Track-and-trace among drivers for change in pharma manufacturing

The pharmaceutical industry needs to radically rethink its manufacturing and distribution strategy over the coming years, and that includes a greater emphasis on technologies to help track medicines through the supply chain, according to PricewaterhouseCoopers.

"Globalisation, the foreign sourcing and manufacture of regulated products, and an increase in the volume and complexity of imported products have increased the need for supply chain control to identify the risk of contamination and fake medicines," says PwC in its new report entitled Supplying the future: Which path will you take?.

Regulators are raising the bar on supply chain safety, demanding sophisticated technology solutions to track and trace product throughout the supply chain, notes PwC in the paper.

Among the technologies featured in the report include the use of 'bokodes,' data tags developed at the Massachusetts Institute of Technology (MIT) which contain thousands of times more information than a conventional barcode, and DNA fingerprinting techniques to provide a way of determining where a biologic drug has been manufactured.

"DNA fingerprinting has already been used to identify ‘counterfeit’ foods," says PwC. "Researchers in Spain recently used a technique called forensically informative nucleotide sequencing to test nine commercial seafood samples containing shark meat and isolate those that were incorrectly labelled."

Overall, PwC concludes that most drugmakers' supply chains are under-utilised, inefficient and ill-equipped to cope with the sort of products coming down the pipeline.

Some specialty drugmakers may exit manufacturing altogether and rely on outsourcing, it suggests, while other mass-market players will adopt strategies used in consumer product industries and develop expertise in lean manufacturing, strategic pricing and inventory management.

Meanwhile, the growing importance of emerging markets will be another driver for building more security into supply chains that are increasingly dispersed geographically, notes the report, citing Pharmaceutical Security Institute figures suggesting that the number of recorded cases of counterfeit, stolen, or illegally-diverted medicines have risen nine fold since 2002.

Overall, PwC is predicting three major changes to pharmaceutical manufacturing and distribution over the coming decade: the supply chain will become more fragmented, with different models used for different product types and patient segments; distribution and manufacturing will become a differentiator in the marketplace and source of economic value; and it will become a two-way street, with information flowing both up and down the supply chain.

The management of information transferred between the pharma company, the patient and healthcare provider will become as important as the movement of product, predicts PwC.

"The most successful pharma companies will be those that recognise the underlying value locked in their supply chain and can leverage it as a value and brand differentiator rather than just a cost," commented Steve Arlington, global advisory pharmaceutical and life sciences leader at PwC.

"Companies that recognise information is the currency of the future, will be those that go the final mile and stand out by 2020."