{"id":26417,"date":"2017-11-15T22:21:14","date_gmt":"2017-11-16T03:21:14","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/the-abcs-of-drug-traceability-how-digitalizing-the-pharmaceutical-supply-chain-can-enhance-compliance-and-financial-performance\/"},"modified":"2017-11-15T22:21:14","modified_gmt":"2017-11-16T03:21:14","slug":"the-abcs-of-drug-traceability-how-digitalizing-the-pharmaceutical-supply-chain-can-enhance-compliance-and-financial-performance","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-abcs-of-drug-traceability-how-digitalizing-the-pharmaceutical-supply-chain-can-enhance-compliance-and-financial-performance\/","title":{"rendered":"The \u201cABC\u2019s\u201d of Drug Traceability \u2013 How Digitalizing the Pharmaceutical Supply Chain Can Enhance Compliance and Financial Performance"},"content":{"rendered":"<p><strong><u>What is the Issue and Why Should AmerisourceBergen Corporation (ABC) Care?<\/u><\/strong><\/p>\n<p>In late 2013, the U.S. Congress passed the Drug Supply Chain Security Act (DSCSA), which sets forth new requirements for firms along the pharmaceutical supply chain to improve \u201ctraceability\u201d as a drug moves from manufacturer to its point of dispensation.\u00a0 The legislation, which is being implemented by the Food and Drug Administration (FDA), began to take effect in late 2014 and will be phased in through 2023.\u00a0 Regulators believe that improving drug traceability \u2013 also referred to as \u201cserialization\u201d, \u201cpedigree\u201d, or \u201ctrack and trace\u201d \u2013 will reduce the incidence of counterfeiting, black\/gray market drug distribution, and adulterated or incorrect orders, which will lead to a safer healthcare system [1].<\/p>\n<p>Why should ABC care? \u00a0The company quite literally operates at all points along the supply chain, with diverse operations spanning private label drug manufacturing, re-packaging, distribution and wholesaling, and 3PL.\u00a0 ABC also conducts business upstream \u2013 with manufacturers and intermediate distributors \u2013 and downstream with customers [2].\u00a0 ABC should continue to prioritize supply chain digitalization to stay ahead of DSCSA serialization regulations and capture the following benefits [3]:<\/p>\n<ul>\n<li>Improved patient safety and protection against reputational risk of harming patients<\/li>\n<li>Ability to rapidly identify and isolate issues, leading to a more efficient recall process<\/li>\n<li>Optimized inventory levels, resulting in fewer supply disruptions and improved cash flow<\/li>\n<li>Market share gains from competitors who are behind on DSCSA readiness<\/li>\n<li>Additional revenue from \u201cproductizing\u201d ABC\u2019s own supply chain solutions to sell to other players<\/li>\n<li>Improved sales and marketing effectiveness<\/li>\n<\/ul>\n<p><strong><u>What is Management Doing About the Issue?<\/u><\/strong><\/p>\n<p><strong><em>Implementing Traceability Strategy.<\/em><\/strong>\u00a0 ABC has openly articulated its intention to stay ahead of regulations to differentiate itself.\u00a0 For example, ABC participated in a customer co-innovation project with SAP, in which the two companies developed a new enterprise traceability solution from the ground up.\u00a0 The resulting product \u2013 Advanced Track and Trace for Pharmaceuticals \u2013 is being implemented across all of ABC\u2019s business units.\u00a0 This will be hosted in the cloud to accommodate the massive amount of data anticipated from the tracking of drugs to and from trading partners and within ABC.\u00a0 In addition to working with SAP, the company is also pursuing serialization pilots with other relevant players, including the Healthcare Distribution Management Association, GS1, and the Pharmaceutical Distribution Security Alliance [4].<\/p>\n<p><strong><em>Pilot with Johnson and Johnson Supply Chain (JJSC).<\/em><\/strong>\u00a0 Earlier this year, ABC teamed up with JJSC to run a 4-week pilot program in a live production setting.\u00a0 At the manufacturer (J&amp;J), a 2-D DataMatrix barcode was affixed to each unit to collect the drug\u2019s pedigree information (e.g. batch\/lot, expiration date) as well as GS1 data (e.g. Global Trade Item Numbers and Global Location Numbers).\u00a0 Once the shipments reached downstream supply chain stops, automated vision systems captured the data, and transactions were recorded with GS1 EPCIS (Electronic Product Code Information Services) codes.\u00a0 This system enabled ABC to know the details of shipments in transit and to confirm receipt of the proper orders without ever opening a package [5].<\/p>\n<p><strong><u>Additional Suggestions for Management<\/u><\/strong><\/p>\n<p>In addition to ensuring compliance, ABC should capture the opportunity to generate revenue from \u201cproductizing\u201d the traceability systems and know-how that it develops.\u00a0 According to experts, many small- and medium-sized pharmaceutical companies are very behind on implementing serialization systems [6].\u00a0 By selling solutions to help these companies get up to speed, ABC could generate revenue as well as ensure the continuity of its supplier base, as non-compliant firms will not be able to operate.\u00a0 ABC could also work downstream, helping customers implement these systems to improve satisfaction.<\/p>\n<p>Productizing supply chain solutions is not foreign to ABC.\u00a0 ABC has long marketed its Cubixx inventory management solution, a refrigeration unit sold to dispensers of temperature-sensitive drugs.\u00a0 Recently, ABC updated Cubixx to include RFID sensors connected to a cloud-based portal, enabling clients (or ABC as outsourced inventory manager) to monitor the status of drugs stored in the units [7].\u00a0 It recently announced a partnership with Suzuken, a Japanese pharmaceutical distribution and logistics company, to implement the Cubixx system [8].<\/p>\n<p><strong><u>Open Questions<\/u><\/strong><\/p>\n<p><strong>If and How Blockchain Will Impact Pharmaceutical Supply Chain.<\/strong>\u00a0 IBM recently announced a partnership with a Chinese firm to launch a new blockchain platform designed to trace drugs along the supply chain while cataloguing trading records to authenticate transactions [9].\u00a0 How may blockchain play into the future of the pharmaceutical supply chain?\u00a0 What are the barriers to adoption?<\/p>\n<p><strong>Understanding the Impact of Digital Traceability on Drug Prices.<\/strong>\u00a0 The requirements of the DSCSA are burdensome for smaller players in the supply chain.\u00a0 If these organizations \u2013 particularly manufacturers \u2013 are unable to successfully implement the infrastructure to accommodate unit-level traceability, will downstream players encounter supply shortages, causing drug prices to rise?<\/p>\n<p>(Word Count: 792)<\/p>\n<p>Citations<\/p>\n<p>[1] U.S. Food &amp; Drug Administration.\u00a0 \u201cAre you ready for the Drug Supply Chain Security Act?\u201d https:\/\/www.fda.gov\/Drugs\/DrugSafety\/DrugIntegrityandSupplyChainSecurity\/DrugSupplyChainSecurityAct\/ucm427033.htm<\/p>\n<p>[2] Bylo, Greg.\u00a0 \u201cPiloting Traceability with GS1 Standards\u201d. \u00a0April 4, 2017.\u00a0 https:\/\/www.pharmamanufacturing.com\/articles\/2017\/piloting-traceability-with-gs1-standards\/<\/p>\n<p>[3] Zirkle, Michael.\u00a0 \u201cSerialization: Driving Business Value Beyond Compliance\u201d.\u00a0 April 4, 2017. https:\/\/www.pharmamanufacturing.com\/articles\/2017\/serialization-driving-business-value-beyond-compliance\/<\/p>\n<p>[4] Pharmaceutical Commerce.\u00a0 \u201cAmerisourceBergen defines its path forward in traceability\u201d.\u00a0 November 9, 2015.\u00a0 <a href=\"http:\/\/pharmaceuticalcommerce.com\/supply-chain-logistics\/amerisourcebergen-defines-its-path-forward-in-traceability\/\">http:\/\/pharmaceuticalcommerce.com\/supply-chain-logistics\/amerisourcebergen-defines-its-path-forward-in-traceability\/<\/a><\/p>\n<p>[5] Bylo, Greg.\u00a0 \u201cPiloting Traceability with GS1 Standards\u201d. April 4, 2017. https:\/\/www.pharmamanufacturing.com\/articles\/2017\/piloting-traceability-with-gs1-standards\/<\/p>\n<p>[6] Hroncich, Caroline.\u00a0 \u201cSerialization Challenges Facing Pharma Manufacturers\u201d.\u00a0 April 18, 2017.\u00a0 http:\/\/www.pharmtech.com\/serialization-challenges-facing-pharma-manufacturers<\/p>\n<p>[7] Pharmaceutical Commerce.\u00a0 \u201cAmerisourceBergen Updates its Cubixx Specialty Medication Container\u201d. \u00a0April 2, 2017.\u00a0 http:\/\/pharmaceuticalcommerce.com\/cold-chain-focus\/amerisourcebergen-updates-cubixx-specialty-medication-container\/<\/p>\n<p>[8] AmerisourceBergen. \u201cSuzuken Announces Decision to Use AmerisourceBergen\u2019s Cubixx System to Enhance Specialty Drug Distribution in Japan\u201d.\u00a0 \u00a0November 4, 2016. http:\/\/www.amerisourcebergen.com\/abcnew\/news\/press-releases\/suzuken-announces-decision-to-use-amerisourcebergen\u2019s-cubixx-system-to-enhance-specialty-drug-distribution-in-japan.aspx<\/p>\n<p>[9] Lo, Chris.\u00a0 \u201cBlockchain in pharma: opportunities in the supply chain\u201d.\u00a0 October 31, 2017.\u00a0 https:\/\/www.pharmaceutical-technology.com\/features\/blockchain-pharma-opportunities-supply-chain\/<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New legislation mandates that drugs be traceable at the unit level as they move through the pharmaceutical supply chain.  AmerisourceBergen Corporation &#8211; a private label pharmaceutical manufacturer, distributor, wholesaler, and 3PL provider &#8211; is on the right track by prioritizing supply chain digitalization.<\/p>\n","protected":false},"author":10180,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[2608,4097,222],"class_list":["post-26417","hck-submission","type-hck-submission","status-publish","hentry","category-blockchain","category-digitalization-of-supply-chain","category-pharmaceuticals","hck-taxonomy-organization-amerisourcebergen","hck-taxonomy-industry-pharmaceutical","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The \u201cABC\u2019s\u201d of Drug Traceability \u2013 How Digitalizing the Pharmaceutical Supply Chain Can Enhance Compliance and Financial Performance - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-abcs-of-drug-traceability-how-digitalizing-the-pharmaceutical-supply-chain-can-enhance-compliance-and-financial-performance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The \u201cABC\u2019s\u201d of Drug Traceability \u2013 How Digitalizing the Pharmaceutical Supply Chain Can Enhance Compliance and Financial Performance - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"New legislation mandates that drugs be traceable at the unit level as they move through the pharmaceutical supply chain. 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