Innovations and Challenges in Global Supply Chains

Innovations and Challenges in Global Supply Chains

November 11, 2016

November 11, 2016 - The term “pharmaceutical supply chain” (“biopharmaceutical supply chain”) is another one of those complicated phrases that says everything and nothing. The pharmaceutical supply chain is a complex process that is more like a “web” than a “chain”. It is responsible for the creation, manufacturing and distribution of medicines and medical products around the world. The more that we understand how it operates and its importance to healthcare, the more we can develop partnerships to solve the bottlenecks that prevent patients from getting the medicines they need. With healthcare issues consistently topping patient concerns, media headlines, and policy agendas, I frequently wonder how different some of these conversations could or would be if patients had a better understanding of the supply chain and exactly why it is so important to healthcare and healthcare delivery.

Over the past few years, Healthcare Ready has focused heavily on the supply chain and making sure that operations were minimally disrupted during emergencies. Historically our organization focused on the US pharmaceutical supply chain, but as supply chains expanded geographically it has become impossible to address local issues without understanding their global links. As an example, the FDA reports that more than 80% of all active pharmaceutical ingredients are manufactured abroad. This means that many components of medicines are often made in other countries and imported in for manufacturing. Additionally, complex terrain which is further complicated during natural disasters can create blockages which prevent deliveries.

We examined what challenges occur in ensuring medicines are made, shipped, and arrive in the hands of patients. We looked at a few countries that are contending with different public health challenges:

  • Shifting to a greater concern about chronic disease management as infectious diseases are being controlled and people are living longer (Ethiopia);
  • Managing a disease outbreak that became a public health emergency of international concern (Liberia);
  • Responding to a natural disaster in a vulnerable region of the country (the United States).

We also examined the role that global programs and public-private partnerships played in addressing bottlenecks and improve access to medicines through the supply chain. Our research revealed that the private sector is doing a lot more than even we knew in these countries, through formal programs and informal initiatives, to accommodate for the logjams that can occur along the supply chain. These findings were compiled into infographics that lay out the supply chain and the innovative programs that work to ensure medicines are being delivered to patients. 

In addition to these graphic representations of our research, I’d also like a highlight a few key points that arose during our project.

  • Most of the challenges that exist are the same across countries

Most countries struggle with supply chain operations to rural communities. This challenge is common for a number of reasons, including challenges with transporting medical products along uneven, rough terrain – often in areas without transportation infrastructure such as paved roads – and accurately forecasting product need and demand in lower populated areas, or areas with poor telecommunications. Ensuring consistent delivery of medicines can be a challenge.

Each of these countries has taken a different approach to dealing with this. Options like moving delivery times up to ensure that medicines are delivered to rural areas before an emergency and even using motorcycles for deliveries over rough terrains have been employed.

  • Some of the most important innovations have been made in inventory management

Countries also struggle with handling inventory management (at the clinical level) accurately in real-time. Inventory management is a critical aspect of supply chain operations – it is the point where supply and demand meet. Inventory management ensures there is enough of the necessary medicine(s) in a clinic/hospital. If inventories are not managed effectively, there will not be enough of the needed medicines (and possibly too much of what is not needed – which leads to waste of product).

In Ethiopia, Merck KGaA created a novel tool to track inventory and report directly to headquarters so improve planning and prevent medicine stock from falling too low.

  • Pharmaceutical security is a legitimate concern – but there are amazing solutions being used

We also learned about how hard it is to secure product – and ensure stability and physical security – regardless of the threats that were posed in the delivery process. The security of a medical product protects it from degrading, so patients receive a product that is stable, safe and effective. Concerns about product stability and avoiding diversion (i.e. theft) are issues that are faced in every country.

There are a number of new technologies that offer cost-effective, low tech ways to measure the conditions of a shipment (and report if the package has been breached in any way). Small tracking devices have been developed that can be placed inside of a shipment to track the temperature, pressure, light exposure and other details about a delivery all along the way. These advancements are useful in the U.S., but even more valuable in places where issues like temperature stability can be a major challenge.

We hope that this initiative is the first of many where we examine the global supply chain. There are many challenges that are posed by an international logistics network, but the private sector has worked diligently to rise to this challenge.

Nicolette A. Louissaint, Ph.D.

Dr. Nicolette A. Louissaint is Director of Programming at Healthcare Ready. Prior to this position, Nicolette served as a Foreign Affairs Officer at the U.S. Department of State in the Bureau of Economic and Business Affairs. During the height of the Ebola Epidemic of 2014, Nicolette served as the Senior Advisor to the State Department’s Special Coordinator for Ebola. Nicolette earned a Ph.D. in Pharmacology and Molecular Sciences, specializing in HIV Clinical Pharmacology from Johns Hopkins University School of Medicine. She completed post-doctoral fellowships at the Johns Hopkins University and the American Association for the Advancement of Science.