Achieving Long-Term Success in Supply-Chain Security

It’s fairly remarkable to think that fraud is a major issue for healthcare supply chains, given that selling counterfeit or falsified products in this market isn’t just damaging to business but also potentially lethal for the recipient. Yet it is a lucrative business for criminal gangs, and an area of specific focus for criminal activity is around the supply of medicines.

The figures are staggering. European Union (EU) data revealed that 24% of all healthcare items seized at borders in 2011 were falsified medicines, and the World Health Organisation estimates that approximately 50% of all drugs bought online are fraudulent (1, 2). However, the fight back against this criminal activity is underway. The Falsified Medicines Directive (FMD) introduced the need for a European-wide verification system and measures such as unique serial numbers to prevent the entry of falsified medicines into the legal supply chain. But this legislation can only achieve long-term success if underpinned by the appropriate technology-a global framework of standards enabling collaboration among industry stakeholders.

Successful enterprises

These criminal gangs could never have been so successful in their endeavours if it wasn’t for the attention to detail applied to the marketing of the fraudulent products and the fragmented nature of the supply chain. User testing revealed that the packaging is often done so expertly that people find them more convincing than the genuine products. However, the care taken over the quality of the design is of course not extended to the quality of the actual products themselves, which often pose health risks to patients from use of expired or useless active ingredients and harmful substances. Being able to clearly distinguish legitimate products from illegitimate ones represents a significant challenge for healthcare businesses, hospitals and end patients alike.

Identification becoming the norm

A big step toward overcoming this issue is through providing globally unique identification for items in the supply chain. Once something has been identified, it becomes possible to both track that item’s current position and trace the points through which it has passed. The business imperative now exists to enable track and trace. Earlier this year, the Department of Health published theeProcurement Strategy that mandated the use of GS1 standards throughout the National Health System (NHS). This mandate requires that every item entering a hospital has to be identified with a GS1 code, creating a shared language for the exchange of information between trading partners. Furthermore, suppliers will be required to enter all their product data into a GS1-certified datapool and the NHS will receive all product data via the Global Data Synchronisation (GDS) network.

Identification, however, doesn’t stop at the hospital warehouse. Each item that enters can be verified at every step of its hospital lifecycle through barcode scans, right up to the patient, who also carries a GS1 code on their wristband. As all surgical instruments, drugs and food can be scanned at the point of being administered to a patient, it can all be married up to an electronic health record to enable verification and ensure that the right patient receives the right treatment at the right time. The tracking capability also makes effective product recalls possible in instances where defective implants are found. As identification throughout all hospital processes is becoming the norm, the mandate works in support of FMD and its requirement for all drugs to carry unique serialised numbers.

The need for industry-wide traceability

Restricting the ability for criminal groups to flood markets with counterfeit products can be started through verification, but it is only sustainable if the standards and serialisation implementations are combined with effective, industry-wide track-and-trace systems as well as other counter measures.

These systems entail the creation of a series of “events” to know where something has been (the “track”) and where it is (the “trace”) in the supply chain. This enables both the current location of an item to be determined and the history of its movement through the supply chain from manufacturer through wholesaler, distributor, logistics operator, hospital and finally to the end patient.

This information allows for tighter management and control, supporting enforcement authorities in identifying who has handled suspicious products and where they did so, as well as preventing them from entering the legitimate supply chain in the first place. It also enables identification in where products have gone, so that effective recalls of faulty products can be enacted.

Track-and-trace approaches are not unique to the pharmaceutical sector. It was originally evolved in the postal and logistics sector and is employed to some extent in other industries for purposes such as combating counterfeiting and quality control. Experience from these other industries suggests that systems should promote:

•       Open standards-to drive down cost and increase adoption rates;

•       Use of existing business processes-as basing systems on these processes is likely to promote more rapid and reliable implementations;

•       Open market competitionamongst track and trace providers-to encourage innovation;

•       Cooperation-at least at the EU level but ideally at the global level;

•       Collaboration-between industry and regulators alike to ensure effectiveness; and

•       A dedicated forum-to help track and trace guidelines to evolve.

Tracking and tracing can only go so far by itself. A truly effective solution should be supported by a wider programme of anti-illicit trade measures, including enforcement, data exchange and international coordination.

A joint effort

Fraudulent activity in healthcare supply chains affects every trading partner, from manufacturer through to hospital trust and right up to the patients themselves. It is not an issue specific to healthcare; every sector is hit by criminal activity in some way. Yet in healthcare, the potential implications are as serious as can be imagined.

There is no single solution to successfully overcoming supply-chain fraud. It requires legislation to set the direction, technology to enable it and a framework of standards to hold it all together. GS1 global standards are the bedrock upon which any anti-counterfeit system is built and we are working closely with all elements of the healthcare supply chain to adopt the relevant standards. Only through collaboration between all stakeholders can supply chain security be enhanced and sustained in the long term.

References

1. European Commission, “Facts and figures,” ec.europa.eu/taxation_customs/customs/customs_controls/counterfeit_piracy/statistics/, accessed 18 Dec. 2014.

2. WHO, “Growing threat from counterfeit medicines,” www.who.int/bulletin/volumes/88/4/10-020410/en/, accessed 18 Dec. 2014. 

Alaster Purchase is chief operating officer, GS1 UK.