Addressing Global Risk and Opportunities
Response to regulatory uncertainties and rapid innovation in the global supply chains for temperature-controlled medicines were highlighted at the 8th Annual Conference of the Bio Supply Management Alliance (BSMA). Although much attention was naturally placed on large molecule biotech drugs, several speakers made the point that every product has prescribed temperature ranges, even tablets shipped at “ambient temperatures”. A veteran of the cold chain industry, Douglas Wettergren of Envirotainer remarked, “This was our seventh year attending the BSMA fall event and this was by far the largest one in terms of delegate attendance. It is nice to see the interest grow as this is my most valued and favorite industry show of the season. BSMA sets the bar as the best opportunity to network with executive level decision makers in the Biotech industry.”
Pain in the Supply Chain and Healthcare Trends in the World: Survey Report
Robin Hooker, Director of Global Strategy for Healthcare Logistics at UPS, updated attendees on the latest UPS “Pain in the Chain” survey and related healthcare trends impacting the biopharma supply chain. Focusing on demographics, he stated that “While China, India, and the USA are currently the three largest countries by population, by 2050, both Pakistan and Nigeria could be challenging for number three. Second, median ages are rising. In the US, it’s the Baby Boomers, in Asia, the Silver Tsunami. The foreign markets most impacted are Japan, S. Korea, Germany and China where the median ages are rising much faster to reach the middle 50s. The third likely trend is that rising economic shifts will rebalance global economies to a middle-class economy by the mid-2020.”
Hooker described the big issue to be chronic disease in the Us where 50% of the population will have one chronic disease and 25% will have two or more. In addition, the percentages of undiagnosed diabetes will increase to 55% from 2015 to 2035. Cancer cases in the US are expected to rise from 13.2 million to 22.2 million between now and 2030 at a cost of $290B in 2010 rising to $458B in 2030.
He pointed out that the biggest headwind to meeting the growing demand is the growing sophistication of regulatory agencies worldwide, which increases the cost and complexity of the supply chain. In the US, another big issue is the growing percentage of GDP spent on healthcare, projected to grow from 14% to 20% by 2021. By comparison, the next largest countries spend in the low teens as a percent of GDP. The US healthcare system contains a lot of excess costs with additional improvement in results or quality of care. As a result, payers will exercise increasing no power. By applying similar savings realized in high-tech, industrial and retail supply chains, biopharma companies can help reduce the costs.
Hooker identified four main trends implied by these demographics:
- Companies are consolidating. For simple proof, 2014 and 2015 were record years for M&A activity. He noted that it may take anywhere from three months to several years to consolidate supply chains.
- Companies are specializing by divesting core assets and also focusing on orphan or specialized diseases. He noted the increase in this category from 260 in 2014 to 290 drugs in 2015.
- Companies are converging, meaning they are operating in different market spaces. As one example, CVS pulled all tobacco from their merchandising plans and are rebranding the company as a healthcare provider.
- Companies are increasingly participating in collaborations or joint ventures as models for drug discovery, which works very well. The current supply chain is linear and hence potentially vulnerable.
Instead, he proposed that the industry needs to develop supply chain fabrics or networks where contingency planning, risk mitigation and business continuity strategies reign supreme.
Validating Cold-Chain Processes: A Beneficial Prerogative!
Gary Hutchinson, President of Modality Solutions, focused on process and packaging validation for the biotech industry. The engineering and validation company helps customers develop cold-chain management solutions to convince global regulators that the supply chain is controlled and the product can be delivered safely. Presenting “A Process Validation Guide for Cold Chain Logistics: Ensuring Compliance Globally”, he remarked that it would be wise to integrate stability studies with packaging qualifications and tie it into a risk-based approach to supply chain validation. The process and document creation is very similar to that used in the biopharma manufacturing process.
Hutchinson reminded the attendees that “Biologics are driving the new supply chain and the basis of biologics, monoclonal antibodies, basically set the stage for cold chain distribution. As evidence, 19 of the top 50 drugs currently are monoclonal antibodies and 70% of drugs approved in 2013 were temperature sensitive complex proteins, often for treating orphan disease states. These therapies are very susceptible to extremes in temperature, shock, vibration, barometric pressure, and humidity. Regulators understand these issues and ask many questions, so a company’s regulatory strategy must be ready to answer them.”
He elaborated, “Any cold-chain process validation must respond to regulators in five major categories. First, quality management must demonstrate how the company manages and documents non-conformances and exceptions in the distribution process, including change control. Second, regulators want to see that the executive management team is actively engaged and focused on the supply chain process with regular reviews. Third, regulators always consider risk management processes important. These are very similar to those used in manufacturing process development and are readily adaptable to the supply chain. Fourth, regulators now have a greater expectation that a biopharma company can demonstrate product stability for long-term storage and distribution including logistics. They are particularly interested when the product travels very long distances to reach the destination. Fifth, Gary recommended that the key to successfully qualifying a product with regulators is to begin with a validation master plan. Demonstrating to regulators that a company is following the master plan is crucial and reduces regulatory complications.”
Finally, Hutchinson observed, “Since so many companies are outsourcing or partnering with other companies, regulators are particularly interested in how the company is managing its logistics partners. The initiative regarding partners began with the EMA, which now requires that companies must have quality agreements with all major partners and be measuring and documenting heat performance metrics.”
Gaining Cold-Chain Visibility: New Innovations in Data Acquisition
Rich Kilmer, CEO of CargoSense, emphasized that the whole point of supply chain visibility is to use data for validation to confirm product stability. In his presentation, “Wiring the Biotech Supply Chain for Actionable Intelligence, Accountability & Overall Process Improvement”, he stressed the importance of actionable intelligence over and above mere data acquisition.
Kilmer emphasized that “Data can also assess the quality of service (QoS) from logistics providers. Currently, once a shipment leaves the manufacturing plant, supply chain managers often have limited or no product visibility until it arrives at the destination. If there were issues with the shipment, the biopharma company has to backtrack and determine what happened between origin and destination. By applying new innovations in cold-chain visibility, companies can measure the performance of each lane, which reduces the cost quality control of and returns.”
The EMA’s GDP guidelines now require that a shipper must measure the temperature conditions of the product if it’s marked as a temperature sensitive product. India has also adopted exactly the same language as the EU. In the US, DQSA requires companies to actually track, monitor and manage the chain of custody of their drugs.
Rich noted that “many different loggers can capture temperature and other environmental conditions. Ideally, the system needs to capture and analyze all the data. If it identifies a temperature excursion in the product that may affect product quality, the company must conduct a mandatory root cause analysis per the GDP. The average industry cost is $3,000 per incident and another company reported costs as high as $10,000 per incident.”
CargoSense has advanced the industry with the use of logistics beacons versus GPS. Because GPS devices are transmitters, they require each individual airline’s approval. However, a low-energy Bluetooth sensor is really a miniature database. Because it doesn’t transmit during shipment, it doesn’t require special approval. Applying Apple’s iBeacon technology, the beacon turns on the sensor in the shipment to record the event (the contact with the beacon). An individually identifiable beacon is installed in every logistics asset. Since each beacon is individually identified, the sensor records the time to the second that it encounters a beacon.
Kilmer explained that “the captured data allows users to produce a root cause analysis quickly, track and analyze trends, and conduct aggregate analysis. Beacon technology is an open-source, vendor-neutral technology that freight forwarders can push out to their providers. This allows supply chain managers to track lanes and assess performance. The low-energy Bluetooth 4 beacon broadcasts three times per minute and lasts five years on one battery. The sensor in the shipment can record data for 60 days in a row. Users can then connect the sensor via USB port to download the data. One medical device manufacturer wants to manufacture the sensors as an integral element in their product. This gives them full tracking in their own facilities and throughout the logistics process for 60 days. They can see where damage might be occurring, even in their own facility.”
Product tags are another Bluetooth low energy device with a battery that holds all the data required for serialization including details such as, lot numbers, expiration date, etc. The tags are like having a miniature database right in the product that provide product unit, mass, thermal properties, R-value, and environmental requirements of the product. The sensor can read the product needs. If a product, like insulin, goes below 1.8° C for more than 45 minutes it becomes unstable. If it goes above 7.8°C for more than 45 minutes, it’s also unstable. If it goes above 9°C for five minutes it’s totally dead. The sensor records these events. If it detects a temperature outside its range, it marks the product unit as “bad”.
Kilmer reminded attendees, “… there are already 3.5 billion readers and 3.5 billion laptops that can read product tags right now. Every iPhone, every Android device, every laptop, and every tablet made in the last three years can track these tags. These solutions push intelligence down to better understand product stability, the quality of service, and working in real-time. Together, the tags and beacon sensors enable biopharma shippers to deliver quality products, which is the goal of every logistics company.”
PANEL: Industry Executives Address Technologies and Practices for Compliance in the Temperature-Controlled Supply Chain
Moderator: Vishal Singal, Vice President, Cold Chain & Emerging Markets, BSMA, and Principal, IMS
Jim Peyton, Associate Director Supply Chain, Gilead Sciences, stated, “We’ve been working determining the proper packaging — active or passive. We’re also in the process of validating our software and identifying which temperature monitoring devices or trackers to use. One of our goals is to harmonize our processes across all of our locations so we’re all using the same systems for our supply chains. We also produce quite a combination of drugs and APIs that we ship back and forth to and from our partners. Regulatory influences can be confusing, even conflicting at times.”
Doug Wettergren, Business Area Key Account – The Americas, Envirotainer, added, “We’ve launched an education program that focuses on 40 touch points in the cold-chain. The Envirotainer Academy was launched within the last year with a few modules to begin and has mushroomed to over 25,000 modules completed to date. On another front, we started several new telemetry pilot projects with different GPS devices so that we’re in alignment with the communications and technology points made here at this conference. We have also begun to offer availability guarantees now that we’ve tripled our production of the newest E2 technology, which we’ve just launched in Europe.”
Gary Hutchinson, President, Modality Solutions, provided a unique dimension of understanding by disclosing, “We spend a lot of time helping companies of all sizes from one-molecule companies to large multi-nationals integrate their cold-chain management systems. The point is to get those processes to a point that biopharma companies can convince regulators that they can deliver their products while maintaining very high quality with minimal disruption in the supply chain. Every biopharma company needs to develop a strategy early in the process to get their cold-chain process approved. Doing the work up front really pays dividends in the end.”
Sophia Sharp-Donaldson, Sr. Director and Head of Global Sourcing & Procurement, Baxalta US, Inc., explained, “We’re a recent spin-off from Baxter Labs, a medium-sized biotech company. We’ve centralizing accountability for all of our processes through coaching, qualifications, and understanding the regulations in a center-led model. We’ve achieved control with a lot of partners and vendors, which is critical because we pretty much outsource everything. We’ve moved qualification and validation of lanes and logistics out of quality into our organization. This gives us better control with our regulatory agencies because we are more business focused. Although quality control is a good place for these activities, we saw that quality was more linked to CGMP and not CGDP. We felt we could improve, be more agile, and more responsive by moving into the center-lead global logistics organization. By restructuring our organization and collaborating with some of the other companies at this conference, we’ve been able to develop strategies to successfully approach the regulatory agencies in a rapidly changing environment.”
Wrapping up the track, Vishal Singal, the Chairman of the Steering Committee for Temperature-Controlled Distribution, observed, “The widely-represented steering committee of BSMA is enabling the collaboration between technology innovators, biopharma companies, service providers and logistics players. The dialog between the various stakeholders is driving innovations for building a streamlined supply chain to achieve efficiency, accountability, agility and regulatory compliance. We are building a unique platform for the stakeholders.”