One could say that supply chain security is the most pressing problem facing the drug industry and perhaps facing our health care system as well. Supply chain is at the heart of health care’s greatest problems: drug counterfeiting, shortages of key medicines, and of course, escalating medical costs. To solve these problems and ensure a truly secure supply chain, a holistic approach is necessary.
How to achieve such an approach was the subject of a recent PharmaManufacturing.com webcast—“Supply Chain Security: Threats, Strategies and Successes”—featuring Brian Johnson, Pfizer’s Senior Director of Supply Chain Security, as well as industry consultant Russ Somma. (Please visit the Webcast library on PharmaManufacturing.com to view.)
Johnson began his talk by reminding the audience that there is no one-size-fits-all or optimal approach to securing drug supply chains. “This is one company’s view,” he said. “It’s not necessarily the best view. It’s our approach.”
“We believe that supply chain security is something that we’re all in together,” he continued. “And by sharing our approach, our thinking, we’re really hoping that it’s going to promote collaboration and partnership in our united effort to fight criminals, quite frankly, in the supply chain security threats that we face.”
Indeed, Pfizer must be credited with being proactive in sharing its lessons learned from various supply chain pilots—Viagra and other Pfizer medications have been favorite targets of counterfeiters, and the company was, for example, a pioneer in testing item-level RFID tagging of products. Pfizer has willingly shared a good deal of its findings with industry, while also being wary of the fact that information shared publicly is used by criminals themselves to their advantage.
Pfizer’s approach to its supply chain has greatly evolved over the years, Johnson said. “When we started talking about the threats that we were faced with, we really talked about these three buckets of threats: cargo theft and diversion, counterfeiting, and economically motivated adulteration,” he said. “These are all crimes against our industry, and they all represent significant risk to patient safety.”
Yet it quickly realized that supply chain security is bigger and more complex than that. The context has changed in particular. “A lot of companies are dealing with significant patent expirations,” he noted. “A lot of companies are dealing with lack of R&D productivity. A lot of companies are starting to work in parts of the world where they have not historically worked . . . And there’s increasing pressure to control health care spending, and at the end of the day, provide affordable medicines to those who need it.”
These drivers are changing the pharma business model, he stated. “I’ve been in the industry for 28 years,” he said, “and ten years ago, we were not looking at a global, complex situation like we are today, where raw materials will come from one part of the world, maybe processed in another part of the world, the finished product is moved into another part of the world, where it’s repackaged, and now we’re selling our products in markets where it’s quite complex.”
“Given the increasing threats and these changes, we as a company said it’s time to step back and really make sure that we have a good, consolidated, ‘One Pfizer’ strategy around supply chain security.
Said Johnson: “That process drove our strategy in terms of what does our end state look like, what opportunities we have to improve, and what processes really need to change to address the increasing threats that we are faced with.”
From raw materials to finished products received by consumers, Pfizer identified more than 100 business processes in 15 organizations that were critical to its supply chain security program. Some of these processes are familiar, such as GMP processes, Johnson said, but some are more obscure business, logistic, and security processes. Together these hundred-plus processes create a picture of supply chain security.
The picture is one that acknowledges that Pfizer’s responsibility does not end when it sells products to wholesalers and distributors. Just the opposite, in fact: Selling the product marks the beginning of successive steps to engage and support trading partners, monitor and measure what’s happening in the market, and even working directly with consumers on their experiences.
It’s a holistic approach, noted Johnson, that is managed via a sophisticated matrix—comprised of disciplines as diverse as procurement, quality, security, communications and media, external supply, and commercial teams. “The matrix approach was really the only viable way to handle this,” Johnson stated. “We did not feel it was appropriate or viable to try to create a big centralized organization around this.”
On the whole, Pfizer’s supply chain security program is “a combination of preventative processes, processes to detect issues, and processes to respond to issues out in the marketplace.”
Among the key learnings Pfizer has realized in the past few years: “Number one, we think it's very, very important to look at the issue of supply chain security holistically, combining adulteration theft diversion and counterfeiting,” Johnson said. “There are great synergies and great value by working together on these issues instead of dividing them organizationally in your company.”
Secondly, “Define the supply chain broadly, materials to patients. Threats exist all the way throughout the supply chain. And if you focus on one piece of it and not holistically, you're really not going to be very effective with the supply chain security program.”
Finally, Johnson returned to the point about the need for collaboration among supply chain partners: “We want to share,” he said. “We want to collaborate. We want to be transparent. We believe that as an industry, that's the way that we're going to be successful.”
“And nothing that we have or that we're doing provides us a competitive advantage,” he added. “We're happy to talk and share and work with many supply chain partners . . . We need to collaborate with PhRMA, Rx-360 and other organizations that are doing really good work in the supply chain security space. And more importantly, we need to work with all of our supply chain partners and share best practices and things that we've learned to effectively secure our supply chains.”