China’s updated National Essential Drug Lists (NEDL) were published on March 15th, 2013 and came into force on May 1st 2013. The 2012 version of the NEDL includes 520 drug molecules on it, including 317 chemical drugs and biological products.

On May 9th, the China Food and Drug Administration (CFDA) announced the new drug serialization and traceability reporting deadlines for these added medicines. They include:

• November 30, 2013: 2012 NEDL drug products that are domestically packaged (i.e. w/in China) need to be serialized and reported upon to the CFDA.
• March 31, 2014: 2012 NEDL drug products that are packaged outside of China and imported into the country will need to be serialized and reported upon to the CFDA.

The new NEDL products, like the 2009 NEDL list drugs and the Provincial Essential Drug List medicines which have deadlines throughout 2013, all have similar requirements for acquiring serial numbers from the CFDA, applying the serial numbers at the case and unit package level and reporting on various commissioning and inventory movement transactions.

TraceLink and special guest David Colombo of Eli Lilly recently gave a detailed explanation of the deadlines and the operational and technical requirements for companies in the supply chain with respect to China serialization and traceability reporting compliance.

You can watch a streaming replay here: China Serialization Webinar

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The Director General of Foreign Trade (DGFT) in India has announced that India has deferred primary level (e.g. blister pack) barcoding for track and trace of exported pharmaceuticals one year to July 1, 2014. The original date of implementation for this requirement was to have been July 1, 2013.

This was the third phase of serialization and barcoding of pharmaceuticals manufactured/packaged in India and destined for export. The previous two phases for tertiary and secondary (unit or package) level serialization were implemented in 2012.

The DGFT described the change in the public notice no. 54(RE-2012) published on April 5th. Link to the notice. Navigate to the Public Notices section, Public Notices 2012-2013 and click on the link for notice 54(RE-2012)/ 2009-2014,

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Brazil has announced a new drug serialization and traceability system. The National System of Drug Control proposal published this week by ANVISA essentially provides for serialized drug identity and supply chain-wide drug traceability from production to dispensing where each node in the supply chain maintains their own database of product and transaction information.

The proposal has a 180-day implementation timeline for manufacturers and 1 year for the rest of the supply chain participants, to start upon publication of the final regulation. The proposal is now open for a 30 day comment period with final publication date to follow at some point thereafter.

Complete analysis of the serialization and traceability requirements is underway but below is an initial snapshot of the scope of the proposal.

Key Provisions

• Serialization: Serialized identification on secondary packaging (and hospital packs), using a 2D DataMatrix, which includes ANVISA drug registration number, unique randomized serial number, lot number, expiration date. These combine to form the ANVISA Unique Identifier of Medicines (IUM).
• Supply Chain Transactions: Tracing and capture of all product movements from point of manufacture to point of dispensation at pharmacy, including reverse logistics. Importation and transportation is also mentioned in the draft proposal although it is unclear exactly how these movements are to be captured.
• Manufacturer: Maintain in a database the following information: IUM, identification number (CNPJ) of drug recipients, identification number (CNPJ) of carriers, date/type of drug movement, logistical packaging identifier
• Distributor: Maintain in a database the following information: IUM, identification number (CNPJ) of companies shipping product to distributor, identification number (CNPJ) of companies receiving product from distributor, identification number (CNPJ) of carriers, date/type of drug movement, logistical packaging identifier
• Pharmacy: Maintain in a database the following information: IUM, identification number (CNPJ) of companies shipping product to distributor, identification number (CNPJ) of companies receiving product from distributor, identification number (CNPJ) of carriers, date/type of drug movement, logistical packaging identifier
• Data Archival: Two (2) years after the expiration date of the drug product

Note: Although the official document mentions serialization at the secondary packaging level, it also specifically defines that the Unique Identifier and Serial Number should be encoded on the smallest unit of product marketed in Brazil. So this implies item-level serialization.

Here is the official ANVISA announcement link.

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The GS1 Healthcare US Secure Supply Chain Task Force, the leading organization developing standards for pharmaceutical traceability and including more than 50 industry participants (including TraceLink), published on March 11, 2013 an initial implementation guideline for serialization and traceability of pharmaceutical products using GS1 identification numbers.

The guideline titled “Applying GS1 Standards to U.S. Pharmaceutical Supply Chain Business Processes to Support Serialization, Pedigree and Track & Trace”, is designed to help pharmaceutical companies and their supply chain partners prepare for upcoming state (California 2015) and potential federal regulations governing the serialization, ePedigree and traceability of drug products in the United States supply chain.

The guideline acts as a summary of current learnings from companies across the industry, providing an initial baseline to help companies design their systems and supply network preparation plans for compliance. The guideline includes information on:

• Product serialization standards and identification concepts (GLNs, GTINs, SSCC identifiers)
• Data carrier options for encoding GS1 information (Barcodes, RFID tags)
• Supply chain data exchange for pedigree and traceability (EPCIS concepts, interoperability considerations)
• Pilot learnings and best practices

Here is the link to the official announcement by GS1.

Here is the link to the Implementation Guideline by GS1.

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The California Board of Pharmacy has posted the agenda for the upcoming 3/14 meeting of the Enforcement Committee and Public Meeting on E-Pedigree.

E-Pedigree Agenda Topics

• SNI: Update on proposed regulations to implement serialized numeric identifiers
• Grandfathering: Update on proposed regulations for identifying drugs which may be shipped into CA after the Jan 1, 2015 deadline without serialization and ePedigree
• 50 percent calculations: Proposed regulations on calculating the 50 percent of products each manufacturer must serialize and ePedigree by Jan 1, 2015
• Inference: Update from the Board on their proposal for regulations concerning the use of inference. Read our notes from the Feb. 2013 BoP meeting on Inference.
• Drop Ship: Discussion on the use of drop shipments in the supply chain and their ePedigree requirements
• Implementation Timelines: Presentations and questions from pharma supply chain participants on their readiness to meet the staggered implementation timeline as laid out in California state law
• Certification Process: Discussion on the certification process to comply with the ePedigree law

TraceLink will be there capturing the discussion and providing a summary for our industry friends. Here is the link to the official PDF of the meeting and agenda.

NOTE: Our CA Board of Pharmacy LIVE Q&A webinar (3/20) will bring out many of the answers and discussions which went on at the meeting. So join us!

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CA Board of Pharmacy Feb 2013 Mtg: Inference in Pharmaceutical Supply Chain Discussion

TraceLink was at the Feb 2013 meeting. The focus: discussions on potential rule-making for managing inference in the California ePedigree/serialization regulations.

Key takeaways:

• BoP supports inference. Their stance was somewhat uncertain to this point
• BoP continues to struggle with understanding the issue deeply enough to make “fair” rules
• BoP will now take the lead in proposing rules (see below) but expects significant industry engagement to finish quickly
• Look for March 14th in SoCal as a key date for discussion
• The undertone in the room was that the BoP expects industry will meet the 1/1/15 deadline

Concerns raised:

BoP stated that the officially submitted comments (19 of them) have been helpful to the BoP in understanding the need and desire at a high level. Commentary around using GS1 standards, 2D barcodes, etc. was pretty common across many submissions. Key sticking points remain though:

• Lack of deep knowledge by BoP on technical, data and business process issues
• Recommendations on standard operating procedures (SOPs)
• How to manage liability in the supply chain when inference breaks down

BoP voiced concern that it doesn’t feel it has enough insight on the above three issues to create fair rules that balance patient safety with operational efficiency. The BoP hoped that the industry would coalesce around a detailed set of rules on inference that the BoP could start with.

Inference proposal:

Virginia Herold is now taking up the banner. She proposed some “core elements” to use as a foundation for inference rules. These will be refined in the next few weeks and discussed in March. The highlights:

• When homogenous cases are received from the manufacturer, identity can be inferred (case-item) as long as a business relationship exists between mfg and distributor
• If case stays intact, it can be shipped straight through w/o opening
• If case is broken, units must be scanned to validate the inference
• This inference can continue through multiple hops
• BUT, if inference is used, at some point in the supply chain, that inference must be validated by scanning the units. I.e. no units can go into a case and blindly pass all the way through the supply chain
• There must be SOPs to remediate and correct any deficiencies found when the inference is validated after the case is open
• Inference rules must handle both normal distribution paths as well as direct to pharmacy chain scenarios
• Allocation of liability will need to be specifically defined if a problem in the inference chain is found farther down in the supply chain (i.e. pharmacy finds problem with unopened case)

Other key areas such as exception management weren't addressed by the board.

All in all...a pretty narrowly focused set of discussions.

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Every five to ten years there is a disruption to the Enterprise IT infrastructure which generates significant business value and undermines current operating models. Some of us are old enough to remember the introduction of desktops, ERP and the Web, technologies that eventually became indispensable in our daily business lives. Now CIOs have the next great opportunity to change the game for their companies with the Cloud. In working with companies large and small who are adopting the TraceLink Business Cloud, we recognized that CIOs need to be engaged in the definition and implementation of this new strategic direction.

At the heart of the transformation is the dramatic change it will have on IT spending. Gartner recently released its Worldwide IT Spending Forecast. Overall IT spending for the $3.5 Trillion industry is forecast to increase 3% in 2012. The table below also clearly demonstrates that in the current IT model, enterprise software is only 5.8% of expenditures. The software that runs the business requires significant ongoing investment in computing hardware, IT Services and Telecom infrastructure.

At the core, the Business Cloud represents an opportunity to transform the computing, application and collaboration model for how business is conducted. CIOs need to distinguish true Cloud solutions that utilize the global computing utility model, such as the TraceLink Business Cloud, from the rebranded SaaS providers that call themselves the “Private Cloud”. The economic and technical benefits of these “designed for the Cloud” applications are based on leveraging and enhancing the globally elastic computing utility model. The challenge for CIOs is moving the company in this direction while recognizing that current and future investments in their own or a business partner’s computing infrastructure will shrink. The Cloud provides such flexibility that CIOs no longer have to amass large, fixed IT budgets to deliver the capabilities that business owners require.

The next layer of value is the application deployment and delivery model. True Cloud applications for the business are always ready to use and quick to integrate. The new application model eliminates the need to spend years to configure, customize, integrate and deploy. Even the administration model is more user-driven and less centrally managed by IT. The model poses a challenge for IT departments and Systems Integrators whose budgets for a Cloud-based solution are 1/10th or less than that for a legacy on-premise approach. CIOs need to champion true Cloud applications even with resistance from internal departments and business partners whose interests are not fully aligned with the business opportunity for the company.

The final and most important strategic decision is to identify the unique solutions that define the Cloud initiative. Just as Web 2.0 was defined for consumers with collaborative applications such as Facebook, Twitter and Pinterest, business network collaboration will drive the innovative new value from the Business Cloud. For decades, enterprises have spent millions and in some cases a billion dollars establishing an ERP infrastructure to streamline internal processes. Today, however, business success is defined by how well you manage your extended business network, not just your internal operations. Yet “external collaboration” on this network is still driven by point-to-point email or portals that lack any cross-company or cross-function transactional collaboration capabilities. By driving supply chain collaboration through a Business Cloud, product, information and financial flows of the company become frictionless and adapt rapidly to market and operational changes. The best aspect of this strategy is that it greatly enhances the value of the ERP investments made over the last few decades by feeding these systems the network-wide data they need.

Gartner (http://www.gartner.com/technology/research/it-spending-forecast/) is predicting Public Cloud spending to grow at 18% a year which is 4 times the current spending growth projected by overall IT. The Public Cloud service market is expected to hit $200 Billion by 2016. This would put the market on par with the Enterprise Software market.

Once again CIOs are on the forefront of driving strategic value for the business with the Cloud. CIOs must lead this transformation since the status quo with their organizations and their IT business partners will be impacted.

NoBullWhip!

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Let me first say that I like SharePoint. We use it here at TraceLink for internal document sharing and it works pretty well. Let me also say that it is an absolute failure for external collaboration. Time and time again we meet companies who were convinced to use SharePoint for external collaboration and the topic evokes very strong emotions. Everyone hates it! Yes, the emotions are that strong.

Our discussions are primarily with Quality, External Manufacturing, Contract Manufacturing and Contract Packaging organizations. The users were told that SharePoint would address the need to collaborate across companies for Batch Record Reviews, Events and Deviations, Change Control, Forecast Collaboration and many other supply chain processes between partner companies. The harsh reality of using SharePoint for these purposes is a loss of productivity and more error-prone processes at greater costs.

Here are the top 5 statements/feelings customers share about SharePoint:

“SharePoint is a Graveyard for Documents.” This statement cuts to the heart of the problem. It is not enough to just share documents, but users need to engage in shared supply chain processes. Right now documents are placed in folders and forgotten. Then there is the mess of trying to organize folders and versions of documents in a manner that aligns with the process state (“where am I in the Batch Record approval process and which are the right documents?”) as well as managing multiple processes (“which batches are still open for approval and which ones are historical”). Due to all of these issues documents go to SharePoint and die!

“SharePoint is a Nightmare to Manage.” No IT person wants the thankless job of managing the on-going security and administration issues created by SharePoint. It is a pointless effort to try to manage user access for individuals who are NOT your company’s employees. Not only do people join and leave your partner’s companies but the members of the teams are changing. So managing credentials and access control is a constant headache. Not to mention the issue of sending a physical security token to all the users at your partner companies. Security policies require these physical tokens to be accounted for on a quarterly or annual basis, requiring IT to verify that employees not at your company still need access to your SharePoint server. What an administrative nightmare!

“SharePoint is Less Productive than Email.” The main issue for business users is that they are working with multiple partners simultaneously. Every time they need to share documents they need to use a different security token and log into a different SharePoint server at the host partner company. As if that wasn’t bad enough, then file upload takes a very long time since the servers are hosted inside your partner’s firewall. This is the equivalent of logging into a different email system and waiting until the file arrives at their company server before you can “send” a document to the next company. Every person loses hours of valuable time every day!

“SharePoint is Expensive.” SharePoint has the same financial traps as most large client-server applications. While the base license seems reasonable, it is the tractor trailer that comes with it that drives the price way up. In order to deploy SharePoint for external collaboration an installation will need SQL Server database licenses, multiple servers to host the core system, additional servers for disaster recovery and even more servers for your partners to use outside of the core IT infrastructure. So not only are the base deployment costs high but the cash register keeps ringing because of the performance issues. SharePoint requires large recurring IT budgets!

“SharePoint Projects take Forever to Complete.” In order to address all the feature and architecture shortcomings there is now a sub-market of Value Added Resellers and Systems Integrators ready to deploy, customize and integrate SharePoint. These projects add to the cost and time to realize any value. Unfortunately most of these projects cannot produce the value sought by the users. SharePoint is just not the right starting point for meeting the user’s needs!

At TraceLink we took an approach to leverage the Cloud and create a solution for external collaboration that enables the supply chain to collaborate on processes within minutes with full security and exactly the functionality needed for the business. We provide live business processes, with team-based user management, a single login for all your external party collaboration, very-low subscription pricing and no customization or deployment costs required.

Register and access a free trial right now to see for yourself. Or, visit our product overview to read more.

NoBullWhip!

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In the last five years we have seen a very rapid growth in recalls and drug shortages. The ramifications are not only a lack of life saving drugs for patients but also a rise in drug prices and counterfeiting. The recent issues with Avastin counterfeits and Doxil supply shortages clearly indicate the problem is growing and becoming more life-threatening. The situation keeps getting worse and the root causes need to be understood and addressed.

In parallel, we have seen the biopharmaceutical supply chain undergo massive changes based upon a fundamental change in the business model and organizational structure. Historically, biopharmaceutical companies were predominantly vertically integrated where they owned their own active pharmaceutical ingredient and bulk product manufacturing plants as well as their own packaging plants. In recent years, however, supply has become globalized and production virtualized. This has rapidly created a significant increase in the inherent risk in the supply chain. Products can now be manufactured in stages from all over the world and through a network of complex relationships. While the manufacturing network has grown in complexity the global distribution network has substantially grown in volume. China, India, Brazil and Turkey are all major growth markets, however their distribution networks are inherently vulnerable to diversion and counterfeiting. The US and EU markets are also threatened by the larger global distribution market with the diversion of counterfeits through importation or distributors engaged in illegal practices.

In order to address the growing risks in the supply chain, biopharmaceutical companies need to maintain the oversight of and collaboration with manufacturing partner companies as if they were their own plants. Many urge even greater visibility and tracking since partner companies have to manage the needs of multiple customers simultaneously. Coordination and visibility across the entire production lifecycle, including visibility into production status, quality reviews, material availability and current inventory levels, are essential to maintain the supply of quality products to the market. From a distribution perspective, China, India, Brazil and Turkey are now requiring both serialization and track and trace of products. The goal is to empower the pharmacist, the clinician and even the patient with the tools to verify the authenticity of the product before dispensation or administration. The US and EU are also moving towards comprehensive adoption of serialization, track and trace with authentication.

At TraceLink, we are working with major biopharmaceutical companies to address the need for superior collaboration, visibility, track and trace in order to achieve the supply quality, capacity and integrity required by the industry. Our approach is to create tight collaboration between supply planning, quality, logistics and manufacturing across companies in order to deliver quality products on-time and in-full. Our track and trace solutions use emerging GS1 standards being adopted by almost all countries for ePedigree and authentication delivered either through enterprise integration or mobile solutions available to patients via iPhone, Android or SMS phones.

With rapid adoption of the solutions that the industry has been developing, we can eliminate drug shortages and counterfeits from our global supply chain.

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Most people know that I spend at least 60% of my time in the field with customers. For instance, this week I will be in the office on Monday and the rest of the week listening and working with customers to solve their problems. The source of all our innovation comes from customers. Many are fond of telling me when and where we thought of that specific feature or capability.

As I was reflecting on my past few weeks of fairly intense travel and interactions, it became clear to me that the pace, magnitude and criticality of change at our Pharma/Bio customers is accelerating. The reality of $267 Billion of product sales losing patent protection over the next 6 years has shifted from planning for the impact to executing on a strategy to lead the organizational changes at the company. One thing is certain; there are no magic bullets since there are no new blockbusters that will fill the large revenue holes.

In the last five years, there have been many strategies openly discussed and shared within the industry. Therefore there is no secret strategy that one company has as its secret sauce. The following press release, IMS Forecasts Global Pharmaceutical Market Growth of 5-8% Annually through 2014, indicates the approaches the industry will take for continued growth. These strategies include:

• Growth from emerging markets
• Personalized medications and complex therapies
• Graduated approvals with on-going evidence of outcomes

The supply chain organizations are the most impacted by these changes, because they need to transform. A recent PwC report, Pharma 2020: Supplying the future, concluded by saying: “The supply chain is simultaneously becoming more important, as the medicines the industry makes get more complex and the opportunities for generating value from pure product offerings diminish”. These changes thrust the supply chain organizations into a strategic role within their company.

In all cases, the transformation of the supply chain involves driving more visibility and collaboration upstream all the way to raw materials suppliers, downstream to patients and across geographies into emerging markets. Here are some quotes from the field that demonstrate the imperatives:

• “The company is banking on emerging markets for revenue growth and we need to ensure secure distribution”
• “Emerging markets have 10x the counterfeiting and diversion and the trust factor is material to our revenue opportunity”
• “Three out of five new product launches this year will be with products manufactured by outsourced providers”
• “We need to track outcomes in order to enter the market and maintain FDA approvals for most new medicines”
• “We want to be at the center of our virtual network and have all our partners connected to us with real-time visibility”

In the technology industry, we went through a similar stage for personal computers when the value of product innovation merged with the value of operational excellence. Dell and HP emerged as winners because they were able to combine product innovation with supply chain execution excellence. Change and transformation was not a matter of optimization but a necessity for survival.

Of the companies we work with, the ones that understand the moment are moving at a fast pace with determination that clearly sets them apart as leaders. They recognize that change is accelerating and Wall Street is very unforgiving of execution failures. Traditional and safe decisions are not acceptable when they don’t deliver the results necessary for the business. There is no buffer for mistakes or being a year behind.

At TraceLink, we are embracing the change and working with the industry to support their transformation. The velocity of the transformation will hit higher levels every day and we will be there with you delivering the visibility and collaboration your business needs.

NoBullWhip!

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