Counterfeit Drugs and Supply Chain Security

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1 Counterfeit Drugs and Supply Chain Security Rick Mitzner Senior Director, Engineering Technology Pfizer, Inc. Interphex April 21, 2015

2 Tragic Consequences Not If But When and Where May 7, children die in Haiti due to contaminated glycerin in acetaminophen syrup 2 2

3 Threats Across the Supply Chain From raw materials to finished product, threats exist throughout the supply chain Sourcing Production Logistics Market Intentional Adulteration Cargo Theft Diversion Counterfeiting 3

4 Impact on Manufacturing Strategies Where we buy raw materials, manufacture our products, and sell our products is changing Industry Trends Rise of emerging markets Healthcare spending Regional pricing pressures Generics share Increased supply chain complexity and risk Business Models Increased contract manufacturing Increased licensing arrangements Ongoing consolidation What are we doing about it? 4

5 Illicit Activity Impacts All Stages of the Supply Chain From: Raw materials Excipients APIs Components Drug products Packaging & Labeling Storage Distribution 5 5

6 Illicit Activity is Present and Threatens $1000 the Safety of Medicines Counterfeit DVDs $10,000 Illegal drugs $100,000 Counterfeit medicine $1,000,000 The criminal element is present, active, and business savvy Weak criminal penalties Relatively safe for criminals

7 Must Focus on End to End Supply Chain 1 Materials 2 Manufacturing Product 3 Authentication 4 Warehouse Security 5 Cargo Security Market 6 Surveillance Customer Supplier Oversight GMP Material Qualification Risk Mgmt Inspection and testing Security Transportation and logistics GMPs Security Incident reporting Anticounterfeiting Serialization Waste management Implementation of local serialization solutions Compliance with local security features requirements Auditing LSP Mgmt Segregation CTPAT Security Inventory Control GMP and GDP Carrier Assessment Shipment Tracking LSP Assessment Security Reporting of counterfeit signals Education and adoption of controls by distributors 7

8 Supply Chain Security: A Holistic Approach Functional Responsibilities Commercial Operations - Trading partner relationships - Serialization External Supply - Contractor selection - Contractor management Government Affairs - Legislative Influence - Pfizer business positions Procurement Supply Chain Security Team Logistics & Supply - Supplier selection - Supplier management -Logistic center security - Product conveyance security - Cargo Theft/Diversion Quality - Quality Systems - Supplier Quality Mngt - Adulteration - Regulatory Influence Environmental Health & Safety - Returned goods - Waste disposal Packaging Technology - Packaging technology - Serialization Pharm Sci - Supply Chain improvement synergies (front-end/external supply) Communications & Trade Media - Colleague Awareness - Industry Transparency Operational Excellence/ Network Performance - SCS Leadership - Program Owner - Continuous Improvement Global Security -Site security -Anti-Counterfeiting -Incident investigation /response

9 Intentional Adulteration Supplier Selection / Management Material Qualification Quality Agreements Audits Supply Chain Transparency Surveillance Testing Risk Assessment Person in Plant Security Assessments Management Notification / Response Program

10 Cargo Theft/Diversion Physical Site Security Conveyance Security Law Enforcement / Customs Collaboration Threat awareness Third Party Carrier Program Management Notification / Response Program Serialization

11 Global Cargo Theft Risk 11

12 Anti-counterfeiting Serialization Packaging Technology Consumer Education Counterfeit Medicines Laboratories Market Surveillance Program Law Enforcement / Customs / Government Collaborations Influencing Enforcement Legislation Disrupting Counterfeit Manufacturers Management Notification / Response Program Trade Policies/Business Practices

13 Serialization Business Drivers Patient Safety: Insure the integrity of pharmaceutical products throughout the supply chain Counterfeiting deterrent Deter re-introduction of stolen goods into supply chain (with T&T) Allows Authentication through the supply chain epedigree confirmed movement through legitimate supply chain Compliance: Increasing regulations (US and Global) US legislation: requires epedigree with pathway to Track and Trace. Unit level serialization by Nov EU Falsified Medicines Directive: requires serialization and tamper evidency in ~2017/2018 through EU country delegated acts (with pharmacy authentication) Emerging Markets: (Argentina, China, Turkey, India, etc.) have enacted Serialization regulations typically requiring Trace & Trace 13

14 Definitions: regulatory impact on operations Serialization Applying a unique identification code to the retail unit of sale GS1Standards Authentication Confirming the authenticity of the unique identification code, typically at the point of dispense Track and Trace Determining the location of product as it moves through the supply chain epedigree Documenting the chain of ownership of the product as it moves through the supply chain Aggregation and Inference (required for T&T) Every item, case and pallet is assigned a serial number Items are aggregated to cases (parent / child relationship) Cases are aggregated to pallets Unit level serial numbers can be inferred by reading the case or pallet serial number 14 14

15 Typically 1 integrated government report per mandate Integration with Trading Partners for traceability Some markets / other manufacturer s provision SNs DATA MANAGEMENT Internal Pharma Serialization Control Tower (SCT) External Pharma US EFPIA (Europe) Local Markets Brazil, China (Import), India Export, Korea, SA Phase II Role of Manufacturing, Logistics, CMOs Provision, apply and aggregate SNs Commission and notify SNs Manage inventory and SN data in parallel SUPPLY CHAIN Contract Mfg Packaging Line PharmaSite Pharma / CMO Plant Warehouse InterCompany & Market Logistics Sites/ LSP Wholesale Distributor Hospital / Pharmacy / Patient Key Serial Number Management Event Capture Reporting Data Transport /Product Flows Serialized Product Data 15

16 Serialization Program Structure Program Governance Supply Chain Security Executive Sponsor Program Governance Committee Corporate spokesperson Communicate business impact Elevate issues to Executive Team Endorse Program Deployment /Compliance Plan Endorse cost avoidance strategies (sourcing changes) Endorse investment deferrals and associated risks Participate in quarterly updates and elevate issues Program Operations Supply Network Enablement PMO Steering Team PMO Program Leads Capital Controls & Optimization Information Technology Enablement Oversight and guidance of PMO workstream activities Establish core solution strategies and scope Establish and monitor Program Deployment/Compliance Plan Stakeholder communication and awareness Day to day management of PMO Coordination of workstream activities Development of program metrics External Supply Enablement Industry Alignment / Customer Engagement Program Financial Management Supply Planning Enablement Logistics Enablement End User Chg Mgt & Training Market Enablement & Business Unit Engagement Program Operations Quality Operations 16

17 Serving patients is a privilege that comes with responsibilities Protect patient safety by sharing information and developing processes related to the integrity of the healthcare supply chain and the quality of materials within the supply chain 17 17

18 Thank you 18

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