Strategy for Security - Pharmaceutical Executive


Strategy for Security

Pharmaceutical Executive

Q: There have been reports of shady H1N1 sales and distribution. Is your group looking at how to secure a supply chain when a drug is rushed to meet a pandemic?

A: When the swine flu pandemic started to heat up, we worked with an organization that did an analysis of what would happen if there was a swine flu pandemic. We looked at where shortages would occur that would affect the pharmaceutical industry due to the demand for the vaccine. This included examining potential shortages to our raw materials, refrigerated storage, refrigerated transportation—to move the vaccine around in a pandemic—and how that would impact manufacturing other life saving products.

That analysis was shared with our members; hopefully members used that information to look at their supply chains and prepare for such an event. That's the kind of things we do on the surveillance front.

Q: What about some of the new technology you are working on?

A: We are looking at new tools that can help prevent someone from adulterating products in the supply chain, and how to detect adulteration if it occurs.

For example, there was a shortage of a raw material called acetonitrile, due to the downturn in the global economy. Acetonitrile is a by product of plastics manufacturing. When the auto industry started to go downhill, production of acetonitrile went downhill, too. There was a big shortage in the marketplace, and prices of acetonitrile, for a period of time, spiked at about ten times the normal price.

We got a group of scientists together who sat down and said, "If I wanted to take advantage of this situation, what would I do to adulterate, to cut, to substitute for acetonitrile?" They came up with a lot of different scenarios and mechanisms to do that. And then, another group of scientists sat down and said, "Okay, using that information, how would I detect it?" They developed a fairly simple, analytical method for the detection of adulteration of acetonitrile. We shared that openly; it's posted on the Web page, which any company can access.

Q: Your site mentions that this year's goal is to boost the sharing of supplier auditing information between the pharmaceutical companies. How is that going?

A: Today, each pharmaceutical company has a list of suppliers. We go out and we audit those suppliers from good manufacture and practices standpoints, and then work with those suppliers to fix and improve anything that we think needs to be taken care of. But it's a very labor-intensive and inefficient process. If you are a large supplier to the pharmaceutical industry, and have hundreds of customers, you receive hundreds of audits a year, and as a practical matter, you have to limit the time a pharmaceutical company can come in and actually do an audit of your facility.

We spent a lot of time trying to develop models in which a supplier would be willing to allow the pharmaceutical industry to collectively come in and do an audit. This reduces the number of audits that a supplier would have to entertain. But, more importantly, it allows the pharmaceutical company to spend more time and look at more things.

At the end of the day, the pharmaceutical company gets more information on their suppliers, so they can make better decisions about the acceptability of that supplier based on their internal procedures, policies, and their individual products. And the supplier gets the benefit of reducing audit-fatigue—the non-stop stream of customers coming in and doing audits.

Q: What are some of the challenges or growing pains that the group had to overcome?

A: Any time companies get together like this, you have to be concerned about antitrust, anti-competitive laws around the world, and we have counsel helping us through that. They are also working with us to get through some of the cultural paradigms that we have in the pharmaceutical industry that are different. We have to assure suppliers that by doing this, it creates a win for them.

Q: One of reasons Rx-360 was created was because of the global outreach nature of the industry. Is the consortium worried pirates on the open seas and pharmaceutical theft in emerging nations? Are you looking into security at that macro of a level? Are you trying to secure the supply chain and materials from, say, militias?

A: We are. We're treating it as a global issue. If a criminal took $1,000 and counterfeited Rolex watches, DVDs, purses, and consumer products, they could turn that $1,000 into $10,000. If that same criminal, got into the illegal drug business, they could turn that $1,000 maybe into a $100,000. But if they counterfeited pharmaceuticals successfully, they could turn that $1,000 into $1,000,000.

There's economic incentive for the criminals to do that, and the criminal penalties for counterfeiting a pharmaceutical are significantly less than the criminal penalties for dealing in illicit drugs like cocaine or marijuana. So, you have a higher economic gain with less risk if you get caught. What we've seen is a lot of criminals starting to enter into the supply chain.

There is a risk to the US marketplace, because people are talking about importation of pharmaceuticals from Canada and a threat from Internet pharmacies, so I think the world's changing very rapidly, and no one's keeping up with the technology. I think it's a matter of time before you start to see a greater penetration of those kind of activities into the United States.

Q: Will the group focus on Internet crime?

A: No, we're focusing on the raw materials that come to us. But the same kind of logic applies.

When law enforcement puts pressure in one space, the criminals move somewhere else. We've seen criminals in the raw materials space—the heparin example was a criminal activity. People intentionally added chondroitin sulfate—over-sulfanated chondroitin—to heparin to make it look like heparin, so they could make more money on every unit they sold. Every gram of heparin they sold, they made more money, because it was cut with a cheaper material. Research shows that criminals have developed their own supply chain, and they run anything that they can make a profit from through that supply chain.

There is a very good documentary, called Illicit: The Dark Trade, by National Geographic, that highlights how a person who buys a counterfeit purse in Manhattan makes money for a criminal element that has a supply chain that's sending contaminated glycerin to Panama, where 90 children died from using a cough syrup that was contaminated with anti-freeze. That's where we're focusing—on those raw materials.

Q:What's the Rx-360 Consortium's end goal?

A: The end goal is to help pharmaceutical companies gain more information. Drug firms can then use that information to make better decisions about how to increase the security of the supply chain and better authenticate the products that go through that supply chain. By working with our suppliers, we can increase the quality of the products we purchase through the supply chain. That's what we're trying to do, and we're working hard to do it.

Q&A MARTIN VANTRIESTE, vice president of quality at Amgen and Rx360 spokesperson


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Source: Pharmaceutical Executive,
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