Managing the Supply Chain

Packaging and labeling technologies can be used to fight supply-chain threats, but they must be part of an overall strategy.

The pharmaceutical industry is no longer defined—or confined—by borders. Manufacturers are sourcing ingredients, materials, finished products, and contract packaging and manufacturing from around the world, and most are seeking to serve patients in multiple markets. The resulting supply chain is a complex one.

“Things are changing,” says Brian Johnson, senior director, supply-chain security, Pfizer Inc. “Markets are expanding, and where we are sourcing materials and manufacturing is changing.”

This complexity brings about challenges. “Manufacturing and processing used to be within a company’s own four walls, but it is a more globalized world now, and there is a real risk of losing product visibility,” notes Jack Henderson, sales director, pharmaceuticals, for SICPA Securink Corp. SICPA provides security ink and other authentication technologies as well as integrated secure track and trace systems. “When visibility is lost, security is lost, and this leads to increased risk.”
FDA understands the risk. Michael Levy, who serves as director of the Office of Drug Security, Integrity, and Recalls in CDER’s Office of Compliance, says that “products entering the U.S. come from new and different markets, flow through long, multistep processes to convert globally sourced materials into finished products, creating complex supply chains.” Vulnerabilities exist in the supply chain, Levy noted in PMP News’s Track and Trace and Authentication Virtual Event in September 2011.
Pfizer’s Johnson sees risks in four areas:

  • Cargo Theft.
  • Illegal Diversion.
  • Economically Motivated Adulteration (EMA).
  • Counterfeit Product.

“We came to the realization that we needed to define the supply chain from end to end,” says Johnson. “It starts with all raw materials and ends when the patient receives the product.” Pfizer decided to develop a corporate supply-chain security strategy to address threats in these areas, building a team with staffers from several diverse job functions, including packaging development, global security, trade, contract manufacturing, and engineering, government affairs, quality control, and logistics.

While Pfizer’s supply-chain security strategy officially kicked off in August 2010, its roots go back years, says Johnson. “Pfizer colleagues around the world have been collaborating and learning from each other for years, but this company-driven initiative now connects them by having them sit on the same team. We are driving improvement throughout the supply chain.”
The strategy is based on performing risk assessments and developing standard practices, Johnson says. But as unified an effort as it is, the collaboration still allows flexibility. “Our businesses are different, and our products are different, so we build our decisions around risk assessment and risk mitigation in given markets,” Johnson notes. “Since the threats are different, and the requirements are different, we developed an adaptive strategy that bases solutions on the individual markets.”

Johnson identifies specific initiatives that Pfizer is pursuing:

  • Enhancing supplier quality management. “Everyone is focusing on such initiatives to prevent another Heparin crisis from occurring, in which the industry saw the occurrence of raw material substitution,” says Johnson.
  • Controlling cargo theft. “This issue has been growing in the United States,” he says. In just two years, from 2007 to 2009, cargo theft increased by 350% in the United States, he reports.
  • Warehouse security. “Companies need comprehensive physical site security programs,” he says, pointing to the break-in at Eli Lilly’s warehouse in which criminals reportedly made off with about $75 million of pharmaceuticals.
  • Outsourcing oversight. “Manufacturers must conduct robust due diligence when picking partners,” Johnson says. “And oversight must be ongoing and robust to manage contract work.”
  • Serialization. “Item-level serialization can strengthen the integrity of the supply chain,” he says.

Henderson of SICPA says that pharmaceutical companies have become increasingly aware of the need to carefully monitor their supply chains. “It is about increasing visibility of the supply chain,” he says.

Combining information technology with packaging-based solutions can give manufacturers that visibility, but Henderson cautions companies to thoroughly monitor their markets. “There is not a single, plug-and-play technology that can stop criminals. The first step is to fully understanding the problem so you don’t just end up throwing technology at it. In my experience, once companies start monitoring the markets they supply to, they find that the problem is much greater in scope. But that better understanding influences their decisions.”

Once manufacturers understand the threats their products face, they can then couple the appropriate track-and-trace and authentication technologies. “Serialization should be a global strategy in which companies put together one program that can respond to mandates around the world rather than one-off approaches,” he says. “Some companies are also looking to do more than just be compliant with mandates by seeing what additional visibility or business intelligence can be gained. What is really needed is real-time information captured from each transaction as well as chain of custody information.”

Packaging teams should be involved in serialization initiatives right alongside IT teams, because they have to devise inline coding mechanisms, he adds.

Serialization, though, does not diminish the need for packaging-based features, Henderson says. “Employ them as needed proactively, depending upon the market and risk. They should be part of specific local programs to address regional risk,” he says. “You’ve got to track and trace as well as authenticate along the way.”

Drug manufacturers don’t have to tackle the supply-chain risks alone. Johnson says that “supply-chain security requires that pharmaceutical companies take a collaborative approach, leveraging best practices from multiple internal disciplines as well as first-tier, second-tier, and third-tier suppliers, distributors, transporters, warehouses, pharmacies, etc.”

Johnson is also reaching out to industry peers through Rx-360 (, co-leading its new international supply-chain security work group.

“We are looking to tackle supply-chain issues and have kicked off four working groups looking at conveyance security, logistic service provider audits, market surveillance, and supply-chain security management systems,” he explains.

Manufacturer strategies should not be prompted by mandates, however, says Johnson. “You shouldn’t wait for regulations to tell you how to protect your products. It is the responsibility of all companies.”

Prevention should be the goal.

“At Pfizer, we are constantly looking at how we can strengthen our processes so we can prevent issues before they occur.

Companies should build in strategies to prevent security lapses, instead of just focusing on how to respond to them,” Johnson

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