The true scope of counterfeiting is unknown. The World Health Organization (WHO) estimates that between less than 1 percent to more than 30 percent of drugs sold in any given market are impacted. This represents hundreds of millions of units of questionable drug products annually.
In response to these safety concerns, more than 40 countries - from the U.S., China, India, South Korea, Brazil and members of the European Union - have introduced track and trace laws to identify, track and verify pharmaceutical products as they pass through the supply chain. By 2019, more than 75 percent of the world’s prescription medications, valued at almost one trillion dollars, will be protected by legislation.
The Supply Chain Becomes a Global, Interconnected Supply Network
Due to emerging market demand for pharmaceuticals and a parallel growth of increasingly specialized medicines, the pharmaceutical supply chain has shifted from predominantly a local chain serving local markets to an inherently global supply network linking diverse members across multiple continents and serving global patient populations. Pharmaceutical companies have virtualized many operations and established complex new supply relationships with contract manufacturers. Specialized medicines and global market expansion have driven expansion and diversity in downstream wholesale distribution and pharmacy dispenser relationships as well.
Track and trace compliance adds a never before seen level of complexity and connectivity into the mix. Across the entire lifecycle of each unit of medicine, from a packaging run at a packaging site to dispensation at the pharmacy, every business process or product movement can spark new data to be generated, analyzed or exchanged between systems and partners. In addition, companies supplying even a single medicine produced for patients in three different markets, say the United States, the European Union and South Korea, face a myriad of package, serialization, supply/trade partner data exchange, and governmental compliance reporting regulations to prepare for. Even more challenging, at each level from packaging line to supply network, the transaction requirements and data management issues are different from country to country.
Track and trace compliance adds a completely new level of network connectivity into the mix.
New Track and Trace Regulations Break Traditional Infrastructures
The traditional model of buying servers, building a big relational database, creating a large batch processing enterprise infrastructure and constructing point-to-point B2B connections is crumbling in the face of a serialized track and trace world where each unit of medicine, each network connection, and each product and supply chain event will spawn a flood of information and transaction activity. Specifically in the two key areas of serialized product transaction processing, and supply network integrations, companies now face challenges of data and transaction scalability and network connectivity that are orders of magnitude greater than ever before.
Serialized Product Transaction Processing
Shifting from volumetric, lot-level management of production orders to tracking of serialized products at the unit level creates an explosion of transactions flowing between systems controlling serialization management, packaging lines and distribution centers. Previously, the production and distribution of an order of a 5,000 units might have generated a total of four transactions to cover batch creation, pick/ship of the pallet and sending of the ASN. In a serialized compliance world, this same action now needs to account for the unique identity of each and every unit plus additional activities throughout the production and distribution cycle. This order of 5,000 units may now create over 30,000 transaction events to manage everything from serial number provisioning, commissioning and aggregation to pick, ship and sending of serialized product information. A company can expect a rough 10,000x increase in transaction processing and this doesn’t even account for the events generated through product damage, sampling, pallet and case reconfiguration, supply chain verification inquiries and exception processes. Transaction processing throughput also becomes an issue as companies face questions on how to handle a commissioning request of 100,000 serial numbers or verification of serial number identity for a pallet of 5,000 units sitting in receiving.
This new level of product identity and transaction granularity also creates a massive increase in database storage. While physical storage is getting cheap, the overhead of managing, accessing and using such massive data isn’t. In our previous example, the amount of database storage required to capture the lot-level product and transaction data is around 4KB in a traditional relational database. In a serialized world this information grows to over 5MB as the information must now be kept in a normalized EPCIS repository to support the granular serialized data generated and the myriad of ways that the company may need to access and relate the information. Scaled to yearly production of 50 million units, this may produce 50GB of live, transactional compliance information managed in a system which is integrated to and exchanging information with production/packaging, distribution and supply network systems.
Track and trace compliance adds a completely new level of scalability into the mix.
Supply Network Partner Integrations
The network challenges are just as daunting. Serialization and related track and trace regulation across this network creates an explosive rise in complexity and activity. The traditional supply chain was a linear one, focused at the aggregate level of batches and orders. Produce a batch of product or ship a truckload of medicine and interactions between companies were dominated by information exchanges between direct trading partners of purchase orders, packing slips and the like. Products were identified across these transactions by product type and quantity, in paper, PDF or spreadsheet form.
Today’s serialized track and trace network is hyper-connected, highly bi-directional and event-based. A mid-sized pharma company may use a dozen or more internal packaging sites and external contract partners to produce their serialized products for different markets. All of these sites and their different serialization line management systems need to be integrated across multiple transactions, exchanging serialized packaging information and related data at the individual package level when triggered by numerous operational events. The challenges continue as the serialized product moves through the downstream supply network. Hundreds to tens of thousands of direct and indirect trading partners, including wholesale distributors, repackagers, pharmacies, hospitals and even governmental agencies need to be connected for serialized product data exchange as products are sold, distributed, analyzed during investigations and verified during saleable returns operations.
Track and trace compliance requires a new infrastructure paradigm to work.
Thinking about the Global Supply Chain in a New Way
As the pharmaceutical industry moves toward mass serialization and the great complexities it creates, it can be tempting to narrowly focus on the thought: “I just have to put serial numbers on bottles or on packages.” While an important part of the challenge and one that a company may feel the most control over, this packaging question ignores the larger compliance issues and risks. A better question and place to start is: “What markets do I serve, what regulations will I face and how will these network and data requirements impact my package serialization program?”
The next question is: “What type of infrastructure do I have in place that can help me do that?”If the company has the viewpoint that this is a packaging challenge or a serial number data storage issue, it’s natural to look first at existing solutions in use today within the company. The problem is, global track and trace compliance isn’t a traditional enterprise or supply chain question and cannot be solved by traditional enterprise solutions. It needs a fundamentally new way of thinking.
Track and trace compliance changes the current business model.
The Need to Move to a Network-Based Public Cloud Architecture
The pharmaceutical industry needs a platform that can solve the fundamental network-centric challenge that global track and trace compliance creates, facilitating connectivity, enabling data exchange, ensuring agility, and guaranteeing compliance – and do all of that in a cost-effective manner. Public, network-tenant cloud architecture, leveraging a world-class global infrastructure such as that of Amazon Web Services, is the only approach that delivers the network connectivity, elastic scalability, and system reliability for today’s global pharma supply network.
Network-Tenant Architectures Ensure Connectivity in an Evolving World
In a network-tenant solution, interactions with other companies are a paved road and a singular process: you integrate into the network once, and can then interact with everyone. Once a company, be it a manufacturer, wholesaler or pharmacy, connects to the cloud network platform, they have immediate connectivity to all of their supply chain partners on that network to exchange compliance and business information. The company is no longer responsible for developing fragile point-to-point integrations with each of their diverse global partners.
Network tenancy also provides data translation and transportation, enabling seamless information exchange in a regulatory world with incomplete standards and diverse corporate data preferences. Think of it like the interstate highway or the electrical grid ensuring free flow across the network while enabling diverse entities to join in a simple and standard way.
The network-tenant approach on a public cloud also eliminates a major headache faced by companies today: keeping up with continually evolving regulatory requirements and network preferences. Controlled software updates can made on the platform at regularly scheduled intervals, not only ensuring that all members maintain secure compliance with regulations but also eliminating the risk of multiple incompatible versions of an application being used simultaneously by two members who need to exchange compliance data. If data exchange standard change, this single connection to the network also eliminates massive B2B reengineering for a company.
Native Cloud Architectures Deliver the Required Transaction Scalability, Reliability
Going back to the example of the pharmaceutical manufacturer that produces 50 million units annually and generates 30,000 transactions per pallet – well, these storage and transaction processing levels are just the beginning. With record retention regulations and business best practices mandating that such data be stored for 10 years or more, traditional enterprise infrastructures simply break down.
Native cloud architecture on Amazon Web Services can utilize tools which are explicitly designed to enable massive scalability in data management, global transaction processing and business analytics yet provide critical elasticity in resources. A NoSQL-based data architecture can deliver not only massive transaction scale but also do it with fast, consistent read/write performance regardless of size. A dynamic transaction and queuing platform can elastically grow to meet workload while distributing work across the infrastructure to achieve high throughput and consistent processing performance.
Such native cloud architecture also inherently supports the necessary system reliability critical to pharmaceutical production and distribution in a global compliance environment. Not only does the underlying global architecture benefit from the 11 nines durability of the infrastructure, it also enables active-active redundancy across data centers, providing a continuous availability level which is unachievable at any reasonable cost for traditional enterprise architecture.
Track and trace compliance cannot be effective in the long term without a network-tenant cloud architecture.
Supply Chain Success in the New Global Landscape
To succeed in the new global, regulated landscape, the pharmaceutical supply chain needs a new data management model and network-centric approach that can scale to manage trillions of objects and transactions, adapt to continually evolving network connectivity requirements, and ensure reliable exchange of compliance data between more than one million global network members.
The stakes are high – and there’s no question that network-tenant cloud architecture not only changes the game but is a necessary unpinning for this highly regulated and fast evolving environment.
Done right, such architecture enables residents to share compliance-related business processes with diverse global supply and trading partners; seamlessly exchange data in a world with conflicting data standards; accommodate the massive scale demands of global serialization; and ensure supply to the trade partners and patients that need it.
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