pharmaceutical distribution: ensuring product integrity and patient safety mike broughton,...

Pharmaceutical Distribution: Ensuring Product Integrity and Patient Safety

Mike Broughton, Distribution Operations21st Century Transport Logistics SummitIndianapolis, IN 19 October 2005

USA Distribution Operations

Eli Lilly – Indiana Logistics Summit19 Oct 2005

Company ConfidentialCopyright © 2005 Eli Lilly and Company

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• Is distribution a core competency at your company?

• Does the distribution of our products provide a competitive advantage?

• Are there others that could pick, pack, store and ship product cheaper?

A: Ensure product integrity to assure product safety and patient safety

Pharmaceutical Distribution Strategic Questions

Lilly is set to open it’s new US Distribution Center in Plainfield this November! Lilly is set to open it’s new US Distribution Center in Plainfield this November!

Tra

ditio

nal

Q: What is the strategic imperative related to distribution?

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Strategic Questions



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Insulin Vial Supply Chain

= Lilly Node

= Affiliates

= Non-Lilly Node

Bulk Site

Form Sites Finish Sites End Markets

Indianapolis

Humulin BulkCrystals (BHI)

Fegersheim

GiessenRDC

Fegersheim

Seishin, Japan

Spain

Japan

Lilly Mexico

Indianapolis

Lilly Egypt, Cairo

MJPL, India

Human, Hungary

Human, Hungary

MJPL, India

Giessen

Alcobendas

Lilly Brazil

Indianapolis

Lilly Egypt

Brazil

Hungary (U40)

India

U100 10ml

U100 10ml

U100 & U40 – 10ml

U40 R, N,70/30, 50/50

U40, U100

U100 (4ml, 10ml), U40

BelgiumGermanyNetherlands

Austria Latvia RomaniaBulgaria LithuaniaCzech Rep. SloveniaBosnia & Herzegovina

Philippines Philippines

ArgentinaBoliviaCentral AmericaChileColombiaDominican RepEcuador

MexicoParaguayPeruUruguayVenezuelaWIZ (in 2005) Aruba

BahamasBahrainBarbadosBermudaCanadaCaymen Is.Cocos(Keeling) Is.CyprusFijiGrenadaGuamHaitiJamaicaJordanKuwait

LebanonMarshall Is.N. Mariana Is. OmanPapua New GuineaPuerto RicoQatarSaudi ArabiaSt. LuciaSyriaTrinidadUAEUSVirgin Is.Yemen

AustraliaBelgiumCanadaEstoniaEthiopiaFinlandGhanaGreeceKenyaS. Korea

LuxembourgMalaysiaMauritiusNew ZealandNorwaySingaporeSwedenTaiwanTanzaniaThailandUganda

AlgeriaArmeniaAzerbaijanBangladeshBahrainBelarusBotswanaBurkina FasoCameroonCent. African Rep.ChinaCongoCote D’IvoireDenmarkDjiboutiFranceGabonGeorgiaHong KongHungaryIcelandIndonesiaIrelandIsraelItalyIvory CoastKazakhstanKuwaitKyrgystanMozambiqueNambia

Libyan Arab JamahiryaNetherlandsNigeriaPakistanPalestinePhilippinesPolandPortugalRussiaSamoaSlovakiaSloveniaS. AfricaS. KoreaSpainSri LankaSvalbard & Jan MayenSwazilandSwitzerlandTongaTunisiaTurkeyUkraineUAEUKUzbekistanVietnamYemenZimbabwe

Hospira, US

U100 R (N in ‘06)

Egypt Pakistan KenyaBangladesh S. Africa

Lilly Mexico

EU in ‘0

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US Only

Farmak Ukraine

Sothema, MoroccoSothema, Mor Morocco

Ensuring product integrity around the globe!

Ensuring product integrity around the globe!

Insulin Shipments from Indianapolis

Temperature monitoring

Destination: Columbia

Destination: Columbia

Destination: Mexico

Destination: Mexico

Destination: Brazil

Destination: Brazil

Destination: Bahrain

Destination: Bahrain



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BulkBulk Form/FillForm/Fill FinishFinish DistributionDistribution

Securing the Supply Chain and Distribution

Relatively Secure

Product “At Risk”

There are a number of internal safeguards to protect product while it is within Lilly’s control

facilities.

There are a number of internal safeguards to protect product while it is within Lilly’s control

facilities.

DoctorDoctor

PayorEmployer /

HMO

PayorEmployer /

HMO

PatientPatient

WholesalerWholesaler

Drug ChainsPharmacy

Drug ChainsPharmacy

PBM/Mail-orderPharmacy

PBM/Mail-orderPharmacy

Sales ForceSales Force

InstitutionInstitution



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Every single code is unique

Non re-occurring

Encrypted

Mass Serialization: Security Codes

Mass Serialization at the item level will be essential to the Pharma industry in the future…

Mass serialization involves assigning a code to each individual item produced: pallet, case and item level coding - such codes must be unique and impossible to guess.

The FDA has concluded that mass serialization is “the single most powerful tool available to secure the U.S. drug supply.”

- FDA, “Combating Counterfeit Drugs”, February 2004

The FDA has concluded that mass serialization is “the single most powerful tool available to secure the U.S. drug supply.”

- FDA, “Combating Counterfeit Drugs”, February 2004



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Pharmacy

Wholesaler

PharmaManufacturers

apply RFID tags

CentralDatabase

Chain Drug StoreDistribution Centers

Hospitals

The FDA’s vision of an Electronic Pedigree21.203D2A9.16E8B8.719BAE03C

Version — 8 bitsMfg. — 28 bits(> 268 Million)

Product Class — 24 bits(> 16 million)

Serial Number — 36 bits(> 68 billion)

21.203D2A9.16E8B8.719BAE03C

Version — 8 bitsMfg. — 28 bits(> 268 Million)

Product Class — 24 bits(> 16 million)

Serial Number — 36 bits(> 68 billion)

RFID Electronic Records:Receipt and Ship Dates

RegulatoryAgency

There are a number of

unanswered, complex

questions regarding electronic

product code standards, IT infrastructure, privacy, etc!!

There are a number of

unanswered, complex

questions regarding electronic

product code standards, IT infrastructure, privacy, etc!!

Electronic Pedigree



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Pedigree Developments in Europe

Serial Numbering – Sequential Coding in Europe• Application of unique number to item level • Communication of applied numbers to central database • Control of central database by national Ministry of Health

Drivers• Cost control of Health Care system• Track & Trace products through entire pharma supply chain• Avoid counterfeits and theft• Increase patient safety

Countries involved, status and main driver • Belgium: Implemented, reimbursement fraud• Italy: Partly implemented, cost control and counterfeits• Portugal: New requirement, cost control • Russia: New requirement - patient safety , cost control• Spain and others to follow

Mass Serialization: Europe



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Enhanced communications via the following sources: •EDI capabilities •E-Mail•Direct Link Access •Internet Access •FastFax Reporting •Load Tracing and Tendering via the Internet

The Future: Real Time visibility

Best-in-class Examples

Cargo and Position reports

Photo sources: Envirotainer/DHL, Qualcomm, Prime Carriers



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Opportunities for Indiana?…

• Track and Trace technologies • Electronic Pedigrees – database security,

information sharing• Cold Chain Management – packaging and shipping

containers• Distribution hub – it’s hard to believe… there is

currently no wholesale pharma distribution operation in the state!

• Indianapolis Airport: A viable alternative to congested ports for high priced (e.g. pharmaceutical) products from China and India

Conclusion

“The biggest single external element influencing pharmaceutical distribution operations concerns all the issues surrounding quality, security and validation processes.”

- Pharmaceutical Industry Analyst

“The biggest single external element influencing pharmaceutical distribution operations concerns all the issues surrounding quality, security and validation processes.”

- Pharmaceutical Industry Analyst

Back-up Slides



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Distribution Strategy: What needs to be addressed? Now and in the future...

• Regulatory focus on distribution is increasing• More GMP / validation efforts • Cold-Chain• Pedigree requirements

• Security/Product Safety in handling and transport becoming more important

• # of SKUs could grow significantly due to country-specifc tagging serialization requirements

• Changes in product portfolios drive storage space requirements• Shift towards application devices/pens ongoing • E.g. Humalog, based on Insulin Equivalents: Vials (1) Cartridges (4x) Disposable

Pens (7x)• Special picking areas for special security substances

• Supply Chain Management• Product flows need to be tightly controlled• Importance increases with EU accession



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Italy: General Overview

Italian MoH published new decree on Jan 4th 2005

Italian MoH has established a central database to track pharmaceutical products

Initial communication with central database via internet

Long term goal is to track & trace products through the entire supply chain from manufacturer to patient

Control of health care expense and improvement of patient safety

Mass Serialization: Europe

pharmaceutical distribution: ensuring product integrity and patient safety mike broughton,...

Documents

product safety

ship product cheaper

new us distribution

drug supply

cost control russia

item level coding

futuremass serialization

single code