BY BEN AMES, SENIOR EDITOR
TRACK AND TRACE
THE PHARMACEUTICAL SUPPLY CHAIN MOVES BILLIONS OF DOLLARS WORTH OF
drugs and medical products each year in the U.S. alone. Like other supply chains handling
high-value, time-sensitive goods, it faces increasing demands from shippers and consignees to
maintain product integrity, and from the federal government to comply with regulations. All the
while, it is striving to prevent theft and counterfeiting.
The financial impact is enormous. The flow of counterfeit pharmaceuticals is on pace to equal
5 percent of the global drug market by 2016 and to cost the pharmaceutical industry about $70
billion in worldwide sales, according to a 2013 study, “Building New Strengths in the Healthcare
Supply Chain,” by consultancy McKinsey & Co. But the problem goes beyond money. People
suffering from diabetes, heart disease, HIV, and other diseases can become seriously ill if their
medication lacks therapeutic value because it is fake or stale.
The solution to the twin challenges of improved compliance and reduced counterfeiting may lie
with improving the supply chain’s track and trace capabilities, an obligation that will fall partly on
the shoulders of logistics professionals. The Drug Supply Chain Security Act (DSCSA)—a section
of the Drug Quality and Security Act (DQSA) of 2013—calls for the 10-year phase-in of an array
of requirements that will lead to the creation of an electronic track and trace system. Through this
system, the Food and Drug Administration (FDA) will be able to pinpoint the location of any drug
throughout the supply chain and drill down to the individual package level.
However, few in the field understand how to manage the flood of data that will need to be generated, stored, and retrieved in support of this ambitious system. Experts say that if companies
want to avoid stiff fines for noncompliance, they will have to make significant investments in
information technology and in increased training for supply chain personnel.
3PLs GET AHEAD OF THE CURVE
That’s not to say shippers will have to cope with all this on their own. Many will turn to
third-party logistics service providers (3PLs) for help. Although the new law relieves 3PLs of the
technologyreview
As new federal track and trace
requirements begin rolling out,
the pharmaceutical supply chain
confronts the challenge of
managing a flood of data.
Bitter medicine
