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Pharmaceutical Commerce - June 2021 Issue (PDF)

With the worst of the Covid-19 pandemic behind us in the US, as more Americans get vaccinated, mask and social-distancing measures are lifted and the public settles back into relatively normal life and work routines—contrasted with the devastation still unfolding in India as it deals with Covid’s second surge—there may not be a better time than the present to explore the theme of supply chain disruption in the pharma industry. 

. If not to learn about the hard but valuable lessons manufacturers and their suppliers gained while navigating the pandemic, and 

new strategies in digitalization and risk monitoring

 employed as a result, then to hear insights on how the global community can best 

 in areas such as drug serialization and track and trace.

And, as we examine this month as well, advances in those fields and the larger pharma distribution picture will go only as far as compliance to and understanding of changes in supply chain regulations. Take, for example, the Drug Supply Chain Security Act (DSCSA), originally passed in 2013. As we report 

 in news on recent FDA-issued guidances, the agency has delayed enforcements of several new DSCSA mandates until 2023. One of those is the requirement of pharma products to be serialized and labeled to support an interoperable, electronic system for identifying and tracing medicines throughout their journey in the US. 

This kind of standardized system, the thought is, will enable better data sharing and thus improve supply chain efficiencies and patient safety. As our coverage illustrates, the industry is making progress in achieving full DSCSA implementation—on the 

The takeaway message is clear: the need for transparency and visibility across the supply chain is critical. That’s what these regulations are trying to ensure. And that’s the focus of optimization pursuits on the industry side. The end goal is the same—getting medicines safely to patients uninterrupted. Thank you for reading.

— Mike Hennessy Sr. is the founder and chairman of MJH Life Sciences.

Taking stock of lessons learned during pandemic—and opportunities to grow stronger

Building a better supply chain

For stakeholders in the biopharmaceutical and life sciences industries, potential sources of supply chain disruption bring many sleepless nights. As today’s supply chains have become more global and interconnected than ever, the likelihood of being hit by the proverbial “fast ball flying out of left field” is more the rule than the exception.

“Despite pervasive volatility, all supply chain issues can be improved with access to better data and data-driven insights,” says Scott Deakins, chief operating officer of Deacom, a manufacturer of enterprise resource planning (ERP) software. “It’s not only about having your own business data at your fingertips (related to managing inventory, manufacturing, accounting, sales, purchasing, customer relations, warehouse operations and more), it’s about investing in the tools and techniques to enable enhanced visibility into timely data from all of your suppliers (and their key suppliers), as well.”

“Historically, supply chains have been supported by large scale warehouse- and transportation-management systems and enterprise resource planning (ERP) systems that largely manage operations and transactions, but naturally, this has led to the emergence of many disjointed silos,” adds Mahesh Veerina, CEO of Cloudleaf, a cloud computing and SaaS company. In addition, the use of automation does not guarantee interconnectivity. Today, roughly a dozen different ERP systems are used by companies across the Fortune 500, according to McKinsey & Company.

“Enterprise systems were never built to use the types of contextual data that are available today from crowdsourcing efforts, insights into real-time accidents and more, so making the realization that such new sources of data could advance the objectives was a real ‘aha moment,’” notes Veerina, adding: “Today, the ability to incorporate affordable sensors and widespread mobile connectivity and cloud computing— can turn inherently ‘dumb’ products (such as packaging and shipping containers) into inherently smart products that can gather and incorporate real-time contextual data and flow it through a digital visibility platform. This enables actionable insights to reach all parties in real time.”

The list of global threats that endanger the pharma drug supply chain by creating pinch points and outright stoppages keeps growing:

The fallout from the swift, worldwide spread of the Covid-19 virus has highlighted many critical points of weakness—from unanticipated shipping delays to lockdowns to closed borders and critical labor shortages. Also the logistical and technical challenges of ramping up the cold-chain shipping infrastructure to deliver never-before-seen volumes of the temperature-sensitive Covid vaccine all over the world in a very short period of time (read more 

The pace and severity of catastrophic weather events continues to rise due to climate change. When Hurricane Maria—a once-in-a-century storm—hit Puerto Rico in 2017, it damaged more than 80 manufacturing facilities producing pharma active pharmaceutical ingredients (APIs) and finished products and medical devices, and wiped out power to the island for months. This Category 4 weather event touched off a wave of shortages throughout the world. More recently, back-to-back typhoons in Asia caused local and global supply chain disruptions related to APIs and excipients, while blizzard conditions in the Northeastern US in February created delivery interruptions during an intense early phase of the Covid-19 vaccine rollout.

Production problems and regulatory issues.

 Quality problems at the Baltimore, MD, manufacturing site of Emergent BioSolutions this spring severely interrupted the availability of Johnson & Johnson’s new Covid-19 vaccine, slowing down the vaccine rollout at a critical time, and impacting patients directly.

 When the Ever Given, one of the world’s largest cargo ships (1,312 feet long) ran aground and became wedged in Egypt’s Suez Canal, it blocked that busy global waterway for more than a week. According to Lloyd’s List Intelligence

, 372 vessels were stalled, and the ripple effect was literally felt all over the globe.

Trade wars, tariffs, localized government sanctions, economic volatility and geopolitical strife.

 The potential fallout of geopolitical events may be more predictable than some other factors but they can also interrupt access to key suppliers in a given region, creating a domino effect that impacts downstream supply chain partners, consumers and patients all over the world.

Cybersecurity threats, phishing threats and ransomware attacks. 

The recent ransomware attack on Colonial Pipeline in March caused outages along a major US pipeline system—one that carries 2.5 million barrels per day of gasoline, diesel and jet fuel, including 45% of the East Coast supply. Industry observers agree that most companies are woefully unprepared to safeguard themselves against such risks.

Transportation and logistics interruptions.

 Disruptions can arise suddenly in any of the truck, ship or air cargo channels from weather incidents, supply-and-demand imbalance or technology issues (for instance, when shipping temperature-sensitive biologics, vaccines or cell and gene therapies), creating shortages of raw materials and finished pharma products.

Manufacturer consolidation, labor shortages and strikes.

 Organizations everywhere are vulnerable when their suppliers experience such labor-related issues, which can halt production of both raw materials and finished products.

“Looking back on the past year, I think we can all reflect on the lessons learned and realize there is no easy fix here,” says Chris Alverson, senior vice president, supply chain management for McKesson US pharmaceutical. “Pharmaceutical manufacturers and distributors are coming to terms with the magnitude and severity of supply disruptions and constraints. No single supply chain management strategy solves this issue—you need to be considering them all.”

Today, there is growing consensus that greater reliance on a more robust digital infrastructure—which is possible thanks to the more pervasive use of relatively inexpensive sensors for improved connectivity up and down the supply chain—is essential, as a hedge against supply chain disruptions. Increased visibility across supply chain channels can provide swift, actionable insights that can help stakeholders to both pivot proactively in the face of an impending issue, and to react more quickly when interruptions do occur.

 magazine reported that 94% of the Fortune 1000 had experienced supply chain disruptions related specifically to Covid-19, and 75% reported negative or strongly negative impacts to their business.

“These numbers are certainly a testament to the scale of the pandemic, but they are also evidence that the power of technology to transform supply chain relationships and partnerships wasn’t being truly maximized,” says Anne Marie O’Halloran, managing director, global supply chain/IX.0 life sciences for Accenture.

“Increased visibility along the supply chain is centered around two key questions: Who are my suppliers at each tier, and what is happening right now at each of those suppliers?” says Harald Nitschinger, co-founder of Prewave, who notes that supply chain mapping solutions can help by uncovering potential issues that are impacting each of the partners throughout the supply chain.

Ideally, organizations need access to a unified view of demand and should use real-time mapping across the entire supply chain—looking beyond just tier 1, 2 and 3 suppliers to their partners, as well.

“The ability to automate the use of data and analytics to support smarter planning and execution and aggregating this functionality onto a digital platform built on a cloud-based infrastructure that is overlayed with analytics and artificial intelligence (AI) capabilities gives companies better ability to support real-time decision-making,” says O’Halloran of Accenture.

In general, considerable focus in healthcare and pharma has been on making sure all of the purpose-built, internal systems are working—for instance, systems used to manage purchasing, manufacturing, warehouse inventory, shipping, customer service and more. “But given the many silos that typically exist, and the variability of the data coming from internal systems, logistics providers, supply chain partners and contract research organizations (CROs)—with each supplying the data in a different format—it can be extremely challenging to combine them all in a meaningful way,” says Anshul Agarwal, partner, ZS Associates. “While such systems give organizations good visibility into specific parts of the overall operation, the ability to achieve truly seamless end-to-end visibility, from multiple upstream suppliers all the way through to end customers, has remained elusive,” he adds.

More recently, there has been growing interest in investing in an overarching digital strategy that incorporates a so-called “unified data layer.”

“By creating knowledge graphs and ontologies that are supported by natural language processing (NLP) capabilities, companies can automate and streamline the onboarding of external data and conform that external data across various suppliers into a unified data model that can then help to reduce the time-consuming and costly manual intervention that is often required to onboard new data sets from external suppliers,” says Agarwal.

This approach is also being used to help streamline the process for bringing new suppliers on board more—a strategy that can provide another hedge against supply chain disruptions, notes Agarwal. The onboarding process for a new supplier typically takes four to six months. From an administrative standpoint, some leading pharma clients are working to automate time-consuming parts of the process—for instance, by using advanced cloud computing and NLP, he says. This is helping manufacturers to shorten the time required to enable digital data exchange with external suppliers by 30%-40%, which can give them greater flexibility while reducing risk.

Manufacturing sites up and down the pharma/life sciences supply chain already collect a lot of data and notes related to bad lots or a particular process going out of specification. However, such details—which could be the bellwether of a pending supply chain disruption—are often lost in “unstructured” data sets. “Efforts to build in data-driven scenario modeling—for instance, NLP algorithms, can be used to ‘read’ unstructured data and extract relevant information, and using machine learning (ML) techniques can help to reveal important patterns and trends, allowing different issues to be assessed quickly and potentially forecast occurrences of these issues,” Agarwal continues.

The ultimate goal is to be able to the model and prioritize different scenarios, improve predictions and be able to quickly assess the potential impact on delivery timetables, product availability, pricing changes, etc. Deacom works with its customers to run so-called pricing fire drills, so they can better understand the impact of sudden price fluctuations in critical raw materials and other key components, develop “what-if” scenarios, and set up workaround solutions that could be deployed quickly to avoid a crisis and reduce the overall margin impact. “You won’t know the impact of such pricing fluctuations, or be able minimize the damage, if you are only looking at the financials 30 days later,” says Deakins.

“The persistent lack of connectivity throughout the pharma supply chain creates significant opportunities for improvement, by investing in the right analytics and the right technologies,” says Alverson of McKesson. During the initial months of the pandemic, McKesson formed a Critical Care Drug Task Force, which kept close watch on trending treatments for Covid-19 and hot spots across the US.

Prewave uses an AI-based approach to monitor publicly available information (such as published news and social media posts) associated with thousands of companies all over the world, and is able to report in real time specific risks, such as labor strikes and environmental and sustainability issues that can create pinch points or stoppages in the supply chain. “The use of AI enables us to stay on top of large quantities of suppliers and be able to infer meaning to the large amounts of data we are gathering in real time,” explains Nitschinger. Several of the major players in the automotive industry, including Audi, Porsche and Volkswagen are early adopters of the Prewave AI technology, and the approach is applicable to the pharma/life sciences industry as well. Prewave was recently able to generate a sustainability risk alert for one of the large steel furnaces nearly one year in advance, based on social media chatter and related data points. A year later, the furnace was ordered to halt operation due to sustainability issues.

“This type of information is invaluable to help automakers search for suppliers and plan ahead, giving an organization a competitive advantage by helping it to avoid a predictable supply chain disruption,” says Julian Meinke, head of marketing for Prewave. “Strategic contractual agreements form the backbone of most successful supply chain relationships, but at the end of the day, issues often arise that only real-time monitoring can uncover quickly.”

The value of enhanced digital connectivity

Increased use of best-in-class technology options, such as extensive use of internet of things (IoT) sensors and cloud computing capabilities, is a means to an end. When such sensors are used inside temperature-controlled shipping containers, for instance, they provide critical insights into not only the exact location but the condition of every single container; such real-time data lets pharma customers know a delay or problem has arisen before the impact becomes catastrophic, notes Tom Weir, chief operating officer of CSafe Global, a specialty packaging and logistics company.

Specifically, CSafe Global’s sensors are able to provide location and time stamps, but also data related to ambient temperature and humidity inside and outside the temperature-controlled shipping container, tilt and vibration experiences and the number and duration of “open-door events” that could threaten the threshold temperatures inside the cold-chain cargo container so that an effective intervention can be made.

“Enhanced visibility allows all stakeholders to know what’s going on with every single shipment and whether the extremely narrow temperature specifications that are increasingly required for many temperature-sensitive pharma products (e.g., vaccines, biologics, cell and gene therapies) may be at risk without timely human intervention,” continues Weir.

CSafe Global has been working in close partnership with Cloudleaf to enhance the overall visibility of every single high-stakes, temperature-controlled pharma shipment. With their combined capabilities, the companies create modeled scenarios that allow for idealized planning of shipping routes and more rapid response when issues arise. “By enabling better decision-making, the opportunities are enormous,” says Weir.

“Most of the risks to the supply chain are known and can be modeled using predictive analysis, which relies heavily on regression analysis and actuarial probability modeling,” adds Alex Jung, principal, EY-Parthenon, Ernst & Young LLP (EY). “We encourage organizations to contact their insurance companies for support, as the insurance underwriters frequently model these types of risks.”

Accenture and MIT recently collaborated to co-develop a supply chain resilience “stress test”

 that helps organizations to assess and prioritize operational and financial risks created by potential market disruptions, disasters or other catastrophic events and then use the data to define appropriate mitigation strategies and actions.

Accenture’s O’Halloran suggests that modeling and simulation become an integral part of standard pharma supply chain operations. Toward that end, in recent years there has been growing interest in the development of a so-called “digital twin”—which is essentially a detailed digital model of an actual production facility, along with its entire upstream and downstream supply chain network. This virtual model then receives real-time information from all of the suppliers and logistics partners, production facilities, warehouses, downstream distribution systems, hospitals and pharmacies that are interconnected within that particular pharma ecosystem.

“Once a digital twin has been set up, you can model the complex interrelationships among all supply chain partners —informed by constant real-time data—and run “what-if” scenarios that enable rapid anomaly detection gap analysis to reveal vulnerabilities, and carry out informed contingency planning to minimize unplanned downtime,” says Veerina of Cloudleaf. “While such efforts are still nascent, early work is very promising and this is likely to be a big trend in the years to come.”

Research from Accenture’s Technology Vision 2021 report

 shows that 87% of executives agree that digital twins are becoming essential to their organization’s ability to collaborate in strategic ecosystem partnerships.

There has always been a natural tension between these two prevailing philosophies: Pare down your supply chain to be lean and mean, in terms of driving out surpluses and inefficiencies); versus build up redundancy, in terms of the number of suppliers and the amount of inventory, both raw materials and finished products, that is stockpiled to enable a quick response to supply chain disruptions. History has shown that the pendulum tends to swing back and forth every few years, as one approach or the other is favored.

“Without a doubt, as more companies look to build in safety and redundancy by partnering with additional suppliers in multiple regions—to spread out the risk and reduce the likelihood of a crippling incident related to any given region—the overall complexity is only growing in size and scope, says CSafe’s Weir. When it comes to the logistics associated with delivering temperature-controlled products such as vaccines, biologics and cell and gene therapies in a timely fashion, there’s no room for error. “It used to be that you could predict the exact shipping route from A to B down to the day, but that is not true at the moment, so the need additional options in order to be able to pivot quickly is essential,” contends Weir.

“Recent experience has shown that building in some redundancy to enable greater resilience to supply chain shocks is more important than trying to remain lean at any cost,” adds Veerina.

However, others disagree. “We believe that today, there are more cons than pros to stockpiling excess or redundant inventory, especially given that these are sensitive products that may be subject to expiration or contamination,” says EY’s Jung. “Effective contracting is also a huge element of this, and it does not necessarily require large cash or capital investments or even advanced AI capabilities—but rather clear communications and a well-designed model that leverages existing partner infrastructure and creates clear expectations around responsibility.”

For added risk reduction, Jung notes that supply chain partners should also explore opportunities to make nominal investments that create collaborative solutions that can be used by both sides—for example, by developing shared space, transportation or labor pools.

“Smart procurement procedures—whereby multiple manufactures in different geographical regions are awarded supply contracts—offer a clear way to build in redundancy, yet this is not always possible through economic, legal and scarcity reasons,” adds Per Troein, vice president of strategic partnerships at IQVIA. “Today, the ability to use predictive algorithms to map out and monitor upstream suppliers is becoming easier and more sophisticated, and this allows manufacturers to identify disruptions more quickly and react to them more effectively, while reducing their reliance on holding surplus inventory.”

Similarly, CSafe’s Weir advocates treating suppliers as partners, and working to develop a long-term relationship with them. “Creating just a transactional strategy, whereby you change suppliers every time there’s an opportunity to save a few pennies is a poor long-term strategy,” he believes. Instead, companies should establish clear evaluation criteria and maintain a supplier scorecard that comes from the top leadership team, Weir contends.

Ultimately for the manufacturer, effective contracts that are designed to safeguard against supply chain risks will provide a competitive advantage, executives believe. “Whether it’s new warehousing facilities or evaluating working capital on hand, manufacturers should seek out partners that are willing to give them the data and flexibility they need to make strategic decisions,” says Alverson of McKesson.

“It is important to seek greater visibility into your supplier’s subcontractors, but it is difficult to demand disclosures related to a relationship you don’t own,” adds Jung. According to recent Accenture research

, 60% of supply chain executive in the pharma/biopharma/medical device space struggle to get real-time inventory and visibility from external manufacturing partners. Spot auditing can help to identify and remediate issues early, and in addition to spelling out the requirements of every player in the contract, governance standards should be established as well, Jung says.

Cybersecurity breaches and ransomware threats

“Pharmaceutical companies rely on complex networks of interconnected partners and routinely work with critical third-party partners such as [CROs] and contract manufacturing organizations (CMOs),” says Cesar Villalta, global life sciences security lead for Accenture. “As such, the entire industry is on heightened alert for cybersecurity threats from cybercriminals and foreign adversaries looking to disrupt the health ecosystem or steal intellectual property.”

In 2019, more than 300 cybersecurity incidents impacted supply chain entities, according to a recent study by Resilience360

, a supply chain risk management firm (it recently rebraded with Riskpulse as Everstream Analytics). Companies in the pharmaceuticals, chemicals, technology and automotive sectors were targeted by ransomware and data breaches from cybersecurity attacks, phishing efforts and malware, according to Check Point Research.

Weir adds a cautionary note: “While the broader use of sensors and cameras to provide real-time data is certainly helping to enhance supply chain visibility, stakeholders must also appreciate that some of these connected devices will also provide another entry point to infiltrate an organization, so you really must engage companies with specialized expertise to maximize the opportunities without creating additional problems.”

The efforts and investments made to detect and respond to threats across the entire supply chain must have the ability to scale appropriately, depending on the complexity of the threat, says Villalta. To evaluate their cyber resiliency across the value chain, he suggests that organizations should consider carrying out proactive cybersecurity-threat simulations to pressure test the cybersecurity controls and the existing response measures of their supply chain partners.

https://lloydslist.maritimeintelligence.informa.com/LL1136281/Ever-Given-partially-refloated-raising-hopes-of-Suez-Canal-reopening

https://www.technologyreview.com/2020/11/24/1012450/building-resilient-supply-chains/

https://www.accenture.com/us-en/insights/technology/technology-trends-2021#block-mirrored-world

https://www.accenture.com/us-en/insights/life-sciences/life-sciences-supply-chain-collaboration?c=acn_glb_lifesciencessupslideshare_10918678&n=smc_0319

https://www.techrepublic.com/article/nearly-300-cybersecurity-incidents-impacted-supply-chain-entities-in-2019/

https://www.ntsc.org/assets/pdfs/cyber-security-report-2020.pdf

Amid the need for enhanced visibility across the entire pharma ecosystem, strategies focused on ramping up digitalization are critical for manufacturers to boost agility and resilience in the face of predictable and unforeseen threats

Staring down supply chain disruption

Admitting to a bit of indulgence, yes, the headline is indeed a play off of the 1992 R.E.M. album 

, one of my favorites by the band. But don’t worry, I won’t attempt to somehow tie our 

 on supply chain management and the latest in drug serialization and track and trace into goofing on Elvis or how the sidewinder sleeps. But in reading through our coverage while putting together the issue, and speaking with people on the inside of pharma’s vast supply chain engine, one secondary theme kept echoing quietly from the background: automation. That process-driven world of machines and controls that makes sure pharmaceutical ingredients are handled and filled correctly and precisely.

Amazing technology but always tough to fully grasp for the layperson. It’s expected, and, therefore, often difficult to appreciate true advancements in automation when they arise. And perhaps more importantly, also to remind ourselves of the end game: critical formulated, mixed and packaged medicines in the hands of people—patients, healthcare providers—more quickly.

It’s “not automation for the sake of automation, but automation to result in a true benefit—to get products manufactured and distributed faster to our customers,” Vin Colicchio, vice president, supply chain and external manufacturing, Dr. Reddy’s Laboratories, tells me in our June 

 when explaining the company’s motives in deciding to automate certain supply chain functions.

And it’s not just in the context of the production line, of course. A recent report on the pharmacy automation market notes (and we cover 

) that the use of automated machinery to fill and dispense prescriptions is poised for a period of significant growth over the next few years, driven in part by the emerging involvement and investment of big-tech giants like Amazon and Uber. 

On the drug shipping and monitoring front, the ability to automate data and analytics to support smarter planning and decision-making is also attracting notice, as Suzanne Shelley reports in our 

Sometimes even innovation goes through the motions.

Michael Christel is Editorial Director of Pharmaceutical Commerce. He can be reached at

Appreciating the human side of automation motives and approaches in the pharma supply chain

Automation for the people 

Radio-frequency identification (RFID) technology, mostly rejected a decade ago for pharma track-and-trace applications, is winning adherents, especially in hospital pharmacy systems. In the 2004-2009 period, the technology was actively pursued both by pharma companies and by wholesale-distributors, who envisioned streamlining the inventory management process in their vast warehouses. But technical difficulties and cost swung the pharma industry globally to deploying 2D barcode for serializing product and tracking it through the supply chain. Passage of the Drug Supply Chain Security Act (DSCSA) in the US in 2013, and the Falsified Medicines Directive (FMD) in the European Union around the same time, more or less locked in the path industry had chosen.

Over the past year, something of a critical mass of RFID providers and their hospital customers has been achieved. An industry consortium, DoseID, has been formed with (as of May) 24 members. One of the founding members, generally regarded as an industry leader, is Kit Check, which says it has some 500 hospital systems as customers, and has delivered over 150 million RFID tags, either to the hospitals themselves or to pharma manufacturers. DoseID is not the only source; at least one company, IntelliGuard, says that it has built up a customer base of 400 hospitals. (Both IntelliGuard and Kit Check generate revenue with the in-hospital stations that read and collect RFID data; the tags themselves come from business partners.)

Mention of DSCSA highlights a key element of this RFID movement: the technology can provide the same (if not better) anticounterfeiting and supply-chain visibility that the 2D barcode scheme offers—including all the data that DSCSA requires. Technically, FDA has mandated use of 2D barcodes plus human-readable product identification on packages—so at best, RFID would duplicate, but not replace, the 2D barcodes.

The Healthcare Distribution Alliance, the trade association of US wholesalers and distributors, is fairly adamant that any combination of DSCSA compliance and RFID adoption is a waste of time. While 

 on last year’s FDA Pilot Program summary, which included a demo from Kit Check, it told FDA that “urging widespread adoption of RFID or mandating its use would be contrary to the DSCSA and its persistent discussion at the public meeting was an unwelcome distraction.”

“I do not see DSCSA transitioning to RFID, except maybe at the shipper [case] level,” says Jeanne Sirovatka, senior director of packaging design and technical projects at Fresenius Kabi, which has recently announced that 20 of its injectable products are going to be RFID-tagged. “At this point, with the investments that the pharma industry has made in 2D barcode, nothing will stop that effort.”

But at least one manufacturer sees a future for RFID. “RFID is a step farther in tracking product than the 2D barcode for DSCSA compliance,” says Lou Kennedy, president of Nephron Pharma. “We consider it the gold standard for traceability, and eventually we will be moving our entire suite of products to it.”

For years, experts involved in DSCSA implementation have been looking for “value beyond compliance” in serialization and tracking; to its proponents, the value of RFID is already there. “DSCSA is a compliance requirement,” says Kevin MacDonald, CEO of Kit Check, “that adds cost to the system rather than taking costs out. Health systems aren’t doing RFID tagging because they have to but because they want to.”

So far, the manufacturer-RFID-tagging trend is of most interest either to producers of generic injectables, or to outsourced compounding pharmacies (503b facilities) And while it seems to be a growing trend, it has a long way to go to approach a significant fraction of the US pharma market. Data from IQVIA’s 2020 Medicine Spending and Affordability 

 show that, at best, 25% of pharma sales occur in hospitals and clinics. According to industry estimates, some 11% of US hospitals have RFID systems paired with pharmaceuticals currently.

Health systems have been energetic users of RFID for years: tracking medical devices’ location and identity; connecting patient wristbands with the nurses who treat them, and the procedures being performed; inventory of healthcare supplies. For pharmaceuticals, a key use case is surgical trays equipped with the drugs typically used during certain surgeries. Related cases include “crash carts” that are brought to the patient’s bedside during emergencies, and dedicated cabinets for anesthesia, or for refrigerated products.

According to Kit Check’s MacDonald, the key issue for hospital pharmacies is that drug dosages need to be hand-tagged with RFID labels before they are loaded into trays or carts. There is a substantial labor overhead to doing so; in addition, if the dosages are not tagged, a considerable inventory of expensive drugs could be sitting in the trays, potentially expiring.

In practice, Kit Check’s automated cabinets read incoming product data, and the products are tracked into trays or other storage options. Kit Check maintains a cloud-based database, branded as Bluesight, to record all these details. A valuable benefit of the system, says MacDonald, is the ability to derive a “beyond use date” (BUD) for a product that might be withdrawn from a refrigerated cabinet, then returned; as long as the product’s stability budget (time out of refrigeration) has not been exceeded, it can be reused.

The company touts at least one health system client, Reading Hospital in Reading, PA, that used this BUD tracking for Covid-19 vaccine management. The hospital’s pharmacy was nearly overwhelmed with hundreds of dosages being administered daily, while striving not to lose vaccine that had been taken out of its ultracold storage, but not given to a patient.

Yet another important application for Kit Check, IntelliGuard and other players in the RFID/pharma space has been diversion control of controlled substances. Kit Check’s Bluesight for Controlled Substances won an award from the KLAS Research organization for this application in 2021. At IntelliGuard, CEO Gordon Krass says that his company’s tracking technology enables linkages to the pharmacist or nurse dispensing a controlled substance, as well as to the hospital’s electronic health records (EHRs) database, to enable “preventive, not just retrospective” control of dispensing.

There appears to be an obstacle to widespread use of RFID by manufacturers (let alone contemplating filling in a DSCSA function): who controls the data? As things stand now, any user of Kit Check equipment and services has its data stored in a cloud-based “registry” (as Kit Check calls it). CEO MacDonald says that this centralization provides an important benefit—avoiding the silo effect with automation. “There are so many siloed systems,” notes MacDonald, as one moves from the pharmacy to the operating room to the EHR system. “A key benefit of the DoseID program is that if I have a [DoseID-certified] piece of equipment, I’m not perpetuating these silos.”

The DoseID program, managed by the Auburn University RFID Lab, is intended to provide certification of equipment performance, as well as compatibility across its membership. And while the DoseID website says that this standardization includes the GS1 EPC UHF protocol, it is apparently not limited to that. Kit Check’s MacDonald says that “DoseID is trying to both support GS1 standards and create compatibility that works with modern RFID silicon [i.e., the onboard memory of an RFID tag] and the cloud more broadly.”

For its part, IntelliGuard says that it is the first company to provide GS1 EPC standards in hospital pharmacy applications. When Fresenius Kabi announced its RFID program last year, it specified GS1 compatibility (and is working with a tag supplier, eAgile, that is a business partner of Intelliguard. Neither Intelliguard nor eAgile are currently members of DoseID.) On the other hand, Kit Check issued a press release saying that it has worked out interoperability issues with Fresenius Kabi.

A related issue is management of the database that contains the drug-tracking data. One thing has become clear from the years of wrestling that manufacturers and wholesalers have had with DSCSA, is an unwillingness to put all supply chain data in one database. So far, Kit Check’s MacDonald says the company has had “no pushback” either from hospitals or from manufacturers over how it runs its registry; data can be protected from one user looking into another’s.

At IntelliGuard, Krass says that there is significant potential for manufacturers in the RFID data: “Today, pharma companies rely on distributor reports, but don’t have visibility inside the hospital. They spend millions of dollars with third-party firms to find out what happens with their products. We could eliminate all of that, with data sharing, and blinding patient info. This gives pharma an understanding of how their products are used.”

Nor is the data-sharing problem solely a competitive matter between Intelliguard and Kit Check. When Avery Dennison, a leading tag and label manufacturer, announced a new family of tags earlier this year, they also announced (see https://bit.ly/2T9fJlD) a relationship with a Silicon Valley firm, SUKU, for a blockchain-based data-storage system. Moreover, there exist other system providers (such as AmerisourceBergen, with its Cubixx station) that provide their own data-storage systems. Ultimately, provided that more hospitals get on the RFID bandwagon, and pharma manufacturers follow suit, these issues will be worked out.

Nicholas Basta is Editor Emeritus and Founder, Pharmaceutical Commerce

Bypassed a decade ago for traceability applications, radio-frequency identification is making a comeback in hospital pharmacies

RFID on the rise again in pharma

The global public health emergency over the past 15 months, like with many enterprises, has taught the life sciences industry some tough business lessons, while reinforcing principles and strengthening resolve when it comes to protecting its most critical asset—its people. One area in particular that reflects that necessary mix of human capital with tangible commercial output and customer goals is supply chain management. 

 spoke recently with Vin Colicchio, vice president, supply chain and external manufacturing for Dr. Reddy’s Laboratories, about the challenging coordination and quick pivots in planning and decision-making that have been required to keep those qualities working in unison during the pandemic. A 30-plus-year industry veteran, being a part of the Indian multinational drugmaker, while based in Dr. Reddy’s Princeton, NJ, office gives Colicchio a unique perspective on Covid’s contrasting dynamics in the US and India, and what he stresses should be a “ healthy respect” for global logistics—those often unseen efforts to deliver medicines to patients as fast as possible.

1. Following the Covid-19 pandemic’s chaotic start, the global pharma supply chain, by many accounts, has mostly operated satisfactorily, with most shipments maintained. What industry practices or factors do you believe have been the key contributors in maintaining critical drug supply chain?

The key supply practices have always focused on the importance of sourcing adequate supplies of active pharmaceutical ingredients (APIs), and also the key starting materials that are used to manufacture the APIs; those are critical. In addition, you must ensure that your manufacturing operations have sufficient excipients and packaging supplies on hand to ensure that you can produce your products and can get them on the market on time.

Many companies previous to the pandemic may have only purchased two to three months of supply on raw materials and packaging components.

Now, most companies are taking a very assertive approach to getting more materials in-house, so they may purchase four to five months of supply of critical materials for these more valuable products.

There are different factors that have contributed, too. Early on in the pandemic, Dr. Reddy’s decided to focus primarily on ensuring the health, safety and well-being of our employees, and to put safe practices into place, especially for our manufacturing teams at the plants in India that are part of the Dr. Reddy’s network. When India went into a national lockdown, we had to ensure that we could get people safely from their homes to their places of work at the manufacturing plants. We were able to secure shuttle buses and meals for people, and able to make sure that we sanitized vehicles and the facilities so our employees operated in a safe environment. These actions were vital to allow our teams to manufacture our products under challenging circumstances.

We had the plants running literally 24/7 during the pandemic and even now, amid the second phase hitting India, we’ve orchestrated it in a similar fashion. That’s very important to making sure that we can maintain our critical drug supply.

One of the other aspects we put in place was during the early days of the pandemic, we saw that logistics had to really spring into action very quickly. We had to secure air freight and sea freight transportation on a continued expedited basis, because the competition was doing the same thing. And while the sea freight was fairly available without a lot of constraints, the air freight was a different story. Many passenger flights were canceled. We had to secure cargo planes to move our products. So our India and US supply chain teams met daily to ensure that we had line of sight on when products had to get transported from India to the US. And doing that on an everyday basis—chartering flights, booking sea freight—and making sure that we had the travel logistics in place to move our products as quickly as possible was an integral part of maintaining our critical drug supply chain.

I also think the digital technologies were a plus. Before the pandemic, we used [Microsoft] Teams, but definitely to a much larger degree now, and Zoom came into this as well. Just having those technical platforms in place really helped transform the way that we dealt with rapid communication and managing our business. It was all about speed and connectivity.

2. As the US and much of the developed world are seeing generally declining Covid infection rates, can one argue today that perhaps a more secure supply chain has been a “positive” byproduct of the pandemic?

The pharma supply chain is more secure in terms of procuring more volumes of the needed materials to manufacture and distribute our products. We also work more effectively with our internal manufacturing plants and our contract manufacturing and packaging partners. To supply the North American market, Dr. Reddy’s uses our own manufacturing plants in India and the US, but we also have a network of contract manufacturing and packaging partners in India, Canada and in the US.

It’s a very compliant and secure supply chain. There are more checks and balances in place with more frequent business, material and supply chain reviews. The level of scrutiny and confirmation must be increased because if your partner doesn’t have adequate supply of APIs or production materials released, and you’re counting on them to deliver on time and in full, that could be quite disruptive. While Dr. Reddy’s has been very capable to secure its supply chain, we also demand that of our partners. We want to make sure that there are no weak links in the overall global supply chain and that we are able to count on the people, systems and procedures—both internally and with our business partners—to manufacture and supply our products to for our customers.

One of the other aspects of Covid is that there is a lot more direct discussion with the supply chain teams and our customers. Our customers want to know where their products are coming from, inventory levels and when are they going to be delivered. With anything that’s happening related to the pandemic or even recent weather-related events, now there’s a more open and very transparent, very timely set of discussions that could happen with our customers. That is a notable change since the pandemic started.

I would add that it’s the speed of processing as well. For us, it’s the advent of our work toward digitizing many of our processes. It varies very much by business, but in supply chain especially, we have certain processes that we’ve identified that have been or are in the midst of being automated. And not automation for the sake of automation, but automation to result in a true benefit—to get products manufactured and distributed faster to our customers.

3. How do you juxtapose the dynamics mentioned regarding improving pandemic trends in the developed world with the strain and demand on the supply for vaccines and PPE in India and Southeast Asia? How involved is your team at Dr. Reddy’s in some of those support efforts?

First and foremost, Dr. Reddy’s team in India performs at a very high level in terms of manufacturing operations and supply chain management. They’re dedicated to manufacturing, supplying and providing accessibility to our medicines. That’s the key focus.

At the same time, when you think about what’s happening in India with the surge and the unfortunate high incidence rates of the coronavirus and the death toll that it’s taking, our people continue to work very diligently while they’re taking care of themselves and their families. I look at that in comparison to the high demand of vaccines and PPE.

I think it’s very important to outline what Dr. Reddy’s has been doing to take care of its people while we’re also leveraging our business to manufacture products for our customers. We’ve taken a four-pronged approach across treatment, vaccines, hospital spaces and work shifts at the plants. For the treatment aspect, a year ago, Gilead provided licenses to eight manufacturers to produce and market remdesivir for Covid in over 100 countries. We were one of the eight companies to get that license. So we’ve been manufacturing remdesivir, and, at the same time, sequestering some of the inventory for our employees and their family members in India in need of it.

On the second prong of this approach, in particular we partnered with the Russian Defense Investment Fund (RDIF) to get access to its Sputnik V vaccine. Dr. Reddy’s conducted Phase II and Phase III clinical trials in India and we received emergency use authorization [in late April]. This means that we now have access to 250 million doses. And because it’s two shots for each person, it’s equivalent to 125 million patient doses. While this is less than 10% of India’s current population of 1.3 billion, it does provide us a great opportunity to treat people. At some point in time not only will we be treating the people that are in need, but it’s been announced that our employees and their families will be eligible for the vaccine as well. The first shipment has been made available in India and the dosing will commence as soon as it’s reasonably possible to do so. That’s a good development.

The third aspect is we have converted several of our building spaces into hospital rooms with hospital beds. We have designated areas in our plant environments called learning academies; they are conference spaces that have been converted with hospital beds and the necessary medical equipment so we can have employees and their families come over there and get treatment. As you know, it’s been difficult to get a spot in hospitals in India; they’ve been overwhelmed. So with that level of space availability, we’re able to take on people in there now. There’s about 75 rooms available at each of the three learning academy sites.

The fourth prong is that we normally run three shifts a day, six to seven days a week in our manufacturing plants. But what we’ve done is gone from three 8-hour shifts to two 12-hour shifts, and this enables us to minimize people exposure via shift changes. And we’re ensuring them access on the roads from their homes or their ability to travel. The feedback that we’ve gotten is that it’s clearly evident that the company’s focus is on the safety and health of its employees. That’s our No. 1 priority, to help our people and help their families.

It’s juxtaposing the simultaneous actions of manufacturing products and first taking care of our people, ensuring their safety and well-being.

4. There have been many capacity expansions across the globe in the pharma logistics business as a result of the pandemic—involving a range of organizations in this space, from technology and data vendors to air cargo companies, etc. Do you see that trend continuing, and how has the structure or dynamics of supplier/distribution relationships changed, if at all?

I definitely see it continuing. The supplier/distribution relationship is going to be very dynamic for years to come, and certainly depending on the industry—whether it’s technology or data, telecommunications, pharmaceuticals, whatever it may be. Much of this is driven by consumerism, of course, but with pharma, it’s driven by the need to get products out to our customers as quickly as possible in a secure and reliable manner.

There’s a shortage of freight-carrying capacity at this time. Container ships are at an all-time premium right now; more vessels are being built and there’s also a shortage of containers right now to support global trade. There’s going to have to be an increase in vessels and the containers. Pharma companies will definitely need to secure their freight carriers weeks in advance to move their supplies. It’s just a given, because there’s going to be a very strong continued relationship between the supplier and its distribution partners to ensure speed of service at a cost-effective rate.

The pace and volume of global trade is astounding and I see this activity intensifying over the coming years. Look at the recent example with the Suez Canal. The Ever Given container ship got jammed in place for seven days, and it really threatened the global trade market. There were ships considering taking the long way around the southern tip of Africa to get over to the Atlantic, while some just stayed in a holding pattern in the Red Sea and elsewhere. When a 20,000 container vessel gets landlocked in the Suez Canal and can bring the world to its knees in terms of disrupting the global supply, it gets on the radar of all industries. If you can’t get your Peloton bike on time or the latest iPhone, or, of course, pharmaceutical supplies, it’s totally disruptive.

When something like that happens, it does have the ability to affect things in a negative way. But at the same time, having a strong supplier/distribution relationship will reinforce all those positives. That’s something that we ensure is in place. You’ve got to have a healthy respect for global trade and logistics getting products to people as quickly as possible.

If you think about it in the context of launching a key product in a global supply chain. For instance, you source the active ingredient from India, you manufacture in one US location, and you package in another US location. You’re going to need to ensure that all those pieces come together at the right time. Having a solid relationship with your freight carrier company is pivotal to ensuring that you’re launching a product on time. The difference is millions of dollars in revenue. But more importantly, it’s making sure that your patients have access to this medicine that you’ve been planning on launching for several months.

5. Has there been increased focus and investment across the pharma supply chain in training around good distribution practice (GDP) standards?

Yes, we have seen that. Our teams in the US and India routinely undergo compliance training, and part of that is good distribution practices training for our warehousing teams and our supply chain people in logistics. We want to make sure that compliance is always maintained, and then we’re also on top of the most recent changes in any GDP specifications there might be. We want to ensure that our team in the US works very closely with our 3PL (third-party logistics provider) to improve and strengthen inbound and outbound capabilities. Because if they understand the GDP aspects more, then we have the ability to actually improve how our business operates.

6. Regulatory compliance is often an ever-shifting set of rules in pharma. Taking into account compliance with the Drug Supply Chain Security Act (DSCSA) in particular—and FDA’s deadline extension on enforcement of a number of new requirements, most notably saleable returns verification—what are some of the preparations and key challenges for you and your partners in serialization readiness?

When the deadline was put in place for Nov. 27 of 2020 and then it got pushed back by three years, we had already embarked on that project with our US team at Dr. Reddy’s, and we decided to stay the course. We knew that we did not want to disrupt the team’s progress because they were very close in getting everything mobilized for completion. We endorsed them continuing to move forward with that, and they were able to actually get that project completed for Dr. Reddy’s. Some other companies did that also while others decided that they were going to hold off [and focus on] meeting the new deadline.

Many of our contract manufacturing organization (CMO) partners also completed that or are currently finishing or in different phases of completion—and that’s important. We want to make sure that our partners are also following the DSCSA requirements and meeting those timelines for serialization. Our 3PL is working on its serialization capabilities and Dr. Reddy’s is lending support in that. We expect to see our 3PL finalizing and completing its project later this year; by then, we’ll have everything in the US locked down with serialization.

So it is coming into play; it’s taken some companies longer to implement than others. It is a complex endeavor, but it has been moving along steadily.

The pandemic has spotlighted the challenges of technology transfer a bit. Given your focus in external manufacturing, how has the world of tech transfers changed, if at all, in recent years? What new approaches are companies like yourself implementing in this area?

I would say that for us, the approach to tech transfers hasn’t really changed in terms of executing product transfers—whether you’re conducting a site transfer or you’re doing a scale-up, from a small-scale to a full-scale commercial manufacturing operation. From a regulatory point of view and from a scientific point of view, that hasn’t changed. But what has changed is the need for more lead time. One of the biggest challenges is there’s more complexity for certain technology platforms—if you have a complex-to-manufacture pharmaceutical product that is not your typical oral solid dosage product. Those require strong technical expertise and a lot of lead time, especially now with Covid.

Unfortunately, with absenteeism levels on the rise in certain parts of the world, in certain companies, you’re seeing that the manufacturing workforce could be impacted. You could see an impact in the quality control workforce, the quality assurance, or even the tech teams and R&D teams. When that happens, everything gets slowed down. So while in generics you want to move as quickly as possible to get products to market or to ensure that your tech transfers are getting approved as quickly as possible, you have to factor in a reasonable amount of additional lead time. In many cases, you simply need to plan for more lead time than you would have done in the past.

One of the other aspects is that, as always, you can leverage manufacturing capacities to ensure that tech transfers are done on time, while still providing for the supplies of your current commercialized assets, presuming they use the same lines and factories. While you’re focusing on your scale-ups and your tech transfers, you’re always going to have to simultaneously manufacture your commercialized portfolio. Sometimes that can kind of be in conflict, but companies have to balance that demand.

And then another factor is current FDA inspections are done virtually. The agency is assessing when it will start getting back physically into the plants to conduct its inspections, but for the time being, virtual inspections are being done. In that respect, it’s sometimes a bit of a challenge for pharma companies to work with that type of approach. But the best companies adapt to the new ways of working and become effective at managing through the inspections to yield favorable outcomes.

But it’s been happening for several months, and rather successfully to my understanding. Business has to continue, and the FDA realized a long time ago that it was going to have to be flexible to conduct remote audits.

8. What sparked you to pursue a career path in pharma manufacturing, supply chain and operations management?

I was always interested in science at a young age. I ended up focusing on engineering at Rutgers, and graduated with a B.S. degree in Biochemical Engineering. I always wanted to work in pharmaceuticals. Part of my draw to it was the ability to provide medicines to people. I always thought that was a worthwhile and noble endeavor. I initially worked in a fermentation and antibiotic refining unit for the former Lederle Laboratories, which became part of Wyeth and eventually Pfizer. I was a first-line supervisor and enjoyed the work a lot, getting involved with manufacturing of various pharmaceuticals. And then throughout the years, I was able to take on more responsible roles in manufacturing operations, engineering and supply chain. I had the opportunity to manage several manufacturing sites in various international locations and learn about different cultures.

It’s important to me that our teams do a great job of manufacturing and are able to supply on a timely basis to our customers. That’s something I’ve always enjoyed and have a passion for. If you can make a positive difference with your career to help people out and improve their quality of life, I can’t think of a better career than in the pharmaceutical industry.

A conversation with Vin Colicchio, vice president, supply chain and external manufacturing, Dr. Reddy’s Laboratories 

People, production, and priorities

The ability to track pharmaceutical product inventory and movement through the healthcare supply chain is an increasingly obvious priority to help support the highest possible quality of care and patient safety. The pharmaceutical industry has been implementing major improvements since 2013 that—when fully implemented across the entire industry—will go a long way to facilitate better supply chain visibility and inventory management through more consistent and standards-based product identification. This visibility will help the industry plan and prepare for changing circumstances as efficiently as possible and enable providers to obtain the products they need, when they need them, and to anticipate those needs as accurately as possible.

Pharmaceutical companies have been working to implement globally unique product identification in accordance with the 2013 Drug Supply Chain Security Act (DSCSA). Trading partners are getting closer to item-level traceability and have already made significant investments in implementing serialized item traceability systems.

Serialization and unique product identification enable trading partners—from manufacturers to wholesalers and distributors, all the way to healthcare providers—to positively identify every pharmaceutical product as it moves through the supply chain and hospital inventories. As products are scanned along the journey, real-time data becomes available to stakeholders, including the product’s location on its way, so healthcare providers can accurately predict when their orders will be delivered.

Item-level serialization of all regulated pharmaceutical products will enable vast improvements to the supply chain’s efficiency and performance. It is a tall order for manufacturers—requiring intensive collaboration between trading partners, installment of internal data systems and production adjustments to allow for the necessary labeling and tracking. But the good news is, the industry is well on its way.

GS1 US recently conducted its fourth annual barcode assessment in collaboration with AmerisourceBergen Corporation, McKesson Pharmaceutical and Cardinal Health to quantify the industry’s progress in serializing their products. Barcodes were scanned in three different facilities and evaluated for correct application of the required data standards.

Each year, improvements have been documented as the major pharma companies increase their implementation and more products enter the supply chain with the proper identification. At the same time, inventories of “grandfathered” products that entered the supply chain before new labeling requirements kicked in (Nov. 27, 2018) are being used as allowed before they expire; as these inventories are whittled down, newer products with the proper labeling will take their place. The average expiration date of products found in inventory during the 2020 assessment was 1.6 years for the second consecutive year, down significantly from 2.3 years during the 2018 assessment.

As those products are consumed or expire, the percentage of fully serialized products in the supply chain will continue to go up, heading towards the goal of 100%.

The three participating companies in the assessment each evaluated labels on a specified slice of the market. AmerisourceBergen assessed package (lowest saleable unit) barcoding of specialty pharmaceuticals; McKesson measured lowest saleable units of widely used prescription drugs sent to hospitals and retail pharmacies; and Cardinal evaluated progress with the labeling of homogeneous cases.

Over 90% of packages and cases scanned at these three companies’ facilities met all of the labeling requirements, with three years remaining until the final DSCSA deadline in 2023.

Specifically, the 2020 barcode assessment showed that a vast majority of products were correctly marked with all of the necessary data elements, including 90.1% of specialty packages tracked by AmerisourceBergen; 86.6% of packaged drugs tracked by McKesson; and 93.1% of homogeneous cases tracked by Cardinal. Taken together in aggregate, 90.1% of all the scanned barcodes met the standard.


The DSCSA requires pharmaceutical products to be serialized and labeled to support an interoperable, electronic system for identifying and tracing throughout their distribution in the US. Four standardized data elements are required to be encoded in a barcode, including a national drug code (embedded in the Global Trade Item Number®, GTIN®), serial number, lot number and expiration date. Packages (“lowest saleable units”) must be marked with a 2-dimensional (2D) barcode (e.g., GS1 DataMatrix barcode), and homogeneous cases must include a 2D or linear (e.g., GS1-128) barcode. The application of standardized data facilitates product traceability throughout the healthcare supply chain and will be used to associate the physical product markings with serialized electronic data exchange that will be required in 2023.

Wholesaler distributors will also become accountable for verifying the unique identifier of returned products before they can be placed into inventory for resale. The enforcement deadline has been extended to 2023 for all remaining DSCSA milestones for all trading partners, including for dispensers, who will be expected to receive only product with 2D Data Matrix barcode and product identifiers in accordance with the regulation. To meet this requirement, pharmacies will need 2D barcode scanners connected to supply-chain data systems containing product information that can be exchanged between trading partners.

End-to-end implementation of the DSCSA will result in improved inventory visibility and better detection of product counterfeits. Ultimately it helps protect patients’ “five rights” of medication use: assuring that the right patient can receive the right drug, at the right time, in the right dose and via the right route—all of which are generally regarded as a standard for safe medication practices.

The interoperability that will be enabled in 2023 by full DSCSA implementation will significantly enable better data sharing for improved supply chain efficiencies and patient safety. As the world moves toward post-pandemic operations, the work that has been done will greatly improve pharmaceutical distribution, patient safety and global health.

Details of the Barcode Assessment study are published in a new GS1 US report, 

“Progress on 2023 DSCSA Interoperability.”

Peter Sturtevant, Sr. Director – Community Engagement, GS1 US

Barcode assessment project demonstrates the ground gained in meeting serialization-readiness requirements for supply chain transparency

The march to DSCSA interoperability

In the rush to manage drug development and commercialization timelines, emerging life sciences companies may feel the need to quickly enter into supply agreements. However, by taking time to properly define specific business requirements, understand the supply market and manage the negotiation process, a company can minimize risk by controlling supplier quality and avoiding hidden costs. How a company manages their sourcing process will determine how they 

While emerging companies want to build valuable supplier relationships, some team members’ prior experience with a large company’s sourcing bureaucracy can hinder their current ability. By 

 of past practices and applying strategic sourcing practices aligned with their current business requirements, an emerging biopharma company can negotiate supply agreements to meet development timelines, quality requirements and cost constraints.

Consider these scenarios which describe “hastened purchasing decisions” that can adversely impact an emerging company’s ability to develop products and grow:

Value is a combination of price, cost and how a good or service supports a company’s growth. It is one thing to recognize that purchasing low-cost lab equipment and supplies is not valuable to a company if their equipment will not help them properly run a design of experiment. However, spending top dollar on lab equipment and supplies will be inefficient if the equipment is unused and supplies go out of date.

To understand the value of supply contracts, consider the following questions to determine the parameters that will create a valuable supplier relationship:

Details matter—prevent terrible contracts

Unfortunately, we hear about terrible contracts too often. To avoid this, buyers should practice “

” by managing their contract process. Thinking a supplier’s terms are adequate and standard for all customers is a grave mistake leading to hidden costs and increased risks. Realizing this, good companies take time to properly manage the sourcing, negotiating and contracting process to prevent bad contracts from being implemented. While emerging companies may lack an organized sourcing and contract management systems, they have an opportunity to develop an efficient process to link systems, polices and organizational responsibilities together.

By building relationships with suppliers through a simple but organized sourcing process, an emerging company can create value and serve the needs of its patients.

Dave Stowe is senior procurement advisor at Tunnell Consulting. He can be reached at 

How emerging life sciences organizations can create value with suppliers

Pharmaceutical Commerce - June 2021

Pharmaceutical Commerce - June 2021 Issue (PDF)

Building a better supply chain

Staring down supply chain disruption

Automation for the people

RFID on the rise again in pharma

People, production, and priorities

The march to DSCSA interoperability

Plan of attack for small company supplier negotiations

Building a future pandemic blueprint

2021 Pharma Traceability Vendor Directory

Algorithms and accountability