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Michael Stewart Strategic Business Planning Track & Trace Projects PharmTech, Inc. 14048 Petronella Drive Suite 201 Libertyville, IL 60048 (847) 281-8924 direct (815) 403-8425 cell MStewart@PharmTechInc.com
Table of Contents
Preface aka Mikes Soap Box ................................................................................................................. 3 Background ............................................................................................................................................... 5 California Serialization & e-Pedigree Requirements................................................................................. 7 Where do I start? ...................................................................................................................................... 8 Infrastructure & Processes........................................................................................................................ 9 Serialized Data Exchange ........................................................................................................................ 10 Solutions Provider Assessments ............................................................................................................. 11 Standardization ....................................................................................................................................... 12 Identifying Business Value ...................................................................................................................... 13 Business Value Case 1 ...................................................................................................................... 14 Business Value Case 2 ...................................................................................................................... 15 Conclusion ............................................................................................................................................... 16 About PharmTech ................................................................................................................................... 17 About the Author: Michael Stewart........................................................................................................ 17
process efficiencies associated with applying GS1 standards to a pharmaceutical companies own internal processes from ingredients and APIs to the distribution center workflow. Thats the easy stuff. Im going to show you how a project deemed to be a sunk-cost (compliance) can become a strategic investment into the business that can drive millions in additional revenue and savings for your company. Take that laser focus, that blinders-on focus, and shine that light through this new business value prism to uncover all the hidden assets and hidden opportunities around this and future projects. There is little to no additional cost involved in identifying these opportunities. All it takes is leadership and a shift from being problem-focused to opportunity-focused. With the immaturity in serialization in pharmaceuticals there are limited consulting and advisory resources that have actually designed, planned, implemented and piloted traceability solutions, PharmTech just happens to be one that has. There are two problems with most consultants. First, if they are industry outsiders and journeymen, you are paying them to learn your business before they can ever add value. Second, most bog you down in data and never provide action. They give information. They should give advice. You should be receiving Heres what to do about a situation and Heres additional opportunities we uncovered in the process to be addressed now or later as you see fit. Then they should support it with facts. There is no benefit in giving you a data dump if you dont know what to do with it and why to do it. The role of a consultant is to provide leadership, thus allowing stakeholders to take the next steps. My role, and PharmTechs role, is to connect the dots, to provide a road map and take you to the next steps while identifying additional opportunities and mitigating potential risks. God speed,
Background
In 2004, the California Board of Pharmacy passed legislation that required that all pharmaceutical supply chain parties, from manufacturer through pharmacy, be able to pass along an electronic pedigree that would detail the movement and transfer of ownership of a pharmaceutical product at the smallest saleable item level. This mandate was to take effect January 1, 2007 and was later pushed back to 2009, then again to 2011 over production line and technology concerns. In 2008, after convening with industry stakeholders, the California Legislature and the California Board of Pharmacy agreed to once again push back the effective date of the legislation to January 1, 2015. The pharmaceutical industry stakeholders involved unanimously agreed to accept the legislation with a graduated implementation between January 1, 2015 and July 1, 2017. The expectation was that this additional stay would allow the entire pharmaceutical supply chain (manufacturers, distributors, pharmacies) enough time to work through the design, pilot and rollout of an interoperable e-Pedigree solution in the safest and most cost-effective way for all parties involved. The industrys reaction and activities since the extension of the California mandates deadline for ePedigree compliance has been mixed. A few of the major pharmaceutical companies and the Big 3 distributors (Cardinal Health, AmerisourceBergen, McKesson) took a leadership role and began planning, designing and piloting possible serialization and e-Pedigree solutions. Since there was no industry consensus as to technology, standards, data carriers and capabilities downstream these have been accomplished with varied levels of success. Meanwhile, other industry participants have sat on the sidelines looking for either a mandate from the FDA requiring the same requirements as California or potentially usurping those requirements or have had a wait-and-see position. Companies have chosen to wait for many reasons, but they boil down to two. The first wait-and-see position derives from the idea that with the very real challenges inherent in a supply chain wide initiative such as serialization and e-Pedigree, that California may yet again push back the deadline. A second position stems from the idea that Pioneers get arrows. This means that the first-movers, namely large Pharma, have the budget and resources to pilot and work through what the eventual solution would be. The companies that delayed decided they either could not afford or are not willing to absorb these trial and error costs. Many other large and mid-sized pharmaceutical companies simply did not want to lay out the capital and deploy resources for a large project such as serialization with legitimate concerns surrounding: Extension of the California effective date beyond 2015 Uncertain technology Immature market and lack of proven technical resources Potential change to mandates by the FDA Evolving ex-US serialization and authentication requirements
We are now less than three years away from the California serialization and e-Pedigree mandates coming into effect. The wishful thinking around the mandates getting delayed again or a silver bullet plug-and-play solution to solve the technology interoperability concerns have not arrived. It is time for all stakeholders to develop their strategic business plan and road map to implementation for California 2015 compliance. PharmTech, Inc. has been leading the Track & Trace conversation, planning and piloting solutions with a top 10 pharmaceutical manufacturer and others in the industry since 2007. In this strategic planning guide I will share our learning curve and provide the framework for internal team and management conversations around developing the strategic business plan for your company serialization and ePedigree initiative. Due to the varied and evolving international mandates surrounding labeling, serialization, authentication, diversion and counterfeits, most pharmaceutical manufacturers have a handful of oneoffs and independent packaging and tracking solutions out there to address the concerns of a specific market. What they have found is that this has become cumbersome and costly to the company and opens the doors to more problems than solutions long term. In light of developing a California serialization and e-Pedigree solution, todays manufacturers are looking at a holistic solution that is seamlessly integrating both US and ex-US distribution. The PharmTech California 2015 Serialization Strategy Guide is designed to lead the conversation and incorporate more than just what solution providers to choose. When you look at a Track & Trace project you need to view it not as a compliance project. View this as the infancy stage of building what will become a legacy system within your organization that will deliver millions of dollars of tangible and intangible benefits and efficiencies to the company, the people and the processes. It is more manageable and prudent to plan and design a traceability system that can derive these benefits for the company and various functions within the organization when you plan for all the ways that you can use this new data that is being generated, both internally and externally. For those manufacturers and distributors that have already installed a serialization and e-Pedigree solution, this guide will provide value as a brief audit to ensure that the is have been dotted and the ts have been crossed. In engagements where pharmaceutical companies have serialized their lines, PharmTech has then been brought in to develop the strategy behind What can we do with this information/solution toincrease revenue, improve adherence, gain dispenser loyalty, identify efficiencies, etc There is value included here from those just starting strategy formulation and defining requirements to those asking How do we leverage the system we have?
The amended California State Bill 1307 (8/20/2008) can be found at: ftp://leginfo.ca.gov/pub/07-08/bill/sen/sb_1301-1350/sb_1307_cfa_20080820_172325_sen_floor.html A summary with definitions of key terms for State Bill 1476 (defining e-Pedigree) is available at: http://www.pharmacy.ca.gov/laws_regs/e_pedigree_laws_summary.pdf Additional material, including an extensive Q&A is available through the California Board of Pharmacy site at: http://www.pharmacy.ca.gov/about/e_pedigree_laws.shtml From our experience, the largest challenge is not in the item level serialization component, rather in achieving interoperable data exchange and continuity among multiple ERP systems, trading partners, and business applications from the pharmaceutical manufacturer all the way downstream to the pharmacy/clinic, all the while maintaining 100% data integrity. If even one event or transaction is missed, the entire chain of custody for that item/case/pallet has been compromised and broken even if there has been no diversion or foul play.
Where do I start?
Great question, Im glad you asked. In order to map how to get where you want to go, you have to know where youre starting from. In taking that first step into developing your strategic business plan you must define your as-is state. These are the activities that highlight the existing infrastructure, product flow from manufacturing line to final dispense and an understanding of how the company conducts business now and how that strategy or business model is expected to change going forward. Typical activities involve: Process mapping Gap analysis Current/Future state evaluation Business process analysis Review of commercial relationships (contract manufacturing, contract packaging) Analysis of market requirements, both US and ex-US Impact analysis Long term planning and forecasting
With a solid understanding of your base line it is time to move forward and compare the current state (as-is) to your future state (wish-to-be). By taking the time upfront to fully define the processes, movement and strategy of your company and products throughout the supply chain it is easier to more clearly identify business value opportunities that exist and red circle the areas that changes or upgrades need to be made going forward.
Strategy
Process Mapping Document Current State Commercial Relationships Gap Analysis Impact Analysis Budget
Planning
User Requirements Functional Requirements Develop Use Cases Technical Architecture Develop Future State Business Value Propositions Solution Provider Assessment
Implementation
Installation Standards Conversion Training Internal Test & Validation Trading Partner Integration Piloting
A clear understanding of what your assets are and the processes that get your product manufactured, packaged and distributed is instrumental in order to identify where the gaps are that need to be filled.
As you can see, there is more to serialization than just generating a number and slapping a label on it. The greatest leg work is in defining what data is generated, where it is to be sent, how it will be used, how it will be sent, how it will be received and how all of this can be accomplished through multiple and varied technological platforms.
Standardization
Although there is no required standard according to the California mandates or internationally, the pharmaceutical industry consensus is moving forward with GS1 as the standard of choice. Long the leading player in traceability within retail, GS1 standards allow for a uniform way to identify fixed data. Through the years, various pharmaceutical mergers and acquisitions and an ever expanding breakdown of product mix, has led to a substantial and growing mix of internal codes for product tracking purposes. Further complicating the matter is that these codes may vary by distributor, geographical market sold in, by packaging and by dosage just to name a few. GS1 standards harmonize this process by providing a single reference that can be applied throughout the world. In PharmTechs consulting engagements, it would be an understatement to say that those in the industry have underestimated the sheer volume of work and time it will require to assign GS1 identification numbers to product, places, trading partners, shipments and assets. Below are the foundational GS1 identification types 1: GTIN SGTIN GLN SSCC GIAI GRAI Global Trade Item Number Serialized Trade Item Number Global Location Number Serial Shipping Container Code Global Individual Asset Identifier Global Returnable Asset Identifier Trade Item Serialized Trade Item Locations and Trading Partners Logistics Unit Individual Asset Returnable Assets
GS1 provides an international, cross-company, cross-industry and EDI qualifier standard. Questions to consider are: Are we prepared for GS1 standardization and assigning serial numbers? o GS1 company prefix, data carriers selected, hierarchies defined What resources are available to assign GTINs? How many will be required? What resources are available to track down the physical and accurate addresses for every trading partner, supplier and customer to assign GLNs? Will internal GLNs be utilized for tracking of product movement from ingredients to dispense? When do I need this completed since it represents the backbone of the end solution?
A detailed explanation of and applicable use for each GS1 identifier is beyond the scope of this paper. Additional information can be found at the GS1.org website in the Resources section.
The case studies that follow will show how a change in mindset from fixing a compliance problem to identifying business opportunities can open doors to creating value including increased market share and improved adherence just name a few.
Business Value Case 1 With increasing costs of drug development, finding ways to boost market share of existing branded drugs which have gone off patent was of prime concern, as branded drugs have higher premium than competing generics.
Challenge: Flat sales and generic equivalents Current system too costly Need serialization compatibility Scope of Work: System replacement Item level serialization Identify business value
Results: Serialization mitigated future regulatory concerns 700 Clinic Pilot Authentication achieved Created an automated software for the dispenser that provided, Direct billing to Medicare Automated inventory management reduces over-stock/under-stock Dispense management system with patient and inventory interface Automated patient scheduling Direct Electronic Health Record (EHR) integration, HIPAA compliant Reduced customer service staff 40% at the manufacturer 3% increase in overall market share Extensible to other products and divisions Additional Value Identified: During the initial strategic business planning PharmTech identified how the serialized data could be managed at the clinic level to generate efficiencies for the clinics patient management, automated inventory replenishment and billing directly to Medicare to avoid missed billing reimbursement for the healthcare provider. This led to a 3% overall increase in market share from just 30% of the distribution channel and the signing up of 20 additional clinics due to the practice improvement software developed.
Business Value Case 2 Challenge: Manufacturer needed to serialize self-injectable for California compliance. Additional Value Identified: During the Product Life Cycle process mapping PharmTech identified that the manufacturer was losing opportunities in a self-injectable between Physician Recommendation & Decision Day (by patient) as well as the time line between Prior Authorization (PA) & Benefit Verification (BV).
Decision Day Physician Denial Benefit Verification Prior Authorization Delivery Recommendation Patient Insurance Approval Adherence
Delivery
Recommendation
Patient
Insurance
Approval
Adherence
Conclusion
Undertaking or improving upon a serialization and e-Pedigree project is a daunting task. In order to continually move forward and avoid the many potential pitfalls along the way it is imperative that you and your team craft a road map to get you from the strategic business planning through the tactical implementation phase. Herein I have described the high level questioning and process analysis that can craft a strategy and provide direction for your project. Like Alice in Wonderlands rabbit-holes, answering one question opens the door to many others. If you have the time, training, and resources on staff to complete the strategy and project management of your serialization and traceability initiative I encourage you and your team to begin/continue the journey towards compliance and identification of additional benefits. If, on the other hand, your team may require the guidance and leadership of track & trace consulting professionals that understand pharmaceutical workflow processes, technology interoperability, regulatory packaging requirements and can identify where the land mines are buried so you can avoid them, PharmTech or another seasoned firm would be happy to assist. One cautionary note, if you require serialization and e-Pedigree strategy or implementation project management leadership, the amount of experienced and qualified traceability consulting resources is slim and may dry up quickly as the mandates grow closer. Being proactive on contracting with a knowledgeable firm and gaining access to their resources that are familiar with traceability will ensure that you will not have to settle for what is available with less qualified consultants. The clock is ticking and each day that passes is one day closer to the California mandates taking effect. We wish you well in obtaining compliance and identifying business value along the way.
About PharmTech
PharmTech has a diverse 17 year background in Quality, IT, FDA compliance, manufacturing, workflow, distribution center management and supply chain. We are positioned to understand the entire product life cycle, how California regulations impact operations, and how to identify business value in the processes to leverage the newly serialized infrastructure. The inclusion of business value into projects is how we have always done business with our clients. This forward thinking leadership is the trait that is a differentiator in PharmTech being selected for the pharmaceutical and biopharmaceutical projects we undertake.