Securing the Pharma Supply Chain
Author(s): William Bolt, Posted on November 9th, 2016
Fixing the pain points in the pharma supply chain
The pharmaceutical industry is fast evolving. At one end, pharma companies are seeking to reduce R&D costs. On the other, patients are demanding more personalised care. And on top of that, regulators are becoming increasingly stringent with their compliance requirements.
In a world where pharma companies, including their researchers, production facilities, logistic providers, care practitioners and patients are so intricately linked, it can become difficult to balance the various demands coming from all sides.
These pressures, alongside an aging and growing global population, means that the sector must rethink its supply chain today in order to keep up with the demands of tomorrow.
The current challenges
More than ever, there is a need for speed. Companies are seeking to accelerate their speed to market, yet must do so against strict regulatory requirements that are often reactive to rapid technological change. Consumers are demanding more personalised and high-tech care, delivered in-home and when convenient to them. They are requiring direct contact with the providers in the care continuum in a way unprecedented in this industry.
Yet cost remains a huge barrier to achieving this. Drug development alone requires an enormous amount of time and money. According to PwC, the price of developing a new molecule is set at anywhere between $75 million to $4 billion. And while there is huge pressure on pharma companies to deliver through their R&D budget, research from Accenture suggests that only half of R&D focused pharma companies are adopting the right digital tools to achieve this.
Underpinning all this is a lack of integration behind many supply chain structures. Today’s top pharmaceutical companies are huge conglomerates, made up of divisions, facilities and research arms located across multiple geographic regions and existing in complex partner ecosystems. And to complicate the matter even further, partners may own entire segments of the value chain. Inevitably, data flow is complex and prone to delays, the network is continuously open to vulnerabilities, and compliance culture is mismatched.
Patient Centricity is a clear direction for many life sciences companies. However, the implications are massive and encompass all of the factors above and many more. This is because some of the methods to provide data as feedback can impact on outcomes. As a result, the digital supply chain of patient data must be secured in a robust and scalable way to all end points. If the industry is to become more patient-centric in its outcomes, then clearly the digital supply chain will have to adapt in both emerging economies as well as in more advanced economies.
How security can help
In recent years, the sector has adopted a number of strategic moves to improve its efficiency, including outsourcing and partnerships. For example, outsourcing clinical trials has allowed pharma companies to reduce their overheads, and partnering with third party logistics and distribution providers has allowed them to cope with supply chain strains. However, while such collaboration has reduced costs and improved output, it has also opened the door for risk.
Cybersecurity has grown to become a huge issue for many pharma companies. Attackers are after all kinds of data, from intellectual property to commercially sensitive information. As a result, the supply chain is a key target, due its intimacy with all players in the pharma lifecycle. To combat this, pharma companies must ensure their whole system is protected.
The potential ramifications of a breach can be damaging. Alongside downtime, loss of revenue and loss of consumer trust, human life can be at stake. Not to mention the fact that counterfeit drugs remain a real issue across many countries. According to the European Federation of Pharmaceutical Industries and Associations (EFOUA), approximately 30 million fake medicines were seized at EU borders in 2011 alone. And according to the Pharmaceutical Security Institute, the number of worldwide counterfeit drug incidents has increased from 196 in 2002, to 2,108 in 2012.
Regulation is helping combat this challenge. From February 2019, all prescription medicines in the EU must come with a security feature allowing drug dispensers, such as hospitals, pharmacies or healthcare providers, to verify their authenticity. In the United States, the FDA’s Drug Supply Chain Security Act calls for the pharma supply chain to create an “electronic, interoperable system to identify and trace certain specific drugs as they are distributed in the United States” – with compliance expected by 2023.
While regulations are becoming more onerous, pharma companies should not see this as a threat. Instead, they should see regulations as a means to improve integration across the pharma supply chain. By ensuring compliance early on, forward thinking companies can reap business value from a gradually optimised network.
Success requires an inclusive approach to security. Pharma companies must consider the weaknesses in all their relationships, and when in the chain they are, while also understanding their own cybersecurity risks and dependencies.
Ensuring the security of the supply chain is just one way pharma companies can cope with the market challenges facing them today. As well as this, safeguarding the security of the digital patient data supply chain is also an absolute priority. Ultimately, the pharma industry seeks to cure the currently incurable. Making sure these chains are efficient, responsive and integrated enough to support these journeys is just one step towards this overall aim. With these agile and flexible processes enabled, life sciences companies can be innovative and deliver more value – traits which will be paramount for future success.