Industry Overview

Companies across the pharmaceutical value chain are seeking effective approaches to maximize revenue and achieve sustainable business value. To respond efficiently to the increasingly varied internal and external mandates for security and visibility, companies require strategic approaches that rationalize the priorities into an executable roadmap with demonstrable return on investment.

Business Challenges

Pharmaceutical companies are seeking models to maximize revenue as branded products face increasing competition and generics become more prevalent. Wholesalers face regulatory requirements, margin pressures, and trading partner demands to deliver an ever-increasing variety of products and additional customer services at lower cost. Retail pharmacies are seeking approaches to improve inventory availability at the point of dispensing while reducing carrying costs. Companies that expanded via acquisition are faced with increasing complexity due to disparate enterprise systems and diverse operations. Governments are scrutinizing reimbursements more closely.

Ecosystem Complexities

"The more hands that touch a commodity, the greater the opportunity for fraud -- including the area of prescription medication."Charlie Crist, Governor of Florida (former Florida Attorney General)

Companies in the pharmaceutical industry not only face numerous internal business challenges, these companies also face the inherent complexities of the pharmaceutical ecosystem itself. Billion-dollar blockbuster branded drugs share distribution and provider networks with lower dollar but higher volume generic alternatives. High value biotech products and targeted vaccines with unique handling characteristics leverage specialty distribution channels. When drugs finally get to their ultimate dispensation point, they may be handled by retail or closed-door pharmacies, hospitals or doctor's offices.

Each of these diverse value chain participants have their own business goals and seek solutions that address their unique requirements and mesh smoothly with their operational preferences. The hundreds of manufacturers, thousands of pharmaceutical and medical devices distributors, and tens of thousands of dispensing end points layer their operations on top of a diverse set of technology platforms. From extensive SAP and Oracle enterprise systems to home-grown inventory and financial applications, pharmaceutical executives utilize a wide range of technologies to manage their product and financial flows.

This sheer diversity of business drivers, operational preferences, and technical infrastructure is one of the reasons why SupplyScape has brought together a management team with diverse experience in the industry. This leadership includes staff with the world-class software expertise, deep operations experience, and extensive pharmaceutical perspective required to craft solutions that not only deliver demonstrable value within your company but also enhance the value of your disparate trading partner networks.

"Nearly 4 billion prescriptions were filled last year. That means a very large volume of drugs is moving through the supply chain. The sophistication and precision of some counterfeit copies of legitimate drugs make a reliable estimate of the number of counterfeits impossible."Randall Lutter, associate commissioner for Policy and Planning, FDA

Patient Safety Threats

The American pharmaceutical market is the largest in the world, doubling in the last five years to $200 billion. New drugs and an aging population resulted in over 4 billion prescriptions filled last year alone. In this lucrative market, it's becoming harder to distinguish between legitimate and fraudulent drug suppliers.

One counterfeiting organization gained $1 million in just a week, according to testimony to a 2004 Health and Human Services task force.

"More than a year after the notorious counterfeiting attacks on Lipitor (atorvastatin) and Procrit (epoetin alpha), and the establishment of an FDA task force to fight counterfeiting, a prescription drug supply system that was already on the alert had again been penetrated."Lew Kontnik, Source: Pharmaceutical Executive

More than 600,000 Americans may have received a 30-day supply of counterfeit Lipitor® in 2003 before the $55 million recall occurred. The product helps reduce cholesterol.

Criminals pocketed $28 million in a single transaction for diluted Epogen® which is used by kidney dialysis patients for anemia.

As many as 25,000 cancer patients may have received sub-potent medicine that was one-twentieth the strength prescribed by their physicians when Procrit® was relabeled by US counterfeiters. Only 8,000 of 110,000 vials were recovered; the counterfeiters gained approximately $46 million.

Counterfeiters also targeted Zyprexa® prescribed for schizophrenia and bipolar disorder, and HIV/AIDS drugs Combivir® and Serostim®, as well as Neupogen® used by HIV and cancer patients.

"Some of the experts are telling us it's more lucrative to sell a counterfeit drug than it is a narcotic such as heroin."William Hubbard, FDA associate commissioner for policy and planning
Source: WebMD

These drugs and others were formerly listed on the National Specified List of Susceptible Products identified by the National Association of Boards of Pharmacy. Counterfeiters haven't stopped; they're just moving on to other products.

In response federal and state regulators have selected the pedigree as a means of securing this essential yet vulnerable supply chain. Working with industry, SupplyScape has defined and developed electronic pedigree (ePedigree) capabilities that streamline security and delivers demonstrable business value.

ePedigrees in conjunction with our network-based product authentication, make up the core track and trace foundation that leverage the shared services and data collaboration provided by Nexus.