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Ensuring Supply Chain Security

From Eli Lilly’s “Mission Impossible”-style high profile warehouse theft in March 2010 to contamination in heparin in 2008, supply chain issues continue to make headlines. As pharmaceutical supply chains become increasingly global and more complex, the potential risks to maintaining secure, safe, and compliant supply chains have increased causing both US and European regulatory agencies to introduce several initiatives.

One such initiative is the FDA PREDICT (Predictive Risk-Based Evaluation for Dynamic Import Compliance Targeting) initiative to develop more reliable product monitoring at ports of entry and target those shipments that pose the greatest risk for inspection. The initiative automatically flags potentially risky shipments and gives lower risk scores to more innocuous materials, such as specifically identified products with good import histories, allowing them to be cleared more rapidly. To help standardize this product identification, FDA recently issued Standards for Securing the Drug Supply Chain – Standardized Numerical Identification for Prescription Drug Packages establishing a standardized numerical identifier for prescription drug packages that uses a serialized national drug code combined with a unique serial number to identify individual drug packages. European efforts to strengthen supply chain security are similarly placing greater emphasis on preventing counterfeit medicines and substandard ingredients from entering supply chains.

Collectively, these initiatives have shifted the existing regulatory approach to global supply chain safety from reaction to prevention. This paradigm shift was evident at both the April 2010 PDA-FDA Supply Chain Workshop and the June 2010 FDA-Xavier Global Outsourcing Conference. During the two and half day PDA-FDA workshop, attendees proposed several plans for improving supply chain security beginning with supplier selection and qualification, stressing the importance of sharing supplier intelligence and developing supplier score cards. This theme of improving supply chain security through improved outsourcing and supplier management was continued at the FDA-Xavier Global Outsourcing Conference where Brian Hasselbalch, from FDA’s Division of Manufacturing and Product Quality Office of Compliance, explained that FDA will work with industry to set standards and address supply chain risks more effectively. Mr. Hasselbalch also mentinoed that FDA is working on and considering several guidances and regulations to improve supply chain security, develop better component control, and enhance supplier auditing and self-inspection practices.

In our opinion, the new US and European initiatives are to be applauded as properly balancing the need for appropriate systems and controls without introducing onerous regulatory requirements. In fact, we believe that most successful, well managed companies have already implemented these processes, to some degree, as part of their “Good Supply Chain Practices.” Will these initiatives be enough to ensure long term safety and security to the pharmaceutical supply chain? Time will tell.