Securing the future: Innovating pharmaceutical supply chain for resilience and safety

Supply chain disruptions are taking centre stage in the media landscape at the outset of 2024, with incidents ranging from blockages in the Panama and Suez Canals to escalating geopolitical tensions capturing headlines globally. These disruptions serve as a clarion call for companies to infuse greater resilience and flexibility into their operations. The impact of these shifts resonates across all industries, yet the pharmaceutical sector finds itself at a particularly critical juncture.

Following the COVID-19 pandemic disruptions, which highlighted the fragility of the global supply chains, pharmaceutical companies are compelled to re-evaluate and reinforce their supply chain strategies to ensure the uninterrupted availability of essential medications and healthcare products.

The saying "It is hard to manage what you cannot measure" rings especially true in these times. The need for robust, digital identification and traceability solutions has never been more urgent as the sector strives to safeguard against shortages, maintain regulatory compliance, and uphold the highest standards of patient care in an increasingly volatile global landscape.

Enhancing supply chain transparency through advanced traceability

There has been progress in tackling counterfeiting in the pharmaceutical sector through the implementation of the EU Falsified Medicines Directive (FMD) and the Drug Supply Chain Security Act (DSCSA) in the US. However, pharmaceutical companies can do more to bridge the gap between the physical and digital worlds. To counter supply chain challenges, businesses require complete end-to-end visibility along their inbound and outbound supply chains to efficiently track and trace raw materials to finished products.

Traceability improves supply chain visibility, allowing pharmaceutical manufacturers to identify bottlenecks, inefficiencies, and areas of risk more effectively. Through a transparent supply chain, decision-makers can proactively tackle disruptions, refine inventory control, and enhance the precision of demand forecasting. This leads to shorter lead times, cost savings, and an overall improvement in supply chain performance.

In addition, there is a growing expectation for transparency. Implementing technology that facilitates precise tracking and tracing fosters trust. As a result, consumers and patients can verify the authenticity and origin of a product by accessing information about the ingredients, raw material sourcing, and the product's journey through QR codes, among other means. This transparency strengthens patient confidence and loyalty.

Strengthening supply chain integrity: Combatting counterfeiting and diversion

Supply chain visibility is crucial in combatting counterfeiting and diversion. The menace of illegal trade, including counterfeiting, diversion, and tampering, is escalating worldwide. Pharmaceuticals are notably the most counterfeited consumer goods, generating substantial profits for criminals, with an estimated annual revenue of €400 billion, as reported by the World Health Organization (WHO).

Counterfeit drugs not only endanger patient safety, but also inflict financial losses on manufacturers and tarnish brand reputation. The recent surge in counterfeit Ozempic for weight loss in Europe has raised serious concerns. Combatting this problem requires a collective response from the pharmaceutical sector.

Product diversion, the unauthorised redirection of pharmaceuticals to markets or retailers for which they were not intended, also poses a persistent industry challenge. An illustrative scenario is as follows: a patient fills a prescription for a medication worth several thousand euros and then sells it for a fraction of the cost in cash. The buyer removes the patient's information, alters the bottle, and sells it to a wholesale distributor, who, in turn, sells it back to the pharmacy at a discounted price. As a result, the same bottle illicitly re-enters the supply chain, posing risks to patients.

Counterfeiting and diversion, often intertwined, compromise product integrity. Even if the product is genuine, it is highly probable that it was not handled properly and may have been contaminated or diluted. This jeopardises patient health and safety while eroding prices, damaging brand reputation, and undermining customer loyalty.

Addressing counterfeiting and diversion involves identifying and removing unauthorised sellers from the supply chain, a complex task given the sophisticated nature of these illicit activities. The FMD represents a significant step toward mitigating these issues in Europe, but further measures are necessary.

Enhanced supply chain traceability, vital in this fight, allows for the verification of product movement at each stage. Track and trace solutions enable manufacturers to monitor product distribution, complicating diversion efforts. Integrating comprehensive digital tracking further obstructs counterfeiters' access to the market.

Additional layers of protection

Pharmaceutical companies should adopt additional strategies to combat counterfeiting and diversion effectively, such as digital fingerprinting, which offers advanced product authentication through existing 1D and 2D barcodes and packaging. By analysing an existing barcode, this technology creates a unique, verifiable digital identifier, facilitating immediate counterfeit detection and complementing broader security initiatives.

Utilising artificial intelligence (AI) and machine learning (ML) can also detect supply chain anomalies, identifying potential counterfeit incidents. Implementing these anti-counterfeiting measures is critical for protecting the drug supply chain, ensuring patient safety and minimising financial losses.

Leveraging technology for long-term results

The promise of traceability solutions and other advanced technologies, such as AI and ML, in streamlining the pharmaceutical supply chain is evident. The pharmaceutical supply chain is advancing beyond digitalisation and is set to become even more intelligent. Collaborating with an experienced supplier boasting a proven track record in the highly regulated pharmaceutical industry can ensure efficient technology adoption, streamlined operations, enhanced supply chain visibility, and improved patient safety globally.