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The following is a conversation with Jorge Rodriguez, vice president of operations at Miami-based Novis Pharmaceuticals.
Q: Give us a profile of Novis's supply chain.
Rodriguez: Novis Pharmaceuticals is a secondary wholesale distributor of prescription drugs with forecasted sales of approximately $100m this year. We buy the majority of our products direct from manufacturers, but a certain percentage - around 20 percent - are purchased from authorized distributors. These products move through a secondary supply chain, meaning that there is another vendor involved in the process.
We have a centralized distribution center in Miami and we have satellite locations in California, Illinois, Pennsylvania and, soon, in Massachusetts. We also have a facility in Puerto Rico. These satellite locations are primarily to service emergency needs of hospitals or retail pharmacies.
Q: Can you help us understand the development of e-pedigree requirements?
Rodriguez: Back in 2003, Gov. Bush of Florida signed a bill that implemented e-pedigree regulations for the state, making Florida a leader in enhancing regulatory compliance in this area. By enacting e-pedigree regulations, Florida basically set the standard, requiring that pharmaceutical products have to be accompanied by a pedigree before they can be shipped into or out of the state. Basically, the reason behind this whole movement was that in our industry, at that time, a lot of product was sold and resold through various wholesalers and there was quite a bit of confusion as to who was regulating this. A lot of people thought it was up to the states to regulate, but no state was coming forward, so there was a lot of confusion in the industry about what was the right thing to do. Then Florida decided to take a step forward and lead the drive to regulate at a state level. One of the actions the state government took was to enact this bill that required pedigrees that would provide a list of all of the wholesalers that have been part of the distribution chain for drugs. So when an end user like a hospital receives the drug, they can see all the companies that have handled it. Then they can do some due diligence and verification to make sure that all of the wholesalers in that chain are licensed and so on.
So in 2003 Florida mandated electronic pedigrees with an effective date of July 2006, and Novis began looking for a technology partner that could help us get ready for this law and for similar actions being undertaken by other states. In addition, protecting product integrity is a key priority at Novis and we wanted a company that had experience in the industry and that was respected in the industry. SupplyScape met those criteria. Also, at that time SupplyScape had the only electronic pedigree solution with a certificate of authority from the state of Florida. And since Florida has the strictest regulations, we wanted to design our regulatory policies around Florida's standards. So the fact that Florida recognized SupplyScape in that fashion definitely was helpful in our selection process.
Q: What are some of the key challenges to complying with the e-pedigree requirement?
Rodriguez: Well, not all states have mandated electronic pedigrees, so a lot of the vendors in the distribution chain still provide hard-copy documents as a pedigree rather than providing the information electronically. Depending on the type of vendor and the type of pedigree they supply, this either makes the process very smooth or not so smooth. If a vendor supplies a hard-copy document, we receive that physically and then transpose it into an electronic document via data entry. They we attach that document to the customer's file. SupplyScape provides us the technology to do that and, most importantly, to be able to provide all this information downstream to customers via a Web portal that SupplyScape creates for them.
Another challenge is that different states have different requirements as to the exact information that needs to be encoded on a pedigree. At the highest level, the pedigree tracks two types of information - product information and transaction information. Product information includes such things as the National Drug Code (NDC) of the product, the lot number, the expiration date and the dosage form. This information, along with the name of the manufacturer, is captured and then the pedigree tracks the chain of custody for each transaction that the product undergoes.
At this point none of the state or federal regulations requires the use of unique item or even case level serial numbers inside of the pedigree, but that is something that Novis is doing on a proactive basis to provide more granular product identity in tracking. SupplyScape worked with us to develop and support this product serialization tracking program, which we call RxID.
Q: Can you tell us more about that?
Rodriguez: Novis RxID is a software tool that incorporates SupplyScape's E-Pedigree solution along with SAP's ability to create and manage serial numbers and some barcoding technology. It joins these three elements together to enable us to track a product form the time that it is shipped from our facility all the way through the healthcare facility's logistics and potentially all the way to the end consumer. I note that this tracking begins from our facility because as of now manufacturers do not create serial numbers at the unit level - this is something that Novis has to do at the time that we receive the product.
Under this program, we take products that come from the manufacturer in case quantities -- but that are administered and sold at the vial level -- through a very simple re-packaging process. We wrap each vial in a bag to which we attach a barcode label that contains a unit serial number and we use that to track each vial through the supply chain.
Q: I know there has been a lot of talk about using RFID for e-pedigree tracking. Why did you decide on barcodes?
Rodriguez: For a couple of reasons. One, it was something that could be implemented much quicker than RFID. Second, there has been some conversation or some speculation out there that RFID might have some effect on the proteins of certain pharmaceutical drugs. Until that is resolved, we would rather stay with a simpler technology. Again, our goal here is to be able to track a product from end to end. As the program develops and as RFID develops, we definitely have the option to move in that direction.
Q: Are your customers taking advantage of this?
Rodriguez: Yes, our customers have barcoding technology and have access to our software through a Web portal. They can log in and view a product as it moves through various scans in their supply chain from the receiving door all the way to the end user. This is not integrated with any of their business systems - it is a separate stand-alone system. As an additional value, we can customize a set of business rules that help each customer manage this product. So, for example, if a customer has issues with expiring product, we can set up some business rules that can alert the customer when a product is nearing its expiration date. Another example would be customers who want to make sure that product gets refrigerated in a timely manner. We might set up a business rule that says once this product has been received, if it hasn't been scanned into refrigerated storage within a certain period of time, send an alert. This creates actionable intelligence that our customers can use to help manage the medications in their system.
Q: So this tracking goes all the way to administration of the medicine to the patient?
Rodriguez: In some cases. How it is used differs with each customer. It depends on what their needs are, but potentially each item could be scanned all the way through to the patient. Part of the value of what we bring to our customers is to reduce the number of adverse events at their facilities; so many facilities may want to tie the product to the patient information to make sure the patient is getting the right product in the right doses.
Q: I would guess that this level of tracking also would be useful should there be a recall?
Rodriguez: Yes, of course, though it is unlikely that a recall would occur below a lot level. However, the reality today is that some manufacturers don't even have lot level information, so when there is a recall of product they have to send out massive mailings to every customer who ever received that particular product. It becomes very overwhelming. And if there were any issues with any product at the unit level, we would have that information.
Q: Can you summarize the benefits Novis has realized with this solution?
Rodriguez: First, it provides a secure chain to our customers. Our customers have full visibility of the product using the SupplyScape integration and down to the unit level using RxID. It also helps our customers manage their inventories and make sure they have the medications needed to service patients, as well as reducing adverse events through the identification of product and linking that product to a specific patient. The most important thing is that it creates a partnership between Novis Pharmaceuticals and the healthcare facility based on our common goal of achieving patient safety.
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