When there's a major scientific or medical breakthrough, there is pressure on the business community to deliver it to the masses as quickly as possible. From the combustion engine to penicillin, the pressing need for widespread distribution of new solutions tends to burden one behind-the-scenes area of business in particular: the supply chain.
One of the latest innovations poised to disrupt the supply chain is again coming from the pharmaceutical industry. Through the study of genomics and the use of big data, it's now possible to create personalized medication to provide better care for patients based on their unique biochemistry. Certain medications—for treating diseases like breast cancer, for example—can now be modified to eliminate detrimental side effects that a small percentage of people suffer when using the standard version of those drugs. This can be done by identifying the gene that contributes to that rare response and tweaking the drug to treat only that tiny population. This is a major step away from the established methods of treatment through mass-produced drugs.
Just as this signals a shift in the way the medical industry thinks about treatment, it also ushers in a new era for the supply chain. It's not clear, though, that pharmaceutical companies and their suppliers are prepared for the changes to come. According to health-care journalist Martin Barrow, "While attention has focused on the potential of personalized medicine to improve outcomes, the impact on manufacturing and the downstream supply chain may have been underestimated."
Individualized drugs and related services will present the pharmaceutical industry with significant new challenges that run contrary to traditional strategies of drug production, storage, and distribution en masse. For example, even before the execution of delivery begins, pharmaceutical companies will likely be tasked with identifying new suppliers that can achieve the required level of mass—yet patient-specific—customization, on demand.
In this new scenario, manufacturers will need to implement a new set of tools, techniques, and supplies to source and implement the testing and validation of each unique batch of drugs. Intellectual property may also be perilously exposed, as new players are brought into the sourcing process. The pharmaceutical industry will need solutions that help thoroughly vet this process to be sure that suppliers at every stage are not only compliant with regulations, but also are top performers that can meet the on-demand requirement of personalized treatment. "Batch sizes will shrink, requiring the development of more nimble systems perhaps capable of making several different products that same day while maintaining control and integrity of each product," said Barrow.
In addition to the speed required under this new model, the pharmaceutical supply chain will become more complex than ever. The shift away from mass delivery will create exponentially more touch points throughout the process that starts with drug manufacturing and ends with a patient filling a personalized prescription. Even without these additional layers in the supply chain, most companies struggle to achieve a depth of visibility beyond their tier-one suppliers. This is already one of the most difficult challenges for procurement professionals today, and this issue will be exacerbated in pharma with the adoption of personalized medicine.
Frighteningly, further down in the supply chain, among the multiple levels of sub-suppliers, is where the most difficult-to-detect risks often lie. Keeping track of what tier-one suppliers are doing isn't a challenge for most companies, but it becomes increasingly difficult to monitor the next tier—your suppliers' suppliers—and the next tier, and so on. Some suppliers might be reluctant to put a large multinational corporation into direct contact with their own suppliers out of fear of being bypassed, or worse, in an effort to conceal misconduct. Without a solution to connect the dots, the opacity created by a complex network of suppliers increases risk as information gets inadvertently lost or even deliberately buried by bad actors deep in the supply chain. This giant, high-stakes game of "telephone" only gets trickier with more players involved, as is necessary to deliver personalized medicine.
Not understanding the intricate details of the supply chain can expose pharma companies to major threats. As pharmaceutical organizations react to the shift toward personalized medicine, they must consider the logistics capabilities that will be necessary to keep their supply chains up to speed. These are unlikely to be minor changes. For example, wholly new partnerships may have to be negotiated, especially in the "last mile" of the supply chain, where delivery and storage of customized drugs will look vastly different from the legacy processes that delivered and stored mass treatments. Moreover, the ethics, responsibility, and sustainability of suppliers are critically important to the broader organization in any industry, but especially when pharmaceuticals and potentially life-altering medication is involved. Increased transparency could be the factor that makes or breaks successful efforts; knowing exactly where, when, and how materials are sourced, manufactured, and distributed provides the opportunity to mitigate risk and prevent potential health, safety, and public relations blunders in the future.
"Future supply chains must adjust much more quickly with the right set of traceability capabilities to report on where the drugs went, who bought them, and how they were purchased, if not on the individual level, then at least at the wholesale and pharmacy level," according to Barrow. Pharmaceutical organizations need to not only put in place a new process to centralize supplier assessments and help eliminate silos that contribute to opacity but also get buy in from the decision makers in each team or function. Before the benefits of personalized medicine can reach the millions of people who need potentially life-saving treatment, it's the supply chain that will need to make life-or-death decisions in order to bring this latest breakthrough to fruition.
Pierre-Francois Thaler is co-CEO and co-founder of EcoVadis (ecovadis.com), a provider of a collaborative platform for measuring and rating corporate social responsibility in global supply chains.
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