Forging more secure links in the pharma-biotech supply chain

Katarina Sapeta

Independent contributor

Supply chain interference through substandard drug infiltration can be detrimental to the bottom line as well as public health. In this article, Katarina Sapeta points out security challenges facing the industry.

In recent years we’ve witnessed an aggressive structural reorganization in almost all areas of the Big Pharma / biotech sector, in an effort to address challenges in the current market place. They include shrinking new-product pipelines, growing global competition, fewer drug approvals, patent expiration, and the rising influence of generics. These challenges have been dealt with through consolidation and trimming in-house R&amp,D and manufacturing in an attempt to streamline operation costs, consequently the practice of utilizing contract manufacturing organizations (CMOs) and contract research organizations (CROs) has become commonplace, as companies outsource at virtually every stage of the supply chain.

Still, outsourcing comes with significant challenges to maintain a viable supply chain. Pharmaceutical products are prone to a number of supply chain disruptions that can increase costs and undermine competitiveness as well as create potential health hazards and tarnish brand integrity. More supply options are often accompanied by competitive pricing, a common trade-off is quality problems and increased likelihood for unforeseen delays in distribution. Most adjustments introduced by pharma are quick fixes to address immediate concerns ? the dust is still settling from the assimilation and divestment of larger manufacturing networks as a result of frenzied M&amp,A activities over the past decade.

Issues with supply chain sophistication: security

The pharma / biotech industry’s near absence of supply-chain sophistication spans the full length of the chain, from API sourcing, through manufacturing, to inventory management and distribution. An example of the former is the 2008 incident in which 81 deaths in the United States were linked to the drug heparin, a blood-thinning agent that contained adulterants in the active pharmaceutical ingredient (API) imported from China. The markedly different (and oftentimes more lax) regional regulatory and compliance laws in countries of API origin all but guarantee future weaknesses in quality assurance.


“The pharma / biotech industry’s near absence of supply-chain sophistication spans the full length of the chain…”


While the vast majority of contamination events are foreign in origin, US products are not immune. The fungal contamination of steroids produced by a Massachusetts compounding pharmacy, which sickened more than 700 people and killed 46, is one recent example.

On the distribution end, the pharma / biotech industry has been engaged in battle with counterfeiting. The recent discovery of counterfeit vials of Roche’s cancer therapy drug, Avastin (2012), highlights the ease with which counterfeit medicines can pass undetected through established distribution chains and wholesalers in industrialized nations and into the point of care.

US pharma groups make supply chain security pledge

At their 100th meeting this past month, the National Conference of Pharmaceutical Organizations (NCPO) ? with member organizations composed of US pharma, biotech and generic associations together with pharmacy and healthcare bodies ? gathered to discuss ways to help further secure the pharmaceutical supply chain. The discussions centered around three core areas: product tracing, Internet sales, and unused medicines disposal. The NCPO organizations agreed to key principles in each area:

(1) Product tracing:

“An electronic system to trace prescription drugs in the supply chain must be: 1. Uniform, 2. Apply nationally, and 3. Be based on internationally harmonized standards.” Further, the coalition recommended that any new requirement for product tracing must be implemented in a scalable, cost-effective manner.

(2) Internet pharmaceutical products sales:

The coalition notes that consumers are at significant risk because there are no assurances that products offered for sale through illegitimate Internet websites are properly stored or handled, let alone legitimate.

How far does the problem extend? Last fall, the US Food and Drug Administration (FDA) announced that it, in a collaborative effort with international regulatory agencies and regional law enforcement from 100 countries, took action against more than 4,000 Internet pharmacies that illegally sell unapproved drugs to consumers. The actions resulted in the shutdown of more than 18,000 illegal websites and the seizure of about $10.5 million worth of pharmaceutical products worldwide.


“On the distribution end, the pharma / biotech industry has been engaged in battle with counterfeiting.”


The members have called to “leaders [to] pledge to continue to work together to educate policy makers and the public about [illegitimate drugs], and to seek appropriate policy solutions”.

(3) Disposal of unused medicines:

The NCPO advises that “…any disposal option must not create new opportunities for diversion of unused medicines to re-enter the supply chain,” and that “leaders pledge to continue to… educate [all relevant stakeholders] on the appropriate use of medicines with the goal of helping to prevent abuse and misuse and promote safe disposal.”

Read the background document here.

IoM report: countering the problem of falsified and substandard drugs

A timely report on drug safety published by the Institute of Medicine (IoM) at the request of the FDA identifies important threats to the public health from falsified and substandard drugs sold in the United States. A key proposal: establish in the US a mandatory drug tracking system, and strengthen requirements for licensing pharmaceutical product wholesalers, a recommendation echoing that of the NCPO. Mandatory drug-tracking systems could use some form of RFID tag or barcodes to verify that a medication and the ingredients used to make it are authentic at every step, from the manufacturing plant to the pharmacy.


Figure 1: Loose pills of dubious origin for sale at a Cote d’Ivoire marketplace. Photo Credits: Issouf Sanogo/Getty Images (used in IOM report)

The report cites secondary wholesalers as the “weakest point” in the US drug distribution chain. State licensing boards in the United States should only license wholesalers that meet accreditation standards of the National Association of Boards of Pharmacy (NABP), as a way of strengthening the nation’s drug distribution system. The report also recommends the FDA and state licensing boards establish a public database with information on wholesalers with revoked or suspended licenses.

A further recommendation: increase access to technologies designed to identify counterfeit drugs. Tracking techniques can range from visual inspections to more advanced technologies such as mass spectrometry. Some technologies can be used in the field, while others require a higher level of technical expertise and access to sophisticated instrumentation. Not every country or region, however, has access to the hardware necessary to aid detection, the report notes. “Given the international nature of modern manufacturing and trade, every nation has a stake and a role to play in ensuring the production and sale of high-quality medications,” says Lawrence Gostin, Committee Chair of the IoM Report and global health law expert of the Georgetown University Law Center.

“Given the international nature of modern manufacturing and trade, every nation has a stake and a role to play in ensuring the production and sale of high-quality medications.”

Lawrence Gostin, Committee Chair, IoM Report.

As a potential solution, the IoM report recommends the National Institute of Standards and Technology (NIST) fund the development of a centralized repository for existing and newly disclosed methods of detection, sampling and analytical technologies of all levels of sophistication (from field / rapid screening technology to advanced laboratory techniques) to identify substandard and falsified medicines.

“Making detection technology more accessible in low- and middle-income countries would be invaluable to controlling the trade in falsified and substandard drugs,” the report asserts.


“What is clear is that a solution requires international agreement.”


FDA Commissioner Dr. Margaret Hamburg issued a press release commending the report. “The IOM report spotlights a critical global public health issue,” she said. “Falsified and substandard medicines adversely affect the lives of millions around the world, and the issue must be elevated to the highest levels of international discourse.”

An uncorrected proof of the IoM report (314 pp.) can be downloaded for free here.

International collaboration to protect public health required

Gaps in oversight of drug wholesalers, lax law enforcement and ineffective tracking tactics for pharmaceutical goods as they travel from manufacturer to consumer have all contributed to a growing trend of fake drugs flooding Western supply chains. The FDA already has some of the proposals mentioned above underway, including access to / development of better technologies, more global regulatory capacity, stronger monitoring and development of science-based standards. What is clear is that a solution requires international agreement. At the international level, productive discussion relies on cooperation and mutual trust to further strengthen this vital link in the supply chain.


Brosnan, Andrew. “Fake Avastin reveals weaknesses in pharma supply chain.” Ovum (2012 Feb. 24). Access at:

Buckley, GJ, Gostin LO (Eds.). “Countering the Problem of Falsified and Substandard Drugs.” IoM Report (February 2013). Access at:

Eban, K. “Drug theft goes big.” Fortune (2011 Mar. 31). Access at:

Food and Drug Administration. (2013 Feb 13). FDA Commissioner Margaret A. Hamburg’s Statement on the Institute of Medicine’s Report “Countering the Problem of Falsified and Substandard Drugs.” (Press Release). Access at:

Gaudin, S. “Drug maker goes social to end supply chain crisis.” Computerworld (2011 Jul. 25). Access at:

Gonzalez, A. “Want a Fast-Response Supply Chain? Facilitate People-to-People Communication.” Logistics Viewpoints (2011 Aug. 10). Access at:

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Miller, J. “Supply Chain Pain: Addressing supply-chain challenges.” Biopharm International (2011 May 1). 24(5):25-26. Access at:

NCPO Backgrounder and Policy Recommendations. “Pharmaceutical Supply Chain Security from Manufacture to Disposal” 99th Annual Meeting of the National Conference of Pharmaceutical Organizations (2013 Jan. 14). Access at:

Zawisza, J. “FDA Media Briefing on Heparin” (PDF). US Food and Drug Administration (2008 March 29).


About the author:

Katarina Sapeta is a scientific writer and editor by trade, with work published on numerous topics ranging from chemical synthesis to cancer biology to university educational materials and back. She currently writes for TAPI (Teva Active Pharmaceutical Ingredients) and completes her doctorate studies in synthetic organic chemistry at Western University (London, Canada). Contact her at:

How can pharma overcome security challenges, such as counterfeit drugs?