Supply Chain: Scanning the Future - Pharmaceutical Executive


Supply Chain: Scanning the Future

Pharmaceutical Executive

Biggest threats to the supply chain

Counterfeit pharmaceutical drugs are becoming more and more prevalent around the globe—as counterfeiters become more sophisticated it becomes increasingly difficult to tell the difference between a counterfeit product and the real McCoy, especially at first blush. While there will always be a black market for prescription drugs, the adoption of stricter tracking of pharmaceuticals as they cycle through the supply chain will make it tougher for counterfeits to make their way into the legitimate trade.

UPS's 7th annual "Pain in the (Supply) Chain Survey" polled healthcare executives across the globe on their top business and logistics concerns. According to the report, 48 percent of those polled believed that counterfeiter sophistication is growing faster than countermeasures. In Asia, 76 percent of those polled were concerned about product security, significantly more than their peers elsewhere.

"As more and more companies are moving into the Asian, Latin American, and African markets, the length of the supply chain and the handoffs have increased," William Hook, vice president, global strategy, healthcare logistics at UPS said. "Every time the chain is increased you leave a vulnerable point."

As the supply chain lengthens in a global marketplace, the possibility of theft increases as well. While most would agree that the supply chain in the United States is relatively secure from theft, the same cannot be said of other areas of the globe.

"On a percentage basis, pharmaceutical theft in the supply chain is not high," Hsieh says. "What is interesting is it is usually one of the higher value products that are stolen. There was a high of several million dollars per theft incidence a couple years back. Then many pharma companies put a limit on the amount that can go out in one shipment. Last year the average pharmaceutical cargo theft was valued at about half a million dollars."

Be Proactive—and Think Small

In anticipation of serialization legislation taking effect, pharmaceutical companies need to review not only their own internal practices, but also those of their outsourcing partners. As more and more work is outsourced the possibility for mishandling of product becomes greater and greater, and the need for technology solutions for both sides of the outsourcing relationship becomes more evident.

"We are seeing OEMs who are struggling with small contract manufacturers who don't have systems that can facilitate the sharing of product information," John Danese, senior director, life sciences at Oracle says. "I have spoken with some of our OEMs who are preparing for the California ePedigree regulation and other global track and trace regulations. They say some of their CMO's idea of an advanced data sharing mechanism is a fax machine. Additional electronic communication is needed moving forward as these regulations come online in order for these small companies to be able to exchange the necessary data."

The global pharma supply chain continues to grow with each passing year. With every additional link in the chain greater risk follows.

Timothy Denman is Pharm Exec's Senior Managing Editor. He can be reached at


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