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Pharmaceutical Manufacturing and Packing Sourcer

Visible Benefits

At its most basic level, cloud computing is the location-independent delivery of IT management services for a group of users, allowing them to share resources, applications and information. However, cloud computing is much more than a way of linking people across distances. It is also a means of managing the workloads (computation, memory, networking and storage) required to execute crucial processes and the delivery of industry-specific solutions.

In the life sciences value chain, cloud computing can be used to perform modelling and simulation, computational biology, high-throughput screening and medical imaging. Similarly, it can be used to share and analyse supply chain data, track and trace products, manage inventory and identify bottlenecks in logistics networks, to ensure that healthcare providers receive medications in a timely manner.

Information Sharing

Managing the life sciences supply chain presents many challenges. The non-stop nature of drug manufacturing and distribution requires a very high degree of information sharing. Many biopharmaceutical companies are trying to shorten the production lifecycle and reduce costs by outsourcing work to contract manufacturers and vendors, while still closely collaborating with them. This means they must share data with numerous suppliers, and share the right data with the right suppliers, in order to create as much value as possible.

A supply chain cloud that brings together all the partners using a common set of processes would enable the industry to work more efficiently – providing real-time data on every process, and computing power that could be adjusted as needed.

Virtualisation Layer

GT Nexus is one vendor offering cloud solutions for managing complex supply chains. The company’s Supply Chain Visibility tool provides customers with a view of all supply chain activity across the enterprise. Stakeholders and trading partners can access – from a single source – where inventory is currently held across the globe, and use the tool to quickly adapt their logistics plans to meet demand and mitigate supply chain risk. Customers can automatically track production and on-hand inventory and share forecasts to confirm capacity with suppliers. This increases corporate margins by lowering the cost of goods sold through the issuance of capacity and inventory projections, while improving on-time delivery rates.

While GT Nexus largely operates in the retail sector, the company has recently been sought after by players in the pharma industry. Pfizer was one of the first drug makers that reached out to GT Nexus in order to move its entire supply chain to the cloud and create a virtualisation layer that delivers real-time data to participants across the supply network. This meant linking into the IT systems of all its supply chain partners.

But rather than requiring over 500 vendors to implement Pfizer’s software, the company adopted a common information exchange that enabled it to send and receive information, effectively turning each partner into a node on a virtual supply chain. This shifted the company from device dependency to device neutrality, with the ability to rapidly add or remove vendors from its supply chain at will.

Track and Traceability

According to the World Health Organization, global sales of counterfeit medicines in the marketplace and on fake online pharmacies represented an estimated $431 billion in 2012, and nearly 84% ($359 billion) had a direct impact on public health. Ranging from random mixtures of harmful toxic substances to inactive, ineffective preparations, counterfeit drugs threaten the lives of millions of patients and damage public trust in the industry. To ensure patient safety, pharma manufacturers urgently need to find ways to protect the integrity of their own products and keep false medicines out of the legitimate supply chain.

While individual countries have started to build local legislative frameworks to address the problem, there is currently no standardised regional or global approach to foiling trade in illegitimate drugs. In the absence of a single set of regulatory standards, drug manufacturers must move to defend their own supply chains.

What is clear, however, is that serialisation – applying a unique identifier at the level of the individual product unit – has emerged as the core requirement for any robustly designed security initiative to protect the supply chain. The ability to track, trace and audit individual units throughout the supply chain – whether they are being shipped or returned – will be key to establishing a product’s pedigree at every stage in its journey. Track and trace initiatives have the potential to deliver many benefits to drug companies by shielding revenues, reputations and profits, while conveying insight into supply chain operations.

Establishing Pedigree

Oracle has developed a software application to enable pharma companies to implement serialisation and pedigree management initiatives quickly and easily. The Oracle Pedigree and Serialization Manager (OPSM) is a standalone application that is designed to 'plug and play' into a company’s existing IT environment, regardless of which software the organisation is running. It can be fitted with minimal impact to existing IT resources, and provide serialisation and e-pedigree management across multiple systems and vendors collaborating within the same organisation. This ensures pharma companies do not waste time piecing together isolated pedigree and serialisation applications.

OPSM comes with a sophisticated web/cloud-based interface that enables users to integrate data across shipping, packaging, distribution and inventory functions, in addition to producing dashboards to improve visibility across the supply chain. The application generates serial numbers at every step in the chain of custody; then the packaging system sends it an assignment notification, thereby creating a record of the packaging hierarchy. This is followed by the creation of distinct electronic records for when a medicine pack has been shipped or exported.

Serial numbers on returned products can be reconciled against the system to verify their legitimacy. Checks can be performed for return transactions, including verification that the serials exist, that the medications are not flagged as counterfeit or suspected counterfeit, and that they have not expired.

Looking Forward

While the uptake of cloud computing has been much slower in the pharma industry than in other sectors, a combination of recent events could prompt drug makers to move to the cloud more quickly.

The patent cliff has eroded sales of a slew of blockbuster therapies, and the cost and time of bringing an asset through to the clinic has skyrocketed. This has led drug companies to cut costs by scaling back on internal R&D, and to consider buying innovative pipelines through mergers and acquisitions. While aggregating customers, products and pipelines, as well as marketing drugs, is necessary, many post-acquisition efforts fail to adequately rationalise supply networks. This could lead to layers of duplication in logistics networks and clogs in operations once additional companies join.

Through the use of cloud computing, however, drug companies should be able to streamline these operations and obtain the visibility across the enterprise to respond to changes in customer demand and trace their products – thereby protecting the integrity of the pharma supply chain.


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Adam M Dion is an Analyst in the Healthcare Industry Dynamics Team at GlobalData. He is an author of GlobalData’s PharmaLeaders benchmark reports, which rank the competitive positions of the top companies in the pharma, biotech, and CRO/CMO sectors. Adam was previously an Analyst with Technology Business Research, a leading market research and consulting firm. His analytical commentary has been quoted by leading sources, such as The Wall Street Journal, Bloomberg, Forbes, Financial Times, The Guardian, CenterWatch and Outsourcing-Pharma.com. Adam gained a BS in Neuroscience from Merrimack College, and an MS in Marketing from the University of New Haven.
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