vendors (one that has a performance curve for its containers and one that does not), a customer would favor using the former rather than the latter—all other things being the same.

Fig. 3. Passive Container Performance Curve

Fig. 4. Passive Container Performance Curve Robustness Results

The above discussion shows that the performance curve approach discussed here satisfies the first three attributes (1) to (3) indicated earlier. It is not obvious, however, that this approach will have attributes (4) and (5). Given that this type of analysis has not been applied to passive containers before, the existence of these attributes must be verified. In order to test if attributes (4) and (5) hold for passive containers, a set of runs were performed using a validated model for a passive container where the ambient temperature was kept at a constant value until the container failed (product temperature went outside 2–8°C). This container is complex because it contains two layers of phase change material (PCM). The inner layer of PCM phase changes at 5°C, and the outer ice layer phase changes close to 0°C. The lifetime of the container was plotted against the (constant) ambient temperature as shown in Fig. 3.

Of course, in real shipments the profiles are not constant. However, if the performance curve is robust, plotting the results for real shipment profiles should follow the same curve. Fig. 4 shows the results when 30 real shipments were simulated in the same model.

The data points follow the curve very closely. Such results show that the performance curve is applicable to a wide range of behavior in the ambient temperature profiles. This means that the container performance curve also has the attributes (4) and (5) discussed earlier for general performance curves. Note that the performance metric used in the performance curve is the mean profile temperature up to the point of failure of the container (between t = 0 and t = container lifetime).

The passive container performance curve shown in Figs. 3 and 4 has a number of very interesting properties that are a direct indication of the complexity of the thermal behavior of the container, and have significant implications for the performance of this type of passive container:

(a) There is a constant ambient temperature that maximizes the lifetime of the container. Even though the desired product temperature is 5°C, the optimal constant ambient temperature is 16°C—very different from 5°C. The constant ambient temperature that maximizes the container lifetime is called the “sweet spot” temperature, denoted TSS.

(b) The reason why TSS is much higher than 5°C is due to the use of the outer ice PCM. This ice provides protection against higher ambient temperatures. If TSS was 5°C, many of the ambient profiles that the container will be exposed to would be above TSS since in real shipments most of the time the ambient temperature is above 5°C. However, given that TSS is actually 16°C, the container will be exposed much more to temperatures below TSS. This means that in the container, the aspect of the design that protects against high temperatures also exposes the container on the cold side. In effect, TSS defines what hot and cold really means from the perspective of the container.

(c) If and when shipping delays are encountered, the forwarder may offer to hold the shipper in a 5°C cold room. The performance curve shows that this will result in lower safe storage duration, as the ice will cool the product below 2°C. It would be much better to hold the shipper as close to its sweet spot temperature as possible to ensure a maximum excursion-free storage time. Unless and until all gels have been exhausted, the remaining energy in the shipper will drive the payload temperature below 2°C. Holding the shipper at the sweet spot is generally the best option. This practice conserves the energy in the shipper and it will then continue to protect the payload for the maximum time after the hold period is over.

(d) The performance curve is highly nonsymmetric around the SST. For example, the container lifetime at 26°C (10°C above TSS) is about 50% greater than the container lifetime at 6°C (10°C below TSS), which is expected from a theoretical perspective. This has a significant implication from a design perspective since it has a major impact on what the optimal TSS should be for a certain set of real ambient shipment profiles. For example, suppose the demand on the hot side is represented as a constant ambient temperature of 29°C and the demand on the cold side is represented as a constant ambient temperature of 3°C. If the performance curve was symmetrical about TSS, it would make sense to design a container with TSS = (3+29)/2 = 16°C. The lack of symmetry, however, means that the optimum value of TSS should be less than 16°C.

(e) Even if the customer only knows the value of TSS and the customer does not know the complete performance curve, it is still possible for the customer to use the theory of the performance curve. The metric can be evaluated for each real ambient profile and ranked based on this metric. With this information, an Operational Qualification (OQ) ambient temperature profile can be chosen so that the metric for the OQ curve shows that the OQ curve is more thermally challenging than the bulk of the real ambient temperature profiles. Since the performance metric is the mean profile temperature from the beginning of the profile to the time the container failed and since without the performance curve it is not known how long it will take for the container to fail, the metric cannot be used directly. In this case, the maximum (or minimum on the cold side) of the metric (from the beginning to the maximum time that the container is required to protect the product) is used to rank the profiles.

Note that the form of the performance curve will change when the container changes from one design to another. It is important to recognize that the curve can be modified by changes which do not change the physical components. The conditioning of the PCMs is a prime example of how the container performance curve is changed simply by changing the initial conditions of the container before the product is loaded and the container is shipped.

The use of performance curves to design passive containers as described above is not perfect, but it is an improvement over current approaches. In particular, if a real ambient profile has a very high temperature spike (or a very low dip), the performance curve may not reflect the impact correctly. However, this situation can be handled by a separate analysis on the location, size and length of temperature spikes (and dips).

Paul Harber is principal at Modality Solutions, LLC. Dr. Bernard McGarvey is Senior Engineering Advisor at Eli Lilly & Co. At Cold Chain Technologies, Geoffrey Kaiser is Director of Engineering & Technical Services, and Shreyas Panse is Thermal Design Engineer.

A 'performance curve' chart for containers could simplify the design process

A new way to look at the performance of passive cold-chain shipping containers

Fig. 1. Quality, time and cost elements of major research approaches.

		Observational research—evaluating outcomes in patients in a naturalistic rather than an experimental setting–has the potential to answer many research questions. But in order to do so effectively, researchers must select “the right research approach for the right question.” Doing so requires thorough evaluation of feasibility of delivery, specialized operational approaches with an understanding of pitfalls to avoid, and an upfront plan to communicate the results to stakeholders for whom the results are relevant.

		The starting point for selecting “right research/right question” is to refine the question into something specific that can be transformed into a viable study. The research question represents the uncertainty that the sponsor wants to resolve by performing the study. Sometimes, the research question is confused with the research interest, which is a broader concept. To refine the research question requires understanding the strategic objectives of any research, and reviewing the current body of literature and any ongoing research to ensure that the question is relevant, specific and novel.

		The right research approach is determined by practical considerations such as time and budget, ethical considerations and the strength of evidence required to meet healthcare stakeholder needs. Various study design options exist, with varying strengths and limitations that can be evaluated against these considerations. For example, a randomized controlled trial (RCT), while providing the highest strength of evidence, might cost too much and take too long. There may be ethical questions concerning randomization. A cross-sectional study conducted in a database might be quick and cheap, but might not provide sufficient certainty of evidence for decision-making. All of these factors should be weighed against each other to determine the right research approach.

		The feasibility of a study is a key ingredient in its ability to generate the right quality evidence in the right time at the right cost. There are several research approaches to choose from (Fig. 1). The quality of data generated via each research approach varies, as does the time and cost to generate that evidence. In general, the time needed to gather data prospectively is longer than approaches using real-world data sources, and the cost of research can vary from less than $100,000 to tens of millions of dollars. RCTs and prospective observational cohort studies provide the most certainty of evidence for decision-makers, but take longest and cost most. In contrast, research using routine data sources—while relatively quick and cost-effective–may not be considered sufficient by some decision-makers.

		The various types of research approaches—such as prospective observational cohort studies and patient registries, chart reviews, database studies, and hybrid designs–have different features, advantages and disadvantages.

	For example, features of prospective observational cohort studies include the fact that they are non-randomized and non-interventional, and they monitor cohorts over time. Patient registries may focus on disease, product or exposure. Advantages include the fact that prospective observational cohort studies and patient registries can:

			Examine longer-term outcomes in populations typically excluded from trials

			Examine risks for uncommon harms & factors that modify risk

			Obtain more representative data on a range of outcomes

			Be more cost-effective than randomized trial designs

			Assess actual use (including off-label) to identify potential new indications.

		Disadvantages of prospective observational cohort studies and patient registries include the fact that they are prone to bias and confounding. Optimal design, conduct and analysis are critical for producing strong evidence.

		Chart reviews and database studies use existing clinical or administrative data present in patient paper charts or electronic databases. Advantages of using existing data sources include the ability to assess benefits and harms across an extremely large population, and the fact that this is a cost- and time-efficient approach compared to prospective, longitudinal research. Disadvantages are:

			Underlying information is not collected in a systematic way

			It is difficult to interpret missing data which may introduce bias

			Non-randomization of patients to treatment introduces the possibility of confounding

			Data abstraction from paper records is resource-intensive

			Complete medical and clinical histories may not be available

			Administrative databases and electronic health records are not uniformly available across all countries

			Privacy issues may create the need to aggregate data.

Fig. 2. Advantages and disadvantages of hybrid designs.

		Hybrid designs can capitalize on the speed, cost-efficiency and strengths of different methods, using a combination of primary and secondary data to shorten time and lower costs (Fig. 2). With this approach, sub-studies—focusing on health economic data or patient reported outcomes–are conducted alongside larger prospective studies, providing added value.

	For all types of study design, strategies to ensure a feasible study include:

 Much of the data cited as difficult to provide to decision-makers around the time of launch can be captured during development, or at least planned for during Phase 3.

Multifunctional collaboration within companies:

 This allows the right scientific, commercial and operational input into study designs.

 This guides research questions, which in turn determine data needs. To gather required data demands an understanding of where these may exist in routine data sources or whether they must be gathered prospectively.

		Importantly, observational research requires a different operational approach from that used in experimental clinical research. It is nonetheless common for companies to use clinical development teams to conduct observational research. Observational research requires specialized people, processes and technology in four major areas:

 should be informed by stakeholder needs in terms of endpoint definition, design and execution.

Data sources, data tools and data elements

 should be selected with the needs of observational approaches in mind. Data need to be available and accessible. For a truly observational study, data should be captured as part of routine care and should not be requested purely for the purpose of the study. If a database is being used, it should be accessible and any necessary permissions obtained for data use. Most technologies for data capture in clinical research were designed with clinical trials in mind. Companies should consider technologies compatible with usual care. Selection of data elements is another area requiring a different approach from that for clinical trials. Potential for confounding and bias—which can invalidate the results of observational studies–must be understood. Failure to capture data elements critical to a full analysis of a study may lead to false conclusions; epidemiologists should be employed to advise teams on the selection of the right data elements.

Site and patient recruitment and retention

 are key areas requiring specialized approaches. For many observational studies, it is important that sites are representative of the target population of sites. The starting point to achieve a representative sample of sites is to understand the target population profile. For example, to understand primary versus secondary care treatment, rural versus urban distribution, and for product registries, prescribing trends. Randomizing a site target list may appear an attractive choice but can lead to an insufficient site list once site interest has been determined. More appropriate is to determine site interest from the universe of sites and to back this list into the ideal site sample. Ensuring a representative sample of patients can also prove challenging when site enrollment may be uneven. Strategies such as patient caps might be employed but should be carefully balanced against time and cost considerations. Recruitment and retention strategies may be employed on observational studies but options are more limited than for clinical trials due to the need to avoid the introduction of bias.

Statistical analysis, interpretation and reporting

 are also important. Specialized methodological approaches are critical to ensure appropriate use of analytical techniques and interpretation of that analysis.

		In practice, observational research requires the full integration of strategy, science and operations throughout the lifecycle of every study. Regulatory and commercial teams are needed to provide global and local insights into evidentiary needs and the tools for evidence dissemination. Epidemiologists and outcomes researchers are involved in writing the study protocol; reviewing data management and biostatistical deliverables; leading site and patient sampling; reviewing data for missing elements, bias and confounding; and interpreting, analyzing and reporting data throughout the study. Epidemiological input is needed to all aspects of operational delivery to minimize bias and confounding. Dedicated observational research operational teams work on specialized observational study delivery processes, and leveraging fit-for-purpose data capture technology ensure high-quality delivery.

Observational Research: Choosing the right research approach for the right question

Constantia Flexibles’ Live Stress Test analyzes the coldforming process for blister packaging.

		Constantia Flexibles (Blythewood, SC), best known for its Coldform foils for blister card packaging, has introduced two services to better analyze the blister card design and manufacturing processes. The Live Stress Check can analyze the performance quality of the packaging process, while a design simulation can point to improvements in the blister card’s overall permeability.

		Generally speaking, blister cards provide convenience and therapy-adherence benefits: a blister card can be arranged for, as an example, daily doses per week. The sealed nature of all blister cards improves shelf life of the contained pills as compared to pill bottles; the flat “real estate” of the card allows for messaging and branding to enhance product value. When producing blister packaging with Constantia Coldform, which has an aluminum film layer with near-zero permeability for water and oxygen, the Stress Check can monitor machinery performance.

		To perform the stress check, a pattern of high-resolution dots is printed on the Coldform laminate that, when stretched, changes. The Live Stress Check sample, with cavities that were formed under production conditions, is inspected with a camera system and software to determine these distortions. Afterwards, an automatically generated 3D-image (see photo below) illustrates the degree of strain at various areas of the blister—valuable information that allows for significant improvements to both the overall process and the cavity-shaping steps in particular.

		A related simulation process addresses another concern: the effect of blister card edges or perforations on “cross permeation”—the intrusion of moisture. Typically, this is addressed by using multilayer films (Constantia can provide films with up to five layers). The company’s simulation technology allows for estimating possible cross-permeation effects, and then the material choices (or placement of perforations and edges) to minimize them. For example, a polypropylene layer could be substituted for more permeation-prone polyvinyl chloride. Carrying out this design process helps ensure overall package quality and speed to market.

Design analysis can dictate blister composition

Digitized stress analysis improves blister performance

Chris Anderson (left), Cardinal Quality Systems Director,

	It’s a truism of large organizations that standardized, “enterprise” solutions are beneficial: less complexity when crossing organizational lines; more consistency in operating performance; and potential cost savings in inventories and equipment through sole-source suppliers. But when it comes to larger pharma companies and distributors handling temperature-controlled products, there are many factors that create obstacles to enterprise standards:

, different cold chain products might exist, and different processes for managing them

 bulk vs. parcel; national vs. international; regional variations due to seasonal (summer/winter) effects. Add to this the variability between intracompany transfers, shipments to large customers, drop shipments to smaller customers, and even the complexity of direct-to-patient deliveries.

The lack of national (or international) service providers

 across the range of services required: ground and air transportation; suppliers of temperature management solutions; the unavailability of competency centers with logistics professionals meeting the evolving Good Distribution Practices (GDP) or FDA requirements.

		The end result, for many larger organizations, is a proliferation of processes, technologies and logistics practices. The needed packaging materials and technical resources might not be available when and where they’re needed. Mistakes happen—something everyone in the pharma supply chain wants to minimize.

		This was the situation confronting Chris Anderson, Director of Quality Systems at Cardinal Health, one of the leading US healthcare products distributors. Over a period now nearly a decade long, he has been instrumental in bringing a new level of performance to Cardinal’s vast and far-flung distribution organization, with distribution centers across the country, upgrading Cardinal’s performance in managing temperature-controlled products (even as the regulatory system for those products has evolved and become more restrictive). With the razor-thin margins that large distributors operate under, changes and upgrades had to meet tough ROI limits. Along the way, a new emphasis appeared on employing high-sustainability business practices—a challenge for distributors who, like Cardinal, are so tied to transportation and packaging practices.

		“It’s funny,” says Anderson, looking back on the years of upgrades. “This started out as almost a test project because I had recently been trained in Six-Sigma quality practices, and was looking for an internal project with which I could earn my Black Belt. But the success of each project generated momentum for the next, bigger project, and with the strong backing of my management, we’ve been able to produce significant savings and quality improvements in our organization.”

		Along the way, a relationship between Cardinal and Sonoco ThermoSafe evolved, from being one of “dozens” of vendors supplying packaging materials, to virtually the sole source provider, enabling Anderson and his team not just to standardize on specific types of packaging (for specific shipping situations) but also to unify packout processes, raise performance, and—most importantly&mdash;create significant savings and reduced spoilage. “Sonoco ThermoSafe has been a good partner, in that they work with us to develop customized solutions to fit our needs,” says Anderson.

		The icing on the cake: many of Sonoco ThermoSafe’s solutions used within the Cardinal supply chain are designed to be reusable, drastically cutting the amount of packaging materials that need to be discarded, and simplifying shipping processes (such as avoiding the use of under-capacity refrigerated trucks in place of full loads of regular trucking). Big wins all around, says Anderson.

		Anderson’s work on standardizing cold chain practices began around 2007, when Cardinal looked to reduce spoilage of shipments to local pharmacies. By standardizing internal processes, the company was able to reduce spoiled product returned to Cardinal by nearly half. Continued development in this area led to employing Sonoco ThermoSafe’s PureTemp® phase change panels, which provide temperature-specific cooling, in the totes with which Cardinal ships products to local pharmacies.

Sonoco ThermoSafe’s PureTemp® panels are a component of shipping totes of cold-chain products to pharmacies.

		Data Anderson collects shows that the PureTemp panels would be cost-effective if they could be reused at least eight times. As of 2015, the PureTemp panels are actually being reused as many as 87 times—a 10X rate above break-even. Spoiled product returns have been cut by 85%&mdash;and this is over a period where the volume of cold chain product grew by 50%, now approaching $21 billion per year.

		Anderson then addressed another problem: bulk shipments from the Cardinal “replenishment center” (where many manufacturers deliver their products) to the forward distribution centers across the country that serve regional deliveries (there are more than 20). “We started, years ago, with employing refrigerated trucks, then looked at using trucks with a moveable bulkhead to separate an ambient-temperature section from a refrigerated section,” says Anderson. “The problem with that is that the bulkhead takes up the space of four pallets, significantly reducing our carrying capacity.” The solution: working with Sonoco ThermoSafe to develop a reusable bulk shipper (now being marketed by Sonoco ThermoSafe as the 884 bulk durable insulated container), featuring a hard-plastic insulated shell, designed shelving for placing refrigerant bottles, and qualified for 72-hour service in a controlled room-temperature trailer and 24-hour service for ambient ground or air transportation.

		Again, reusability was key. Anderson says his team calculated that the bulk containers would need to be capable of 10 reuses to be cost-effective. In fact, the units, in service since 2014, are essentially a permanent capital asset: their reuse has clocked in at 162X—growing week by week. The bulk containers allow Cardinal to deploy its trailers carrying full loads of mixed room-temperature and refrigerated product, providing economics in shipping costs and effective segregation of both room-temperature products (some of which could be damaged by refrigeration) and cold-chain products. Hundreds of these bulk containers are now in use, every week. And when the comparison is made with the previous, single-use gaylord-type shipping containers (with tons of cardboard, wood and foam-plastic insulation)&mdash;the sustainability benefits are massive.Another, unforeseen, benefit came out of the design process. Conventional gaylords with fixed sides can represent a worker-safety issue, because workers can be injured while trying to load the first, or unload the last, product case from them. With the front-opening door on the 884 durable container, these safety risks are eliminated.

		Yet another valuable aspect of the enterprise program has been the ability to conduct container repairs internally—within Cardinal facilities. Breakage during transportation is a reality that all supply chain managers deal with; the value proposition is to minimize repair costs and downtime. Working with Sonoco ThermoSafe technicians for training, Cardinal has been able to carry out repairs (mostly for minor damage) of all units that needed it, and, through September 2015, had a damage rate of 0.0015%&mdash;an astonishing number in the wholesale distribution business.

Enterprise solutions for cold chain management

, we spent a good bit of time from late autumn into the first few weeks of this year preparing our feature article on 

global transportation and logistics for life sciences

. And, based on which articles were ready for publication by the time we closed this issue, it has a preponderance of supply chain-related stories: helpful 

; a technically oriented article on how cold chain packaging (to transport temperature-sensitive biologics and other products) 

		So, lots of supply chain stuff. Relative to what recent media headlines have been about (drug pricing, multibillion-dollar M&A, “moonshots” to cure cancer…) supply chain issues would seem to be a relatively low-level activity in the life sciences industry. Our contention is: that’s a problem.

		Over years of attending industry conferences, on topics ranging from new research to regulatory enforcement of marketing activities, from sales-force automation to contract manufacturing (and so many more), we hear the constant refrain of two things: why can’t the pharma and biotech industry be more like consumer-goods marketing and retailing; and why does drug distribution have to be so complex and (seemingly) costly?

		On the first point, the comparison used to be made with Walmart, back in the day when its tightly interconnected inventory and stocking systems were the marvel of the retailing industry; the received lore was that data on a consumer buying a tube of toothpaste in one store would rocket through the system, resulting in the production of more paste at a distant factory. That system is still in place, but these days people like to talk about the “Amazon effect” on retailing, with e-commerce, and overnight and even immediate delivery of orders. There’s still a lot of time lags in the overall pharma supply chain (various studies in recent years estimate that the time from a raw material creation to a delivered, finished good in life sciences is more than one year); however: there’s a pronounced trend in specialty pharmaceuticals to make personalized dosages of drugs available either on the spot, or within 24 hours; some suppliers are employing storage systems on-site at clinics and even patients’ homes; and a few efforts have been made to mimic the drone-based delivery that Amazon is touting.

		On the second point, of over-complexity, the overall biopharma industry is rapidly being transformed between generics, which are increasingly being handled by multinational wholesale-distribution firms, and specialty products, whose distribution ranges from those same wholesaler-distributors to a variety of direct-to-patient channels. (Generic usage represents roughly 90% of all prescriptions; but branded pharma products represent more than 80% of the revenue of the industry.) Generics distribution is becoming radically simplified (the most telling example of this I can think of is an effort to provide prescriptions via ATM-like machines, with products popping out like so many candy bars or cans of soda). Mail-order delivery and the tens of thousands of brick-and-mortar pharmacies add to the convenience, speed and efficiency of delivery.

		In the specialty arena, however, in addition to the complexity of such drugs as infusions, with dosages tailored to the individual patient’s physiology, far-sighted planners are preparing for how the very latest immunotherapies, based in part of patient’s own cells or genetic profile, will be delivered. Some of this is going on already with stem cell-based therapies; more is coming. These “supply chains” (if the term is even appropriate) will be even more complex that what is occurring today. A near-exact parallel to the commercial distribution of specialty drugs is occurring in the clinical trials world, with similar drivers for personalization and patient-centered treatment.

	So, on the one hand, the industry has modernized its supply chain practices, and is a lot more efficient than it used to be, or more than most people realize. On the other hand, the therapies in laboratories today will eventually enter the marketplace and represent a new set of challenges. Service providers to the industry are responding, but there’s a lot more work to be done. These supply chain issues have a direct influence on many other parts of the industry: market access, reimbursement, regulatory compliance, clinical trials development and practice, and data collection and analysis. 

 will be covering these topics closely in future issues.

Looking at the essential value of well-managed supply chains

Pharma logistics--so what?

		Early-January information posted at FDA’s OPDP shows that only nine actions (warning letters or “untitled” letters indicating a violation) were issued in 2015 and, based on data compiled by the Regulatory Affairs Professionals Society,* that’s a record low number. OPDP actions have been declining since 2010, when they hit 51, and, dating back to the late 1990s, more than 100 such letters were being issued annually.

		OPDP (formerly known as DDMAC, the Div. of Drug Marketing Advertising and Communications) reviews promotional materials and labels for marketed products “to ensure clear and unambiguous communication of the laws and regulations relating to prescription drug promotion,” according to OPDP descriptions. Particular enforcement bugaboos have been missing information on product risks, or making unsubstantiated claims about the product. OPDP’s charter has changed over the years; at present, it’s still trying to provide definitive guidance for online promotion, something that had much of the industry and its advertising agencies on their toes in the early 2010s. But the data might simply indicate that advertisers are much smarter about following existing guidance on promotion.

http://www.raps.org/Regulatory-Focus/News/2016/01/19/23927/FDA-Promotional--Enforcement-Actions-Hit-Record-Low-in-2015

Office of Prescription Drug Promotion finds little to complain about

Industry hit a record low number of FDA OPDP actions in 2015

		Recently, “collaboration” has become a buzzword across the pharmaceutical sector, and certainly within HDMA, as distributors, manufacturers, dispensers and regulators have worked together to ensure that the supply chain operates safely and efficiently to the ultimate benefit of the millions of patients it serves. Collaboration has been most evident in the way the supply chain has tackled two of our industry’s toughest issues—traceability and prescription drug abuse.

		Upon passage of the Drug Supply Chain Security Act (DSCSA) in 2013, many industry observers concluded that the groundbreaking legislation would truly transform the pharmaceutical supply chain. Two years later, those observations have been met and exceeded. Transformation has occurred not only in the way information is shared between trading partners, but in the way we collaborate across the supply chain, within our individual organizations, and, importantly with FDA and state regulators, to overcome complex and challenging implementation hurdles.

		HDMA has served as a forum—through our working groups, annual Traceability Seminar and other educational offerings&mdash;for healthcare supply chain leaders to discuss new uses for technology and compliance questions as they work through the DSCSA implementation requirements. While we have had successes&mdash;the first milestone to receive transactional information was met in 2015&mdash;the work is far from done. A common refrain at our seminar last year (our largest yet) was to “keep the momentum going.” Accordingly, 2016 will find HDMA and its members focusing on future milestones as the supply chain aims for the 2023 finish line.

		For example, beginning in 2019 distributors will have additional requirements when dealing with saleable returns as part of the transition to using the unique product identifier for eventual unit-level traceability. To better understand the impact of deadline, and how the industry can work together to best meet these requirements, this year HDMA, working with EY, is sponsoring a pilot study for distributors and manufacturers to examine different methods of verifying product identifiers. This pilot will help trading partners gain first-hand, real-world experience with the processes and technologies required to effectively manage saleable returns from the dispenser to the distributor, and coordinate mandatory verification of product identifiers with the manufacturer.

		By the end, participants will better understand how processes and technology can be used to efficiently and effectively implement this requirement, as well as the potential impact of associated costs—on logistics, operations and on their businesses as a whole. The results of this pilot will be shared with organizations across the supply chain.

		Further, HDMA is helping its members prepare for future DSCSA requirements by once again providing education through our Distribution Management Conference in March, and later, at the Traceability Seminar in November.

		Additionally, HDMA is taking steps to understand the benefits of implementing traceability systems, among other issues, as the supply chain takes on an increasingly global perspective. In the last few years, the association has allied with our counterparts from around the globe to learn about common challenges and opportunities. In November 2015, HDMA hosted, with the International Federation of Pharmaceutical Wholesalers (IFPW) and the European Healthcare Distribution Association (GIRP), the second annual International Pharmaceutical Distribution Conference in Brussels, Belgium, which featured a robust discussion that compared the traceability implementation processes of Europe and the US. We look forward to continuing this conversation on September 12—13 when the association will host its next conference in London, England.

		HDMA’s commitment to a safe and secure supply chain extends beyond implementation of the DSCSA, most notably, to prescription drug abuse, where the association is continuing its collaborative efforts to help mitigate this public health challenge in the US.

		A bipartisan proposal in Congress—The Ensuring Patient Access and Effective Drug Enforcement Act of 2015, sponsored in the House by Reps. Marino (R-PA), Blackburn (R-TN), Welch (D-VT) and Chu (D-CA) and by Sens. Hatch (R-UT) and Whitehouse (D-RI) in the Senate, is one workable solution that is gaining traction. The legislation is widely supported by healthcare industry organizations and nearly 30 patient and provider groups, as it promotes better collaboration and transparency between pharmaceutical supply chain stakeholders and enforcement agencies to help effectively address this problem.

		HDMA also stands ready to partner with regulators, such as the Drug Enforcement Administration, which has showed increased willingness to work with the industry to tackle this issue. While HDMA still calls upon the agency to provide greater clarity to registrants, the association is greatly encouraged by the agency’s more collaborative stance. Beyond the DEA, HDMA will stand with such national organizations as The Alliance to Prevent the Abuse of Medicines, the Community Anti-Drug Coalitions of America and The Partnership for Drug-Free Kids, to help reduce this problem.

		Given these priorities, and the many others that may unfold, in 2016 and the years to follow, HDMA and its distributor members will continue to be critical and collaborative with supply chain partners in ensuring the continued safe flow of pharmaceuticals every step of the way.

John M. Gray is president and CEO of the Healthcare Distribution Management Association, Arlington, VA.

HDMA seeks to encourage more outreach to business partners and government

Pharmaceutical Commerce - January/February 2016

Managing logistics partnerships in uncertain times

Vaccines manufacturers wrestle with public health policy

The impact of the anti-vaccination lobby

Logistics providers confront a complex, global healthcare market

A new way to look at the performance of passive cold-chain shipping containers

Observational Research: Choosing the right research approach for the right question

Digitized stress analysis improves blister performance

Enterprise solutions for cold chain management

Pharma logistics--so what?

Industry hit a record low number of FDA OPDP actions in 2015

Collaboration key to a healthy supply chain in 2016

Pharma's bread and butter is still made with powder

A Conversation with Bill Roth, Blue Fin Group

Annual EY Firepower report finds a 'feverish' environment for M&A

Problems continue with FDA postmarketing review processes

New life sciences capital-construction projects totaled $15 billion in 2015

New year, new names for BIO and Canada's pharma trade association, and more

Full-line distributor sales reached $350 billion in 2013, representing 91% of pharma sales

Mind your "Q"s: QPharma acquires Qforma

FDA approved 45 new drugs in 2015--a new recent record

Eagle Pharmaceuticals gets a 505(b)(2) approval for docetaxel