Nicholas Basta, Editor Emeritus

Like many other aspects of healthcare, pharmaceutical sales and marketing practices have been changed by the COVID-19 pandemic. The most noticeable initial effect, of course, was the rapid diminishment of face-to-face sales encounters. Pharma sales positions were cut back (ZS Associates notes that they have now rebounded to around 81,000 positions in the US), while video calling went up, but overall healthcare utilization plummeted as fewer patient visits with doctors’ offices occurred and fewer elective procedures were performed. According to IQVIA’s “The Use of Medicines in the US 2023,” prescribing levels (excluding COVID vaccinations) only recovered in Q4 2022 to the level they had in the first few months of 2020.

Overall, the pandemic accelerated many changes that were already occurring prior to 2020. The pharma industry had been adjusting to a rising number of “no-see” physicians (who were also increasingly becoming health system employees rather than independent practitioners). Health system consolidation was centralizing prescribing and formulary decision-making. And the industry itself has moved more deeply into specialty pharmaceuticals, which have a more complex prescribing profile and need a wide range of diagnostic or ancillary services to complete a therapy decision.

Meanwhile, the service providers to the pharma industry for sales and marketing support have continued to evolve. Video conferencing services have become routine. IT developers of sales force automation tools are expanding their range of capabilities. The latest hot trend—the emergence of “generative AI” as best exemplified by a system called ChatGPT—is attracting attention and investment from a range of technology organizations. (ChatGPT, whose current platform version is GPT-4, is owned by a nonprofit company called OpenAI Inc., which has a commercial arm that has attracted over $10 billion from Microsoft.)

Numerof & Associates, a St. Louis healthcare consulting firm, finds that 85% of survey respondents agree that “digital content and virtual meetings will remain significant components of the customer engagement model, even if access restrictions [some of which were imposed during the pandemic] are relaxed.” The survey, “The Future of the Commercial Model: Post-Pandemic Insights,” was performed in late 2022 and follows on a similar survey in 2020. In that year, many respondents expected the industry—and its commercial models—to revert back to pre-pandemic forms, but now, there is a consensus that traditional ways of doing business are history.

Another market-research firm, Gartner, issued a report on life sciences customer relationship management (CRM) in late 2022, noting that the drive toward more digital capability, and the changing role of sales reps, has been gestating for a long time, but is now a more urgent need. "Gartner introduced the idea of a 'concierge' sales representative, which is a digitally enabled sales representative, a decade ago. However, it never reached mainstream adoption, as many life science brands preferred not to change their business models for fear of revenue disruption," the report said. "The pandemic has changed that calculus. Digital 'concierge representatives' won’t be asked to drop off samples or engage in two-minute elevator speeches, but rather, will invest significant time nurturing long-term relationships with their customers. Face-to-face engagement will change from the inside-out, ‘I have a presentation for you,’ to the outside-in, ‘What do you need from my organization, and how can I facilitate that?’”

Five recurring themes emerge from market studies like these and industry commentary:

The need for managing both face-to-face and digital interactions, preferably with a unified system that can accommodate call reports or feedback from any channel. The older concept of “multichannel” marketing has given way to today’s “omnichannel” approach.

The emergence of so-called hybrid reps (adept at multiple channels) and/or the development of inside-sales or call centers that complement field sales. This trend also takes advantage of the employee trend toward work-from-home arrangements.

The availability of more, and more in-depth, data on both patients and prescribers, the former to analyze market potential and performance, and the latter to recognize key influencers among healthcare professionals (HCPs) and to feed that into the reps’ sales plans.

The steady growth of artificial intelligence/machine learning (AI/ML) capabilities, starting with an earlier era of CRM-generated “recommendations” for sale reps’ actions, to the current “next best action” for reps or for marketing managers, to the future potential of generative AI like ChatGPT and similar IT tools.

The growing importance of consolidated health systems and pharmacy benefit managers, whose decisions on physician access, therapy choices and drug formularies dictate market access for manufacturers. This business condition, in turn, drives the need for key-account management teams in sales forces.

“Back in the day, ‘multichannel’ simply meant putting out your content in whatever channel you could—via print, on a website, in an e-mail, and so forth,” says Parker Richardson, VP, omnichannel strategy and operations, Astellas Pharma. “The shift to omnichannel is twofold: understanding, via deep analytics, the journey that a prescriber is on and helping to orchestrate that journey; and then recognizing the content that would benefit the prescriber and delivering it.” Rather than tailoring content to multiple channels, he says, the process should begin with understanding what the prescriber needs to know, and then delivering it via the channel that prescriber prefers.

The generally acknowledged market leader in life sciences CRM is Veeva, which states that it reaches 80% of the global market for life sciences sales reps (and even more in the US). Veeva pioneered cloud-based CRM in the mid-2000s, and has also grown a substantial business in managing IT needs for clinical research. Late last year—and in more detail at its recent Commercial Summit in Boston—it announced that it was leaving the platform it was built on, Salesforce.com, and building its own, called Vault CRM.

Salesforce.com happens to be broadly used in CRM in many industries and types of business, and competitors to Veeva, including IQVIA (and Salesforce itself, in certain applications), use that platform. Veeva says that this will be a seamless transition for users, but as Paul Shawah, EVP, commercial strategy, puts it, “Customers can choose a ‘lift and shift’ approach to transition from the old platform to the new one, or a ‘refresh’ approach to revamp their sales structure while transitioning.” The transition will begin in early 2024, and continue until 2030, when Veeva’s partnership with Salesforce.com will expire. At the same time, Veeva is moving closer to Microsoft, by enabling Microsoft’s Outlook (for email) and Microsoft 365 (the former Microsoft Office) to be seamlessly integrated with Veeva CRM.

Veeva announced some significant new offerings at that Boston meeting. One is a service center extension, tailored to supporting inside sales teams while linking seamlessly to Veeva CRM. Another is an expansion of its Compass data service, with anonymized patient data available now, and predictive prescriber and national-markets data available next year. (This product competes directly with a variety of services offered by IQVIA, which are currently available to pharma clients using Veeva CRM via third-party agreements; the new service is supposed to eliminate these agreements. On the other hand, Veeva and IQVIA have been engaged in legal actions against each other since 2017.) A third offering, CRM Bot, will be described later.

Over at IQVIA, the focus in recent years has been its Orchestrated Customer Experience (OCE), which enables the company’s rich data prescribers and markets to be integrated with the Salesforce platform. OCE has been upgraded recently to “OCE+”, the difference being the incorporation of a product from the company called the “Next Best recommendation engine.” “Next Best” refers to the process of identifying a preferable action to take (send a doctor an e-mail, engage with the medical science liaison, etc.) for reps or marketers to take, based on the data on hand and a set of business rules or algorithms (see chart above).

“IQVIA is uniquely positioned to bring together data, analytics, technology, and AI/ML capabilities all under one roof,” says Sanjay Chikarmane, chief product officer, IQVIA. “With OCE+, our customers can make smarter and more informed decisions through embedded intelligence that surfaces the actionable insights they need, when they need them, to better personalize the HCP experience and improve business results.”

The next-best action approach has been kicked around for several years by various IT firms and business consultants. Earlier versions had the problem of recommending self-evident actions or simply ineffective ones. But as AI tools have improved, acceptance is growing. Saby Mitra, principal, digital customer experience, at ZS Associates, has followed the evolution of the next-best concept for nearly a decade.

“Back in 2015, industry was not warming up to the idea of winning with better analytics [like next-best action]," he says. "In the 2015-2018 period, we saw basic business rules being implemented, i.e., ‘if you’re falling behind plan, do this.’ Now, these recommendations are becoming more predictive: ‘this doctor will have x patients for a therapy, and there is a high likelihood that the HCP will appreciate this relevant content on your next call.’”

Like IQVIA, ZS has a stable of data services, now combined with AI/ML tools, under the brandname Zaidyn. The company is also a high-level partner with Veeva, providing implementation services and consulting for life sciences sales and marketing teams. Mitra says that the earlier (2015-2018) instances of next-best actions generated sales bumps of 4-5%; now, with the latest range of AI/ML tools, that has nearly doubled.

One of these ZS data services, Affinity Monitor, has records on 800,000 HCPs. Within Zaidyn, use of Affinity Monitor enables marketers to analyze HCPs’ preferred channels; follow-up actions can range from looking for clinical trial candidates to assembling reimbursement information for patients. Mitra says that an evolving area of interest is accounting for the social determinants of health, itself a growing area of interest for deeper insight into patient behavior. Most recently, ZS announced a partnership with Informatica, a developer of master data-management tools, to combine Zaidyn with Informatica’s Intelligent Data Management Cloud (IDMC), creating (in the industry lingo) a “data fabric” across a range of data sources.

Veeva plans to jump more deeply into the AI game with a product called CRM Bot, which, when introduced in an expected 2025 timeframe, will employ ChatGTP resources to provide to reps not just next best actions for reps on prior call reports or channel preferences, but even to predict HCP needs by drawing patient data from Veeva Compass (a compilation of healthcare data) and Link (a compilation of HCP activity).

ChatGTP is a type of “generative AI” that, in this case, builds content or analysis based on “large language model” training. Google, Microsoft, and a host of other IT firms are racing to build comparable systems. Whereas everyday computer users have been experimenting with ChatGTP tools to create documents, songs or graphic images, even writing computer code, its use in pharma will require training on the data stored in pharma’s own repositories. Veeva notes that each pharma customer will be using its own data for training, not industry-wide databases.

The near-term objectives for tools like CRM Bot will be internal documents, such as reps obtaining an AI-generated summary of their customer lists and call plan goals. Marketing managers might use it to speed development of a marketing plan. However, there is a significant obstacle to creating documents or texts that might be sent outside the organization—even something as straightforward as an e-mail response to a physician query. All such communications depend on a prior legal and/or regulatory review. The experience of everyday computer users to date has shown that ChatGPT and related AI systems can make mistakes or create false narratives—and the consequences of that in a healthcare context could be disastrous.

“I think the jury is still out on these AI tools,” says Mitra. “The technology has clearly created excitement, but so far it hasn’t been used in a regulated industry like pharma.” He also sees it as being complementary to, and not a replacement for, AI tools like neural networks or ML. He adds that ZS has a workgroup devoted to developing this technology; eventually it and its pharma clients will find a way forward. Meanwhile, there is an intensifying debate within IT circles over creating guidelines for safe development of AI technology.

Still, there is a sense in industry that exciting new capabilities are just around the corner. “I’d like to see an application that goes beyond next-best action,” says Richardson. “For example, could reps ask for a system to tell them how to run their territory for the next three months?” He sees the value of well-qualified reps as more important than ever; but given the investment that the pharma industry makes in its field teams, there is potentially more value to be obtained.

The traditional lament of commercial operations in pharma has been overcoming the difficulties of siloed functions, both geographically (for global firms) and operationally in the duplicate efforts and lack of collaboration. IT providers have come a long way in weaving the disparate data of commercial operations into a unified “cloud” or “fabric"; the hope is the same can happen in a workforce context.

Articles

The latest IT offerings for sales force automation—including new AI tools—promise a more effective pharma sales process.

New Trends in Sales Force Organization

Since its founding in 2007, when it introduced cloud computing to life sciences sales teams, Veeva has used the Salesforce.com cloud platform upon which it built dedicated applications. Now, at its 2023 Commercial Summit (Boston, May 1-3), the company fleshed out what this previous news will mean for its customers in life sciences, where it is the dominant customer relationship-management (CRM) provider (and, increasingly, its presence in managing R&D activities for that industry).

Heretofore, Veeva customers paid a pass-through subscription to Salesforce.com, according to Paul Shawah, EVP, commercial strategy; the arrangement between Veeva and Salesforce will officially begin expiring in 2025, but Veeva customers staying with the Salesforce platform will be supported through 2030. Pilot customers will begin working with the new platform, Veeva Vault, next year; Veeva also announced a deeper partnership with Accenture for Veeva Vault CRM customers who want to update or revise their software implementation, rather than a straight “life and shift” implementation.

New capabilities will be added to Veeva Vault CRM: a free “service center” feature that can organize such functions as internal sales teams or inbound call response, and the CRM Bot, which employs artificial intelligence (AI) tools to enable sales reps to generate texts or documents (taking advantage of the so-called “generative AI” tools now becoming popular).

At the meeting, the company also announced new capabilities in its Link product (for identifying key accounts and their relationships) and Compass, which will soon include deep analytics on providers in addition to the current data on patients.

A ‘next generation’ CRM platform will gradually leave the Salesforce.com platform behind.

Veeva Is Building Its Own Cloud Platform, Plus Other New Capabilities for Managing Life Sciences Sales and Marketing 

It is well known that there are thousands of illicit online pharmacies used by Americans to purchase drugs, usually via e-commerce; for years, the National Association of Boards of Pharmacy (NABP) has tracked their online presence and waged a campaign to discourage their use. Now, a study by the IQVIA Institute for Human Data Science, in partnership with Spain’s IE University and that school’s business offshoot, Translucent DataLab, has conducted a more detailed study of what it calls illegal online pharmacies (IOPs) that have been used by US customers.

The study finds 1,501 active IOPs (as of February), and that between 2019 and the end of 2022, annual prescription volumes rose from 64 million to 85 million—a CAGR of 10%. In calendar year 2022, this volume represented $34 billion in “value loss” to industry (it is uncertain how much of these sales represent legitimate product).

Some definitions: a legal online pharmacy has a license from a US state, provides an FDA-approved and -authorized drug, and requires a prescription written by a US medical practitioner. IOPs typically operate outside the US, don’t have state licensing, and sell drugs that often don’t have FDA authorization. While it is illegal for a business to import volumes of unauthorized drugs, individual consumers are not penalized for obtaining up to three-month supply of a drug.

To start the process, IQVIA and its partners did some sophisticated web scraping to not only identify the 15,501 IOPs, but also how many of them were linked (the same business entity might sponsor several or many pharmacy websites). Web-sourced data from an analytics company (Semrush) was used to estimate monthly traffic to these sites. Then, a series of regression analyses and comparisons with IQVIA’s rich database of overall prescription patterns led to estimates of the types of drugs being dispensed. (A nifty bit of detective work involved comparing purchase order numbers from orders placed at the beginning and end of a month to get an estimate of prescription volume of some sites.) The analysts were also able to get pricing information directly from sites (interestingly, although many customers expect lower prices for the IOP purchases, that is not universally true).

By some hard-to-follow methodology, the analysts also estimate that purchasing these drugs caused a tenfold increase in adverse events (comparing the adverse events per prescription of legitimately dispensed drugs with the IOP dispensing), which cost the US health system upwards of $64 billion annually for the 2017-2022 period. “This preliminary evidence shows that the public health impact of IOPs is substantial and has exhibited an increasing trend in the last few years” says the study. Whether that’s an accurate figure is debatable, but the clearest trends are a worrisome increase in use of IOPs, and a threat to legitimate drug supply chains.

https://www.iqvia.com/insights/the-iqvia-institute/reports/assessing-the-impact-of-illegal-online-pharmacies-in-the-us

“Deep learning” IT tools were used to calculate sales volumes and drug class.

IQVIA Study: Illegal Online Pharmacies Cost Pharma $34B in Diverted 2022 US Sales

The old truism that the US pharmaceutical supply chain was essentially impervious to counterfeits and illicit diversions has crashed against the realities of the COVID-19 pandemic and its aftermath. No, the US is not awash in counterfeits; but there are “dark corners” of the supply chain, from manufacturers all the way through to the delivery vans bringing drugs to a local clinic or pharmacy, that are not as reliable as they once were. There is also an appetite, brought on by all the controversy over COVID vaccines and therapies, for individual consumers to go their own way in choosing medications—buying from unreliable online pharmacies, or accepting treatments outside FDA’s purview.

“With the disruptions brought on by the pandemic, the urgent needs for COVID-19 therapies and other medications around the world, the readiness of counterfeiters to step in, and now the Russia-Ukraine war, the pharma supply chain has become a Wild West,” says Greg Cathcart, CEO of Excellis Health Solutions, a Drug Supply Chain Security Act (DSCSA) and supply chain consulting firm (now a part of NNIT, a global information technology company). “These disruptions have given drug diverters plenty of room to operate in.”

All this is happening just as the crowning achievement of pharma supply chain managers and regulators—the 2013 DSCSA—reaches its 10-year culmination.

By Nov. 27 of this year, all participants in the US’ pharmaceutical supply chain—manufacturers, wholesaler/distributors, pharmacies, and even certain logistics providers—are supposed to have a comprehensive, interoperable electronic-data system that enables drug packages to be tracked by individual identities, from maker to dispenser.

Data from multiple sources show the heightened threats the global pharma supply chain is under. The Pharmaceutical Security Institute, in its annual summation, counted 5,987 counterfeit incident reports in 2021 (the latest year studied), up 38% from the year before; over 40% of these were in North America. The BSI Supply Chain Risk Insights Report, published in January, found higher levels of thefts of all types (facility, container, vehicle, etc.) but one, and also reported that pharmaceuticals were the second-highest product type (behind food) subject to vehicle hijackings. In the US, it’s worth noting that FDA’s Office of Criminal Investigations had a very active 2022, with new announcements of thefts, diversions, and financial improprieties occurring almost daily (although it should be recognized that a significant number of these involve controlled substances).

These sorts of worries have elevated supply chain risk management to the highest executive levels in pharma. “The escalation of supply chain and digital supply chain risk up the c-suite agenda means that today there has to be a proactive approach, from the outset to the procurement of supply services,” says Mark Brown, a global managing director at BSI, in its 2023 report. “You can’t just go for the lowest cost—you have to assess the situation and understand that sometimes the lowest cost may increase risk and potentially harm your organization.”

Having “situational awareness” in real time is the essential capability to control risk and manage theft or misdirected shipments, according to Barry Conlon, CEO of Overhaul. The company was an early developer of software systems that could unite, for example, temperature readings of a cold-chain pharma shipment with truck-mounted location devices, and assemble these data to enable a physical intervention to redirect a shipment or recharge refrigerant. The company recently acquired FreightWatch from Sensitech, the Carrier Corp. division that specializes in temperature monitoring hardware. Conlon says that the FreightWatch acquisition broadens Overhaul’s global reach. “In 2022, our interventions resulted in $250 million worth of recovered product, and it should be emphasized that every dollar in saved product represents $9 in avoided cost for product replacement, litigation, and the like,” he notes.

There has been a small explosion in recent years in IT systems that can aggregate supply chain data and present it to logistics managers or shippers—these include ParkourSC, Roambee, Controlant, and others. Conlon says that a distinction can be made between service providers based on software only (like Overhaul), offering to interface with any sensor or tracking device, and those that offer a combination of the two. However, a common problem in the industry is getting cooperation from the hardware vendors (which could in fact include container suppliers that mount their own hardware), freight forwarders, and IT providers.

Manufacturers have already invested billions to imprint 2D barcodes on packaging, meeting an earlier DSCSA mandate; now, many of them are investing in case packing automation to enable them to aggregate case data, and for wholesalers to infer the contents of cases without opening them. (Technically, this is not a DSCSA requirement, but wholesalers have been adamant that their highly automated processes would break down without aggregation/inference, and a couple years ago, FDA essentially blessed this process.)

Upsher-Smith Laboratories, a Morton Grove, Minn. manufacturer, recently opened a new “Plant C” that brings together new serialization capabilities. “We’re still pulling it all together,” says Adam Conlon, associate VP of operations, while noting that Upsher-Smith makes not only its own branded products, but also brings in product manufactured by contract manufacturing organizations (CMOs), and, with the new capacity, is planning to become a CMO for others. “We wouldn’t mind having more time for the DSCSA deadline, but we plan to be compliant by then.”

Tim Donelson, director of serialization and manufacturing IT at the company, notes that Upsher-Smith took a two-phase approach, selecting Optel Systems for barcoding technology earlier, and now has case-packing machinery on order for delivery later this year. Uhlmann bottling equipment is doing both serialization and aggregation on certain lines. Some packaging lines will have a semi-automated aggregation process, including 2D “helper” codes to manage bundles of product, adds Donelson.

Conlon says that the company, besides being able to serialize its own production, that of its CMOs, and eventually for clients for whom it is a CMO, hopes to gain value by better management of quality control, and linking to an IT system for electronic batch records. All these operational and compliance capabilities are grounded in the Advanced Track and Trace for Pharmaceuticals (ATTP) system from SAP.

Harm is certainly on display for Gilead Sciences, which has concluded multiple sets of litigation against multiple pharmacies and so-called “fly by night” distributors who were either involved in selling and reselling diverted or counterfeit HIV medications, as well as fraudulently taking advantage of a free-drug distribution program supported by Gilead. In February, a federal jury convicted the head of Minnesota Independent Cooperative of selling diverted or counterfeit Gilead HIV and hepatitis C medications worth over $150 million; in March, a default judgment was granted by a Florida federal judge against Baikal Marketing Group and others amounting to $175 million for the free-drug program abuse. Last year, another diversion/counterfeiting case, involving dozens of parties in 10 states, led to an injunction under the Lanham Act, which allows brand owners like Gilead to seize counterfeits prior to resolving legal actions.

“Gilead uses various measures to help ensure safe and secure supply of its products, including having authorized pharmaceutical distributors of record, as well as utilizing anti-counterfeiting technologies,” notes a company spokesperson. In some of the investigations, DSCSA-mandated product codes and transaction documentation were key evidence. In fact, the company is critical of the DSCSA rule specifying the “sunsetting” of the Transaction History record, one of three types of tracking reports defined by the law; it would prefer to maintain this record after its November expiration, to help it track its products’ distribution.

Long before DSCSA or any data-driven tracking process, the pharma industry has used a wide variety of anti-counterfeiting measures to protect its brands. Broadly speaking, these techniques—which are widely used in consumer goods and other markets—can be overt (recognizable by the end customer), covert (hidden but identifiable by inspectors), or forensic (verified by laboratory analysis, often with a view toward building a legal case).

Most of these techniques involve the packaging or containers of pharma products (some have been proposed for the products, such as pills, themselves). Thus, security printing or microprinting has been applied; holograms have been embossed onto packages, and taggants incorporated into packaging paper or ink.

One example is Schreiner MediPharm, which provides labeling technology for manufacturers of products in vials or syringes. In the past year, it has introduced Syringe-Closure-Wrap (for prefilled syringes) and a similar tamper-protection label for vials. In both cases, the labels clearly show if the container has been opened (in cases where counterfeiters might reuse the container); other security features can also be incorporated into the label.

A new offering might be in the works for Sicpa, a provider of security inks. Last year, it announced an expanded partnership with UbiQD, a Los Alamos, NM developer of quantum dot (QD) technology. QDs are nanomaterials that exhibit the effects of individual atoms—in this case, photoluminescence that can be “tuned” to various colors. That combination of properties creates possibilities for uniquely identifying commercial products in a near-impossible-to-replicate manner.

Nanomaterials are also the target of TruTag Technologies, which has been offering a microporous silica particle that can be encoded and then authenticated. The particles, qualified by FDA as “generally regarded as safe,” can be combined with excipients into drug formulations. The company has announced a partnership with Gerresheimer, the Dusseldorf manufacturer of glass packaging. In this case, however, Gerresheimer is seeking to incorporate the TruTags onto the glass packaging surface, initially for cosmetics products.

In January, TruTag also announced the formation of a Smart Medicines Advisory Board, to accelerate development in the pharma field.

“Smart” is a recurring theme with pharma labeling and packaging, with various vendors or collaborators seeking to combine product authentication with tracking, medication adherence, clinical-research data gathering, and other applications. The use of radio-frequency identification (RFID) labels is one element of these smart applications. Such efforts are promising but seem to be limited by the significant coordination needed between different internal groups at pharma companies. Moreover, “Going beyond the steady amount of packaging authentication activity in the industry today is limited by the multi-million-dollar contracts for DSCSA readiness,” says Excellis Health’s Cathcart.

Even though compliance with DSCSA is a mere seven months away, critical programs are still being finalized. In late 2022, the GS1 US Healthcare organization published Release 1.3 of 

“Applying GS1 System of Standards for DSCSA and Serialized Interoperable Traceability,” adding to the Release 1.2 document published in 2016. Tracy Nasarenko, director of community engagement at GS1 US Healthcare, explains that the 1.2 document should still be the starting point for new participants in DSCSA compliance; Release 1.3 includes refinements or enhancements on applying GS1 terminologies, and includes how to encode “22 serialized supply chain choreographies” in XML—the latter coming from workgroup discussions on how supply-chain events should be handled.

Looking at the concerns expressed by the 50 or so organizations participating in the GS1 workgroups, Nasarenko comments that learning the nuances of EPCIS standards, including the “common business vocabulary” (CBV) by which information is transmitted, will be an ongoing exercise for the pharma industry. “Communicating the right master data (i.e., the basic descriptions of what a product is and who made it) is causing issues,” she says. Use of the GS1-defined “GCP” (GS1 company prefix) is still a ‘work in progress.’”

Another group active in developing guidance to help the industry is the Partnership for DSCSA Governance (PDG), which brings together representation from manufacturers, wholesalers, dispensers, and solution vendors (FDA also sits in on the deliberations). In February, PDG released four chapters of a “Foundational Blueprint for DSCSA Interoperability,” addressing practical matters of transmitting information among trading partners.

“The expanded Blueprint is a critical milestone and will significantly contribute to the industry’s efforts to achieve DSCSA interoperability by the November deadline,” says Eric Marshall, PDG executive director. “While the Blueprint does not carry the force of law, it does represent the consensus best thinking of more than 60 of the nation’s leading DSCSA stakeholders.”

A third resource arises from the pharmacy community, specifically the National Association of Boards of Pharmacy (NABP). In March, the group announced that it will be launching the Pulse online service this summer to assist pharmacies (especially small ones that lack IT resources) in meeting their DSCSA responsibilities. The service, open to all pharmacies registered to their states’ pharmacy boards, will enable them to connect with their trading partners and to respond to tracing requests that might come in from regulators. Pulse “will provide access to user-friendly tools and a comprehensive network of verified relationships, enabling consistent communication with trusted trading partners of all sizes across the supply chain,” says Al Carter, NABP executive director.

The plight of small pharmacies has been an ongoing concern of DSCSA observers; warning signs have been flashing for years on this part of the pharma supply chain. In December, the American Pharmacists Association wrote to FDA, requesting an official finding from the agency that “enforcement discretion” (i.e., a delay in enforcement) would be allowed for pharmacies, in part because of FDA’s own tardiness in completing assessments and guidances.

However, the pharmacy community has not been standing still. Numerous hospitals and health networks have been installing software and systems for DSCSA compliance within their pharmacies. Most recently, Renown Health Foundation, a 150-site network in northern Nevada, has selected rfxcel’s DSCSA software. “This will enhance Renown’s ability to help protect patients from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful,” says an rfxcel statement.

“Dispensers have entered the DSCSA discussion later in the game, and as a result, some of their unique needs were not well highlighted until recently,” says Herb Wong, rfxcel marketing manager. The company has also been participating in NABP-sponsored workshops for pharmacies this year.

One might have the impression that the private-sector solution providers—of which there are quite a few—is waiting for these consensus documents to be adopted before writing code that carries them out, but the reality is that many solutions are on the market. Vendors such as TraceLink, rfxcel, LSpedia, Systech, Axway, Covectra, and others voluntarily collaborated with the Healthcare Distribution Alliance a couple years ago to ensure that a verification router service (VRS) could be used to verify the authenticity of saleable returns at distributors.

Another industry-sponsored group, the Open Credentialing Initiative, is addressing the ongoing problem of verifying the identities of parties that might show up as authorized trading partners in DSCSA communications networks. Legitimate pharma supply-chain trading partners want to prevent the incursion of unauthorized or illegitimate parties, as well as to ensure that information requests are correctly routed.

One fairly new DSCSA-compliance vendor participating in the Open Credentialing Initiative is Trust.med. The company is developing a new approach to both trading-partner verification and to establishing EPCIS-compliant messaging, according to Dan Kraciun, CMO, VP operations. He explains that several years ago, Trust.med’s parent established ownership of the “.Med” top-level domain (TLD) with ICANN, the international body that standardizes the World Wide Web. When a DSCSA trading partner establishes an account with Trust.med, Trust.med can, in turn, establish webpage addresses (URLs) not just for that trading partner, but for each product it has. In effect, Trust.med uses the machinery of the internet to manage the security and the interoperability of DSCSA compliance.

Creighton says that Trust.med has lined up a handful of clients so far; he also emphasizes that Trust.med needn’t be looked at as an alternative to existing DSCSA software implementations, but as a complement that can extend them more efficiently.

One of the biggest worries currently in the industry is handling exceptions—cases where product identities cannot be read, or incorrect or incomplete information is transmitted during a transaction. The concern is that for minor or innocent reasons, a shipment might be held up or rejected until the data flaw can be corrected.

One solution vendor, LSPedia, is continuously updating a software module specifically for exceptions management, called Investigator. According to Riya Cao, CEO, AmerisourceBergen chose to implement this solution to avoid setting up a call center of nearly 100 personnel to anticipate manually handling exception queries. With Investigator, exceptions are automatically analyzed and predetermined responses, such as sending an email query to the appropriate trading partner, are generated. “These automatic processes can reduce the time to resolve exceptions from days to minutes,” says Cao. The company is currently about halfway through a multi-week pilot to gather more instances of exceptions and to broaden its applicability to more supply-chain participants. On top of that, LSPedia plans to add business-intelligence tools to Investigator so that a user could evaluate the quality of DSCSA data a manufacturer is providing.

“Eventually, higher-quality DSCSA data will become a competitive advantage,” adds Cao.

LSPedia also figures in an intriguing application of DSCSA capability—the so-called “value-beyond-compliance” goal that early promoters of DSCSA technology touted as the eventual payoff for the substantial investments the industry has made. In January, LSPedia announced a partnership with a company called Workd, whose software, MedMover, enables organizations to optimize matching-product sales with complementary products or services—the sort of capability Amazon provides to its users with its “recommendations” for follow-on purchases.

According to Cao, MedMover will analyze DSCSA’s item-specific data and suggest other products a wholesaler, for example, might recommend to its customers.

It’s hard to get too excited about such value-beyond- compliance applications when so much of the industry is struggling to get its basic DSCSA tasks in order. But those applications give a glimpse of a future pharma supply chain that is more secure, more responsive, and more cost-effective.

— Nicholas Basta is Editor Emeritus and Founder of Pharmaceutical Commerce.

As a November deadline looms for industry compliance with an interoperable system for product tracing, there is more urgency in the US pharma supply chain.

Ramping Up DSCSA Readiness Efforts

By Nov. 27, all participants in the US pharmaceutical supply chain—manufacturers, wholesaler/distributors and dispensers, among others—are obliged to comply with the 2013 Drug Supply Chain Security Act (DSCSA). DSCSA, enforced by FDA, creates an interoperable electronic system for tracking pharmaceutical packages at the unit level, from point of manufacture to point of dispensing. Most major pharma companies and distributors have been working steadily toward this goal, but many observers have noted that the ability of small pharmacies, which might lack an internal IT resource, are far behind meeting the looming deadline. In December 2022, for example, the American Pharmacists Assn. wrote FDA requesting “enforcement discretion” (i.e., a delay) in DSCSA compliance for pharmacies with staffs of 25 or less.

Now, the National Assn. of Boards of Pharmacy (NABP) is stepping in with an online resource, branded as 

, to help these pharmacies. Pulse “will provide access to user-friendly tools and a comprehensive network of verified relationships, enabling consistent communication with trusted trading partners of all sizes across the supply chain,” says NABP. It will also include educational programs and tools to help those who utilize the platform prepare for DSCSA compliance, further enabling supply chain success. The project is expected to go live this summer, and NABP has started up a pilot to test its performance.

Al Carter, NABP's executive director, tells 

 that Pulse participation will be free to any state-registered pharmacy (NABP membership is not required). A valuable part of the service is access to a list of authorized trading partners (i.e., distributors)—for which a fee will be required—but verifying product and supporting tracing requests will be cost-free. State regulators will be able to initiate tracing requests, but Carter says that data access will be limited only to those specific requests. (Opening up a significant fraction of pharmaceutical trade to government oversight has been a constant worry of the pharma industry throughout the evolution of DSCSA.)

Although the program will start with a focus on pharmacies only, Carter says that eventually clinics, doctors’ offices, and other points of drug dispensing will eventually be able to participate as well. 

The Pulse online service will provide free resources to enable pharmacy to meet drug traceability rules.

NABP Hopes to Fill a Key Gap in DSCSA Compliance: Local Pharmacies

Like an explosion whose reverberations echo long after the smoke has cleared, the global COVID-19 pandemic continues to affect supply chains across industries and across oceans, including the pharma industry. Unlike other impacted industries, however, the pandemic has spurred significant investment in capacities and services, due to the need to deliver vaccines and treatments expeditiously around the world. These investments will benefit the pharma logistics industry for a while to come, especially in the area of fragile, deep-frozen medicines, and treatments.

One of the biggest reverberations, still playing out, is in basic transportation costs in logistics. While the headline-grabbing backlogs of ocean freighters off US ports have faded (which were then replaced by backlogs of stranded, emptied containers around the world), logistics costs in all modes are still unsettled. For ocean freight, long-term contracts were up by 50% or more in the first half of 2022, but were settling down to pre-pandemic levels by the end of the year. Air freight rates were 100% higher over pre-pandemic levels in early 2022 (at some points in 2021, rates were up sevenfold), but were softening by the end of the year.

North American trucking rates were up 7% in the contract trucking category at the end of 2022, while the spot rate had plummeted from 67% above equilibrium in mid-2021 to 31% below in late 2022, according to the Coyote Curve Index. (Coyote Logistics, a trucking broker, defines “equilibrium” as zero change of year-over-year comparisons.)

The potential for a global recession to set in during the coming year is making supply chain managers leery of locking in contract rates, since spot rates might be more attractive in coming months. Or not.

In the recent past, “The supply chain(s) used to be quite seamless and fluid,” says Marie-Christine Lombard, CEO of third-party logistics (3PL) provider Geodis, in a recent 

 interview. “But it’s no longer smooth. It goes up and down. The world order has a huge impact on the supply chain and its stability.”

As an industry that usually requires premium services for moving its products, the pharma/ healthcare industry generally did not suffer the holdups in deliveries during and after the pandemic. But the transition was by no means smooth. “Refrigerated containers for pharma get a prioritized position on ocean freight," notes Robert Coyle, SVP of healthcare at Kuehne+Nagel, a global logistics provider. “But during the ocean freight crunch, it was difficult to maintain that priority when general freight rates approached or exceeded premium rates. We spent time talking with our carriers to make sure the message stayed on track that these pharma/ healthcare shipments would not get bumped, due to the importance of the products to our customer’s patients.”

Global provider UPS worked with World Business Research, a conference company to complete a poll of pharma supply chain managers in late 2021 and early 2022. In the “Vital Signs” survey it released at mid-year, cost control was the biggest challenge respondents reported. Not far behind that leading challenge was the specific instance of cold chain costs; interestingly, “cold chain management” had the same ranking as costs.

“Real-time tracking of cold chain shipments is becoming a more sought-after service,” says Dan Gagnon, VP of healthcare marketing at UPS. “We’ve responded with an initiative to aggregate all the fragmented elements of the supply chain, from warehouses to the transportation modes of ground, air, and ocean.” He touts the advent of UPS Premier services, currently being rolled out in the US and eventually globally, which will feature location and condition monitoring throughout a shipment, based on devices installed on shipments and in communication with a global network.

Uniform service quality is also a goal at K+N, where the company’s 238 GXP-compliant healthcare facilities are being brought to a uniform level of quality management, says Coyle. The scaleup of global vaccine distribution over the past two years will have a lasting impact for all pharmaceutical distribution, he adds. “Our customers are noticing that the effort we’ve put into linking our logistics services with our emergency and relief services gives them the capability to take products into markets that they couldn’t reach previously,” says Coyle. The company has doubled its healthcare-specific staff over the past three years and established uniform service-quality standards globally.

At least regarding pharma cold chains—and healthcare products generally—there is still a land grab going on for claiming a bigger share of a high-growth market. Industry surveys like the Evaluate Pharma World Preview Report peg pharma’s growth at a 6% compound annual growth rate (CAGR) through 2028 (although growth for this year is less, due to the expected recession). Temperature-controlled biologics and other specialty pharmaceuticals are expected to continue growing at twice the general industry rate.

 noted capacity expansions or acquisitions by DHL, K+N, UPS, FedEx, Tower Cold Chain, Cryoport, and BioLife Solutions, and cold-chain-specific technology introductions by Envirotainer, va-Q-tec, SkyCell, Lifoam, and Sonoco ThermoSafe—all in the prior 12 months (see https://bit.ly/3J9sN2a). Since then, UPS has acquired Bomi Group, an Italian international healthcare logistics provider. Geodis acquired trans-o-flex, a German delivery company for healthcare products. DHL Supply Chain has acquired NTA, a Mexican healthcare logistics concern. Kuehne+Nagel has contracted for airside capacity—including cold chain storage—at the OR Tambo International Airport in Johannesburg, South Africa, and has executed on its long-term contractual arrangement with Atlas Air for charter air flights. Marken, a UPS subsidiary specializing in clinical trial logistics, acquired Cedra Express, a medical courier in New Zealand.

New technology introductions in recent months include Swiss Airtainer, a new company offering an air-freight unit-load device to compete with Envirotainer, CSafe, and DoKasch. Sensitech has upgraded its lines of Temp-Tele dataloggers. With a June acquisition of an internet of things (IoT) networking company, Qopper, ParkourSC, a software platform for real-time supply-chain management, now enables “digital twinning” of supply chains, the better to analyze and optimize performance.

The US’s big three wholesaler-distributors—McKesson, AmerisourceBergen, and Cardinal Health—each have specialty pharmaceutical logistics business units. AmerisourceBergen integrated World Courier, a clinical logistics company, with its ICS business unit a few years ago. More recently, in November, Cardinal Health announced a collaboration with Medically Home around Cardinal's supply chain network and last-mile fulfillment tool, Velocare, to enable hospital-level acute care in the home by fast product and service delivery.

Many, if not all of these companies are also targeting the emerging business of cell and gene therapies (CGTs; also known in Europe as “advanced technology medical products, or ATMPs). CGTs have attracted billions in venture-capital and Big Pharma investment in the past few years (although down somewhat in 2022); over 1,000 companies globally are developing candidate therapies, according to data published 

by the Alliance for Regenerative Medicine (ARM), a trade association that includes tissue engineering with CGTs.

There is real excitement in the field; the 20 or so products that have been commercialized around the world hold the promise of actually curing serious diseases, especially genetic birth defects that can be fatal if untreated. From a logistics perspective, however, the excitement needs to be tempered by the reality that the treatments are often formulated for individual patients with rare or ultra-rare diseases—there will be no mass market therapy in the near future. For some therapies, a few dozen vials of genetically altered cells might be all that is necessary for a year’s inventory.

Taken as a whole, what adds to the logistics business for CGTs is the volume of clinical trials currently being conducted. As of mid-2022, ARM counts 2,093 clinical trials going on worldwide, including 200 Phase III trials. “Because some of these therapies are for individual patients, the commercial (after approval) supply chain will be very similar to the clinical supply chain," notes K+N’s Coyle, who previously worked at GSK. “With traditional meds, logistics and supply chain processes for clinical trials are different from the processes once the products are approved. Now with some of the new products, the clinical and commercial processes are starting to align, and we need to look at designing the supply chain for the entire product lifecycle.

World Courier conducted a survey in mid-2022 and found a laundry list of attributes that CGT developers look for in their logistics providers (see chart at left). Note that the ability to serve commercial patients, as well as to manage clinical trial logistics, are on the list.

An added complexity of the CGT field is that many of its transportation and storage needs require cryogenic conditions (roughly, -170°C, a point at which living cells—which many CGT therapies are—become dormant and, therefore, preserve their efficacy). The Nashville company Cryoport, for one, has latched onto this requirement by offering a growing list of services ranging from dewars containing liquid nitrogen to ultracold refrigerators, to cell collection, preservation, and delivery services. “Future advances in medicine will be more and more at a cellular, rather than chemical or biochemical basis,” says Jerrell Shelton, CEO of Cryoport. Currently, the company is introducing the Cryosphere, a dewar that maintains performance regardless of its orientation (conventional dewars lose cooling if laid flat or upside down), and is developing a proprietary condition monitoring system to track and report shipping data.

The majority of CGTs on the market or in advanced development are autologous ones, requiring the use of the patient’s own cells. This necessitates a complex process of extracting those cells, delivering them to the manufacturer, and then returning them to the same patient, all within tight time constraints. The alternative, allogeneic therapy, uses cells that are treated to make them compatible with any patient and, thus, they are sometimes called “off-the-shelf” CGTs that can be stored until needed. That creates a distribution system more like conventional biotech products.

Something of a milestone was reached in December when the first allogeneic CGT received market authorization in Europe: Atara Biotherapeutics’ Ebvallo (tabelecleucel), a treatment for a rare hematologic malignancy for patients with organ transplants. “The approval of Ebvallo in Europe is a medical breakthrough for patients with significant unmet need,” stated Pascal Touchon, president and CEO of Atara, upon the announcement. “As the first allogeneic, or donor-derived, T-cell immunotherapy to receive approval from any regulatory agency in the world, this marks a historic moment for Atara, our European partner, Pierre Fabre, and for the broader cell therapy field.”

Being living cells, though, means that allogeneic CGTs will still need precise temperature control. “Freezing cells below -150°C using cryogenic storage techniques is one option to address the shelf-life for fresh cells, allowing them to be kept almost indefinitely,” writes Adrea Zobel, senior director of personalized supply chain at World Courier. “However, emerging markets and remote locations, in particular, may not have the specialist facilities to maintain cryogenic storage and transport. Cryopreservation, in some cases, is critical to enable long-term storage and long-distance transit.” She goes on to say that significant infrastructure upgrading is now occurring, with advanced packaging solutions, coolant charging stations, and real-time location tracking and temperature monitoring.

Complementing this perspective is a 2022 study from Insight Partners, "Cryopreservation Equipment Market Forecast," which values the current equipment market at $6.4 billion, growing by an 11.9% CAGR to $12.5 billion by 2028.

Post-pandemic conditions are improving for the temperature-controlled market, but, meanwhile, the technical demands are rising.