Coming Soon to a Supply Chain Near You

By Bob Celeste
GS1 Healthcare U.S.

I’ve often wondered how the first person to imagine the use of a new technology went about explaining the need for it to those who held the purse strings. Take the cell phone, for example. Today, if you were to ask yourself, or better yet, your teenage son or daughter, “So, why do you think you need a cell phone?” there would be a laundry list of reasons ranging from the trivial (I like the pictures it takes) to the important (I can keep in touch with home, work, and friends).

Bob Celeste

Imagine Martin Cooper, the acknowledged father of the cell phone in the 1970s. (It was called a car phone back then.) As stated in a 2003 San Francisco Chronicle article: “Standing on a sidewalk across from the Hilton Hotel in mid-town Manhattan 30 years ago, Martin Cooper did something never done before. To the bewilderment of passers-by, the Motorola project manager held a 2-lb box of wires and circuits to his ear and started talking into it, becoming the first person to place a public call on a handheld cellular telephone.”¹ Can you imagine the difficulty Cooper must have had convincing others of the merits of adopting cell phone technology? Essentially, he was advocating spending billions of dollars in new technology and working to solve countless number of unknown technical problems, all to make the exact same phone call that could be made from every home, office, or street corner.

This is the same situation we find ourselves in when trying to explain the future of the pharmaceutical supply chain as serialization and tracking of products becomes more of a reality (for example, drug pedigree). Consider the state of the supply chain, what is significant about the current serialization and pedigree trajectory, and what a number of visionary companies in the supply chain are working toward in terms of nonregulatory compliance benefits to both the patient and supply chain. We will use examples from the pharmaceutical supply chain for this article; however, FDA’s recent movement toward a Unique Device Identifier means the medical device community may well share pharma’s future.

The Changing Supply Chain: Cops and Robbers
Anyyone who has read this magazine or attended a supply-chain conference within the past few years knows the stories well: Drug dealers have turned into pharmaceutical counterfeiters because of lenient penalties and easy access to legitimate wholesaler licenses.

It’s no secret that the growth in the adoption of unique identifiers for pharmaceuticals (serialization), pedigree systems, and track and trace systems have been encouraged greatly by federal and state pedigree and serialization laws, regulations, and guidance that seek to protect patients and the supply chain from counterfeit and adulterated drugs. This encouragement, in many cases, has gone hand in hand with a sincere desire to understand the nuances of implementing a solution that has significant impact on almost every aspect of companies involved in the global healthcare supply chain.

In the past six years, or so, the industry has focused on how to share secured pedigree data efficiently within the supply chain. During that time, much has been learned about the magnitude of change required of systems and business practices to produce uniquely identified pharmaceuticals, share information on and inventory those products, and identify exception processes that need to be planned for in a serialized world. Remember, Six Sigma performance is expected. 

The year 2008 was a seminal year for the healthcare industry. FDA published two dockets calling for comments on a range of topics covering serialization, pedigree, and related technologies. Most notably, the California Board of Pharmacy amended its regulation to move its 2011 deadline for serialization and pedigree. California now has a tiered deadline for supply-chain participants starting in 2015 for manufacturers and ending in 2017 for pharmacy compliance.

When the California board made known its decision, a palpable sigh of relief was heard throughout the industry. These actions by FDA and the California Board of Pharmacy have allowed the industry to be able to step back and address complexities that were little known a few years ago. Industry can now apply new standards that help simplify the new data stream and business processes.

The Visionaries
Given the chance to develop an improved version of a supply-chain solution without having to go prime time prematurely, visionaries from across the supply chain have come together to consider what other patient safety and supply-chain efficiency benefits could be extracted from the emerging serialization and track and trace architecture. Much like those who foresaw the added uses of cellular technology beyond simple phone calls, these men and women are engaged in thoughtful analysis, design, and action through trial and implementation of solutions that take advantage of the future ubiquitous data, services, and trading partner agreements.

These visionaries see additional benefit in applying granular event data and serialized product data in areas such as raw material management, returns, operating room management, and patient home medication management. Much like Cooper’s first steps with cell phone technologies, they are working toward a future vision while making use of what they can today.
The architecture that is being built and used today takes advantage of a number of GS1 standards that allow a more accurate and efficient flow of data. They can also provide new levels of data that industry can leverage to achieve greater patient safety and supply-chain efficiency.

Freeze-Dried Data
All GS1 standards are built upon a simple concept: certain groups of data can be represented by an identifier. Perhaps a more fun way of looking at it would be to consider it “freeze-dried data.” Wikipedia defines freeze drying as “a dehydration process typically used to preserve a perishable material or make the material more convenient for transport.” It’s the “more convenient for transportation” part that we are interested in here. GS1 has defined nine different identifiers for groups of data, defining, for example, products, locations, logistic units, assets, documents, etc. Sharing the group of data is called “data synchronization.” This allows trading partners to use the identifier in subsequent transactions, messages, and communications that are later reconstituted with previously synchronized data.

Today, we define inventories via count and resolve inventory questions via a sort of convoluted word problem. For example, say John has 500 cases and sells 20 cases to Sally and 200 cases to Bill, who returns 50 cases, and Fred (John’s warehouse person) damages 10 cases in the famous “forklift incident.” Can John commit to Peggy’s order for 300 cases (all within the same lot number)? (It’s a trick question because I left out the lot counting.)

We add and subtract to our inventory. When we pick an order, we hope we have an accurate count. In a serialized world, we will know our inventory by name, or, rather, the number in the case of the GS1 identifier for products (GTIN). We will know exactly which items are in inventory. And by virtue of their associated data, we know whether or not we can fill Peggy’s order. This is a simple example, but, you can see that it is easy to lose track as inventories are moved through the supply chain. It is especially hard to untangle product counts when inventories are mixed from different shipments of the same product, as often happens after the initial manufacturer shipment.

A typical drug pedigree contains data on a number of “groups,” most notably, the pharmaceutical product, logistic unit, seller location, buyer location, etc. In a serialized world, where data are multiplied on order of magnitude in comparison with the “counting” world, it is essential that we make use of the GS1 identifiers and synchronization to trim down the data flowing through the supply chain.

Transactions, Events, Dispositions, Additional Data
As in our inventory example above, today’s transactions are predominantly driven by count. We order by count, deliver by count, and pay by count. Unfortunately, we also attempt to reconcile by count, return by count, and audit by count. In a serialized world, some of these processes become more accurate and verifiable. (Consider returned goods—are they really the items that you shipped?)

When processes are performed with serialized items, we can know more about each item than we have in the past. This knowledge can lead to new ways of doing business together and new ways of providing benefit to the patients we all ultimately seek to serve.

As individually identified items move within a company’s span of control and through the greater supply chain, we have the ability to know more about their individual status (or disposition), the processes they have been involved with (business events), and additional data gathered along the way (i.e., temperature changes). GS1 and EPCglobal standards define the dimensions of these events, dispositions, and additional data (most notably through the EPCIS, Core Business Vocabulary, ONS and Tag Data Standards). Systems built on these standards can share such new data within companies and (with the correct permission) between companies.

Finding Each Other
The visionaries that I spoke about recognize that such “individualized information” can be interpreted and used in a number of ways, from receiving or providing earlier business signals to providing greater visibility into vendor-managed inventories. However, the healthcare supply chain is multitiered. As a result, not all participants in the supply chain have a direct relationship with the entire body of participants. There are situations in which it would be beneficial for supply-chain partners that do not have a direct relationship to be able to first find each other and then to use such “individualized information” for mutual benefit (authentication of product identification, vendor-managed inventory, recalls, etc.). These companies need a mechanism to be able to find each other electronically, prove they are who they say they are, and then share information that each other needs.

Examples of this scenario may be a pharmacy finding and receiving information from a manufacturer  or, in the future, a patient finding the product manufacturer or a pharmacist to better manage medications at home. This act of finding each other, authenticating who we say we are, and then being directed to the party with whom we would like to communicate with electronically is referred to as a Discovery Service. (GS1 and EPCglobal are defining this standard currently.) It sounds highly technical and complicated, but it could be made as easy as placing a call on your cell phone.

So, once we can find each other and are able to trade all sorts of information on the things we manage daily, what can we actually do with these data? Again, back to the visionaries, who today are actively identifying new opportunities, defining steps to implementation, and partnering to use this architecture today and as it matures. To date, a group within GS1 Healthcare U.S., the Secure Supply Chain Task Force, has identified more than 35 opportunities ranging from charge backs, rebates, and cold-chain management to expiration management to shrink/loss prevention. As each opportunity is uncovered, a detailed opportunity or issue analysis is developed, followed by an overall supply-chain responsibility matrix. Companies may pair up to test and implement agreements and data-sharing as necessary.
 
Join the Visionaries
I invite you to join the visionaries who are building and implementing solutions for the future. If you are interested in joining in the definition of healthcare supply-chain standards, please contact GS1 Healthcare (www.gs1.org). And to join those in the U.S. who are implementing these standards, please contact GS1 Healthcare U.S. (www.gs1us.org/healthcare).

1. This article appeared on page B - 1 of the San Francisco Chronicle: http://sfgatez.com/cgi-bin/article.cgi?f=/c/a/2003/04/03/BU56141.DTL