How track-and-trace can revolutionize business
Editor's Note: The following is a guest post from Allen Jacques, VP of Pharma Supply Chain, FusionOps and Dilip Tavargeri, President of SCMiND.
The best innovations often happen by accident. Take bubble wrap, originally conceived as textured wallpaper but has revolutionized packaging and shipping – as ecommerce proliferates, products that arrive intact and as-advertised are essential to the customer experience. Or consider Listerine, which started as a floor cleaner but has since created a billion-dollar market battling halitosis and better oral care. Track-and-trace, an initiative well-known in pharmaceutical circles, could share a similar history.
The concept of tracking-and-tracing, or serialization, was initially developed for a specific purpose – battling counterfeit drugs – but this technology shows promise to be useful for much more. In fact, track-and-trace has given rise to a system that holds the key to massive digital transformation, not only in the highly regulated pharmaceutical space but across other industries. For every brand that stakes its reputation on the quality and authenticity of the goods they deliver, track-and-trace methods hold the key to success. Not only will track-and-trace ensure brand protection of the goods but it will also give insights into pharmaceutical distribution that companies have never dreamed of.
A brief history
Ever since Viagra turned up for sale on an unlicensed webpage at less than half its prescription value, counterfeit drugs have been streaming into the U.S., endangering lives and dissolving the bottom line of pharmaceutical companies. The numbers are astonishing. The size of the counterfeit drug market is estimated to be somewhere between $75 and $200 billion, while the death toll is estimated at somewhere between 100,000 and 1 million people.
The size and scope of the counterfeit drug problem is massive, albeit not fully understood. In 2013 Congress signed the Drug Quality and Security Act into law, introducing measures to help tackle this widespread issue. Title II of the Act, the Drug Supply Chain Security Act (DSCSA) is what gave rise to track-and-trace. To comply with the mandatory Federal DSCSA, all pharmaceutical manufacturers must implement track-and-trace by November 2017, wholesalers by November 2019, and retailers and pharmacies must comply by November 2020. Globally, regulatory agencies around the world are mandating similar regulations.
At its most basic level, track-and-trace is simple: when drug packages carry a unique serial number, each individual package can be tracked as it moves throughout the supply chain. At any point in the life of that package that unique product identifier can be used to ‘trace’ the drug’s journey and authenticate its source.
Now in the process of being implemented pharmaceutical industry-wide, the track-and-trace system uses two dimensional barcodes to assign a unique serial number to every single pack of drugs. Although this technique may seem simple, the task of serializing every single drug pack is an overwhelming endeavor for pharmaceutical manufacturers, wholesalers and retailers – pharma companies are spending billions just to meet the bare minimum requirements. As a result, deadlines for mandatory compliance have been pushed back several times over the last decade.
However, there is a way forward: new advancements in technology are poised to help reduce the spend and make implementing track-and-trace more manageable. Emerging technologies like big data analytics and deep learning and will only bolster efforts to not only make serialization practices more widespread and easier to implement, but more effective in their ability to bring granularity, transparency, speed and actionable insights.
For any pharmaceutical company, the ability to accurately trace every product as it works its way through the supply chain – to know what ingredients are being added to them at all times, how long the product is sitting in the distribution path, and how they are routed to the consumer – is paramount to protecting their bottom line and brand integrity as well as hitting back at the prolific problem of counterfeit drugs.
Applications beyond anti-counterfeiting
As customer expectations for speed, transparency and cost grow to new heights, initiatives like track-and-trace will be part and parcel to ensure high product quality at the volume and velocity required by today’s market conditions. Think about complicated transport chains like checked baggage on commercial airlines, and the seemingly inevitable frustration that we have all experienced when baggage is “lost” or does not make it to the traveler’s final destination. The missteps that often cause these headaches could be reduced significantly if from the time the bag left its owner’s hands it was being tracked and traced through the entire transport chain. Consider beverage companies like Coca-Cola who run promotional campaigns under the caps of a bottle of soda. They’re using similar technology to track their product through the supply chain and engage their customers effectively through promotional offers.
Pharmaceutical manufacturers, distributors and pharmacies have a responsibility to take these new technologies beyond compliance and collaborate in order to transform their businesses and unlock opportunity that has been impossible to tackle in the past. There is a tremendous amount of working capital and inefficiency tied up in the distribution of pharmaceuticals that can now be understood at its most granular level. The cloud, big data and advanced analytical techniques can turn that understanding into actionable improvements.
Let me finish with a short story. I recently filled a prescription and saw that the product expires in five months. The beginning shelf-life of those tablets was three years which means that they were manufactured in August of 2014 and that it took over two and a half years for them to get to me. The next time you fill a prescription or buy an over the counter drug check the expiration date and you will see that my experience is not uncommon.
Once track-and-trace is successfully implemented, these long timelines can be significantly decreased, getting medicine to those who need it faster and safer. There will be many ways track-and-trace will benefit the industry beyond product authentication: increased inventory visibility, working capital reductions, operational efficiency, reduction in product expiration, efficient recall and an overall competitive advantage for a business.