Improving the traceability of products within the pharmaceutical supply chain

Send to friend

INFORMATION: Free information is available from MANHATTAN ASSOCIATES on the subject in this story. Click here to request a copy

Companies in the pharmaceutical industry are under increasing pressure to control their products and their brand better. Product counterfeit or diversion, theft or illicit use, are just some of the challenges that drug manufacturers and distributors currently face. It is unsurprising therefore that improving the control of products through their lifecycle in the supply chain, up to the point of sale, has become a quest for many. 

Pharmaceutical industry giants such as Novartis, Pfizer and GlaxoSmithKline are motivated by the billions of dollars  of lost sales they suffer every year due to drug re-entry from lower price geographic regions into higher price ones and grey markets in countries where drug controls are not as strict and drug mafias operate free of control.

Radio frequency identification (RFID) can play a significant role in helping these companies. By deploying an RFID hardware infrastructure in a closed-loop supply chain environment, and by implementing suitable RFID solutions to collect, process and share RFID data, organisations in the pharmaceutical industry can control their products more effectively. RFID tags containing a unique identification can be attached to either individual products such as a folding box or a bottle, or containers (bundles, boxes, pallets, etc.) higher up in the packaging hierarchy. These tags can then be read at different stages, from packaging and throughout distribution.

Critical activities such as recall or diversion were simulated to highlight the value of the [RFID] track and trace system.

This functionality will enable the collection of specific item-level data; moving away from product reference and quantity to a list of individual EPCs (Electronic Product Codes) that give the granularity required for effective tracking and tracing. In theory, this could be achieved by using serialised bar code technology. However RFID is being seen as the technology of choice as it is able to collect data in a far more accurate and efficient way.

Demonstrating RFID feasibility and value

The JumpStart initiative carried out in the United States achieved exactly this. During an eight month trial, a network of 14 companiespharmaceutical manufacturers, wholesalers and retailersparticipated in the largest track and trace initiative to date. Bottles and cases of selected drugs were tagged and then traced throughout their supply chain journey by using RFID applications. Product pedigree information was accessed in real-time through a trading partner management application via a web portal. Critical activities such as recall or diversion were simulated to highlight the value of the track and trace system. Unknown or missing products, as well as those whose expiry date were soon to be reached, were automatically singled out and dealt with. Similarly, batches of products were easily recalled as the location of the products was always known.

The JumpStart initiative demonstrated the feasibility and value of RFID in collecting events at item level in order to achieve near real-time visibility. More importantly it demonstrated that 14 companies from the same industry could work together and share data on the basis of a common infrastructure to reach their shared goals of:

  • Adhering to regulatory guidelines (FDA and state specific laws) to monitor product security and authenticity
  • Overcoming economic pressures to decrease lost sales through effective anti-counterfeit, anti-diversion systems.

It is therefore important for organisations in other verticals to look at the tactics some pharmaceutical giants are pioneering, in order to adopt them themselves.

For companies facing these challenges, the business benefits for track and trace solutions are readily apparent. As the validity of the concept continues to strengthen, future initiatives in the pharmaceutical market will look more at evaluating the technology required to support the business needs. A debate is currently taking place about High Frequency RFID verses Ultra High Frequency and what the tradeoffs of each are especially when faced with the additional costs that would be required to implement both. Consideration also needs to be made for the security and authentication required to enable this data to be shared with the trading partners that need access, while restricting access to others. These are the issues that need to be resolved through the work of key pharmaceutical companies working with international industry consortiums and trade associations.

In summary, there are numerous actions that pharmaceutical companies can take to both monitor their products better in real-time and gain efficiencies and increased sales through better stock control. Implementing RFID and an effective inventory visibility solution is one of them.

The challenges that need to be overcome in the pharmaceutical industry are a combination of those that other industries face, particularly the luxury goods and food industries. Parallels can be drawn from the fact that pharmaceutical products are expensive, although not priced uniformly throughout the world, they are highly imitable and last but not least, they are perishable. It is therefore important for organisations in other verticals to look at the tactics some pharmaceutical giants are pioneering, in order to adopt them themselves.


Vincent Menvielle, head of RFID for EMEA, Manhattan Associates. Menvielle has made RFID his specialty for the last 2 years, first with Deloitte & Touche in their Supply Chain UK Consulting division where he spent several years as a management consultant, then with Manhattan Associates, where he currently manages RFID activities across the EMEA region. Vincent holds an MSc in Information Systems (Brunel University) and an engineering degree from Ecole Centrale de Lille.


 

INFORMATION: Free information is available from MANHATTAN ASSOCIATES on the subject in this story. Click here to request a copy

Comments (0)

Add a Comment

This thread has been closed from taking new comments.