Globalization is impacting most industries, and the pharmaceutical industry is no exception. On the positive side, globalization has enabled the industry to enter markets all over the world and provide life-changing medicines to millions of patients. With the benefits of globalization, however, come significant challenges and responsibilities.
One unintended consequence to globalization is the creation of drug shortages. Even though new drug shortages have been on the decline since a peak in 2011, the issue of drug shortages remains a serious one: when drug shortages occur, some of the most vulnerable among us--sick patients--are profoundly affected.
How do drug shortages affect patients? Most commonly, they result in patients using alternative medications or treatment delays. Drug shortages also can lead to longer hospitalizations, treatment failure, and even death (1).
Simply put, the human cost of drug shortages is unacceptably high. The industry must do more to ensure there are adequate supplies of medicines for patients when they need them.
Many factors contribute to drug shortages. These include manufacturing delays, quality problems, loss of a manufacturing site, and issues with raw materials (2). Raw materials issues, including shortages, account for 9% of all drug shortages (3).
Factors affecting the quality and availability of raw materials include natural disasters, geopolitical movements, and variability. Variability in raw materials is a key issue in the supply chain. Inconsistencies such as raw material solubility, bioburden, and residual metals and impurities in animal-derived excipients can lead to manufacturing delays, impact product quality and immunogenicity, and, ultimately, affect the safety and supply of medicines. Even the smallest change in a raw material can have a measureable impact.
Another crucial factor affecting the supply chain is adulteration, or the deliberate or accidental contamination of materials, which was the case in 2008 when more than 12 manufacturers unknowingly purchased contaminated heparin, an anticoagulant that had been sourced in China (4). There were 246 reported deaths in the United States following use of heparin between Jan. 1, 2007 and May 31, 2008 (5).
Adulterated materials not only can have a devastating impact on product safety, but also can affect patients in other ways. Poor manufacturing and quality along with inadequate preparation for events that affect the supply chain can cause increased competition for inventory, capacity, and freight lanes, leading to customer shipment delays. When companies take a proactive approach, they can minimize the response time and investment required to mitigate supply-chain issues and also reduce the downtime that results from those issues.
Efforts to Address Supply-Chain Issues
The Drug Quality and Security Act (HR 3204) was signed into law on Nov. 27, 2013 and outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs in the US. The act, which will be phased in over 10 years, includes requirements for product identification, tracing, verification, detection, and response notification systems, wholesaler licensing and third-party logistics provider licensing (6). Ultimately, the electronic system will provide information at the individual package level about where a drug has been in the supply chain. Despite this, no pedigree requirements for upstream supply-chain security have been implemented.
Rx-360, a not-for-profit pharmaceutical and biotech industry consortium, formed an Upstream Supply Chain Security working group in June 2013 to educate and inform policy makers, regulators, and industry professionals about supply-chain security issues. Rx-360 conducted a survey in August 2013 to understand the industry’s concerns related to upstream supply-chain security (4). Survey respondents represented more than 80% of the largest global pharmaceutical companies by revenue.
The survey showed that while 75% of respondents have a formal supply-chain security focus, as many as 44% do not use supply-chain mapping documentation for some or all of their materials to make sure these materials are not adulterated or misbranded. Supply-chain mapping is an important tool to understanding the origins of raw materials, particularly given the international scope of supply chains.
Nearly one-third of the respondents reported they do not feel there is alignment between pharmaceutical manufacturers and their suppliers. Furthermore, only 45% of those surveyed go as far back as their supplier’s supplier when ensuring supply-chain safety.
Mitigating Supply-Chain Risk
Companies must increase their understanding of the total supply chain. Leveraging best practices from other industries such as the automotive industry, biopharmaceutical companies should develop processes that ensure both optimal quality materials for medicines and a company’s ability to quickly respond to issues. The following three key areas may be focused on to increase understanding of the total supply chain and help mitigate risk.
A cross-functional team comprised of dedicated leaders for each category (such as basic chemicals and pharmaceutical glass containers) drives strategies linked to the specific needs of that category, prioritizes based on those strategies, and unifies supplier direction and management. The team also integrates approaches to specific category risks, provides oversight to all suppliers, and increases knowledge management capability and expertise. Category leaders are supported by a core team of staff from supplier quality management, product development, global strategic sourcing, and manufacturing departments. These cross-functional teams are built for key suppliers to focus on technical issues, optimize the supply chain and product quality, and build long-term relationships.
Focused work streams by category--similar to the approach used successfully by the auto industry--help to improve quality, increase reliability, and decrease variability. The work stream framework consists of intense technical engagement to increase understanding of the attributes, manufacture, use, and interactions of raw materials, to optimize the transparency and synchronization of the supply chain. The goals of the focused work streams are to improve line of sight, lot definition, reliable supply, plus optimize inventory, and reduce waste. Close collaboration with well defined teams and continued engagement of executives results in robust relationships with suppliers. Paramount to the success of these relationships is shared goals, regular executive reviews, clear communication channels, two-way feedback, and shared benefits. Managing supply from a quality and security standpoint includes an up-front definition of requirements (i.e., audits and a supplier quality agreement) when selecting and approving suppliers. Once a supplier is selected, processes for material qualification and approval (e.g., development, classification, qualification, and commercialization) are defined. Systems for supplier selection and approval as well as material qualification and approval are monitored for continuous improvement. Supply-chain security audits may also be performed with specially trained auditors looking for vulnerabilities in the supply chain.
Technology can enable end-to-end raw material supply-chain monitoring around the clock, enabling rapid risks assessment and event recovery. Amgen developed a platform that allows for input from the company about suppliers, products, and part sourcing; input from suppliers about site locations, part origins, emergency contacts and alternative sites and recovery; plus other inputs such as location risk scores, supplier financials, and public information. This platform gives time to recover from a significant event affecting the supply chain and enables the company to put a higher quality disaster recovery plan into place. Industry notifications such as those from Rx-360, which provide global alerts on issues affecting the healthcare supply chain, together with alerts tailored to companies based on the specific commodities they use, can reduce the time it takes to assess the impact of an event and minimize resources used. In the future, alerts on companies’ affected manufacturing sites and raw materials will enable the industry to more quickly assess impact and put plans into action that address affected resources. While it will take time, highly specific alerts will eventually become the norm as more companies expect this level of transparency.
Working Together as an Industry
There are several ways the industry can protect the global supply chain. Many companies in the biopharmaceutical industry are collaborating with Rx-360 to address the current challenges with the global supply chain by sharing information, audits, and best practices, and by creating industry-wide standards.
Some of the opportunities for creating industry standards that have been identified through the Rx-360 collaboration include:
- Creating and refining unique and foolproof material identification processes such as tamper evident packaging, use of watermarks, and photo libraries to identify packaging deviations
- Audits and documentation procedures for change control, business continuity, spec approval, chain of custody, quality agreements, and product dossiers
- Systems and communication including electronic audit trails and records, advanced shipping notifications, supply-chain mapping, end-to-end inventory management, testing optimization, and monitoring end-to-end variability.
Biopharmaceutical companies and their suppliers minimize raw-material variability by collaborating and sharing data. Working together, the industry can better understand the sources of impurities from raw materials and the manufacturing process, validate manufacturing processes with adequate process capability, establish appropriate controls by conducting raw-material characterization, and improve raw-material specifications. Becoming more engaged with suppliers through technical visits, supplier relationship programs, and more effective audit programs are also important to minimizing raw material variability across the industry.
The privilege of serving patients comes with significant responsibilities. These responsibilities include ensuring patients receive safe, quality medicines in a robust and reliable manner. Industry players can work together on proactive approaches that drive continuous improvements in the raw-materials supply chain, ensuring that patients receive trusted medicines without compromising quality and availability.
1. M. McLaughlin, et al., Care Pharm. 19 (9), 783-788 (2013).
2. J. Woodcock, M. Wosinska M. Clin. Pharmacol. Ther. 93 (2), 170-176 (2013).
3. US Government Accountability Office, Drug Shortages: Public Health Threat Continues, Despite Efforts to Help Ensure Product Availability: Report to Congressional Attendees, GAO Publication no. GAO-14-194 (February 2014). Accessed May 19, 2014.
4. C. Calvert, et al., Rx-360: An International Pharmaceutical Supply Chain Consortium. (2014) Rx-360 Upstream Supply Chain Security [White paper], accessed May 22, 2014.
5. FDA, Drug Safety and Availability. Postmarket Drug Safety Information for Patients and Providers: Generic Enoxaparin Questions and Answers.
6. FDA, Drug Supply Chain Security Act (DSCSA): Title II of the Drug Quality and Security Act of 2013, accessed May 14, 2014.
About the Author
Martin VanTrieste, R.Ph., is senior vice president of quality at Amgen. He is the founder and first chairman of Rx-360 and is currently on its board of directors, email@example.com.