Drug Tracking on the Move

How government mandated drug traceability is transforming healthcare supply chains

As a highly regulated, safety-oriented industry, healthcare has been identified as one the least digitized industries, lagging even behind government [4]. In a rare reversal of roles, the Food and Drug Administration (FDA) is looking to push pharmaceutical manufacturers, distributors, wholesalers and pharmacies into the digital revolution through the Drug Supply Chain Security Act. The FDA has created a roadmap to introduce comprehensive drug identification and tracking, which has the potential to improve the quality and reliability of pharmaceutical supply chains as threats of counterfeiting and cybersecurity continue to grow.

The status quo for drug supply chain monitoring is an extremely high-risk safety and security threat. Historically, drug identification relied on pharmacists at the end of the supply chain, and thus determining where a security breach such as counterfeit drug distribution may have occurred was limited and could result in widespread product recalls. A counterfeiting threat could not only disrupt supply of critical drugs but also be life-threatening to patients. Indeed, counterfeiting is a deadly concern in the healthcare industry, responsible for over 100,000 deaths each year globally, and it’s imperative that drug manufacturers and their distribution partners work to counter this threat through improved traceability and authentication of drugs [2]. Despite the significant need for improved drug supply chain security, the first use of RFID tagging was introduced into pharma in 2006 by Pfizer [1] and the first FDA requirements for electronic tracing only came into effect a decade later and are being phased into full practice through 2023 [3].

Over the next six years, this FDA mandate is to create an “electronic, interoperable system to trace products at the package-level” throughout the supply chain, which is the basic level of security required to deter counterfeiting [5]. As of 2015, drugs manufactured and sold in the U.S. require batch codes and clear chain of custody across the supply chain from manufacturer to point of sale [3]. This is a significant improvement at the batch level because it can help identify sources of weakness in a supply chain, but there is still room for improvement by moving to product-level barcoding and scanning in the near term. Creating a digital signature for products that can be validated and verified at every level of distribution is essential for assuring that products are safe for patients and being administered as directed. The FDA is also moving to an accreditation model whereby distributors and wholesalers must be certified as authentic, trustworthy vendors to further improve compliance and reliability [5]. These measures are helping to create an ecosystem for supply chain security, reliability and responsiveness to assessing issues.

In addition, these measures will become increasingly important as the drug distribution model moves from physical pharmacies to consumer home delivery. From aging baby boomers to millennials on the go, consumers are no longer satisfied with going to pharmacies to pick up prescriptions. Instead, consumers are looking for added convenience in their health management. Companies such as eScripts already provide mail-delivery drugs for most pharmaceutical categories and others such as Amazon are ready to move in. However, advanced security such as visual cryptography or multi-step authentication should be required to maintain the integrity of the supply chain [2]. For example, Augmented Reality technology is now being used by pharmacists to create dual physical and digital cryptographic images to add additional layers of protection [6]. As digitalization increases, the threat of cyberattack becomes both higher risk and more likely for the system. Thus, redundancy and relentless focus on improving security are critical, and digitalization can provide the necessary tools to achieve these goals.

Moving to increased digitalization of drugs also allows for greater connectivity with other parts of the consumer’s health experience. For example, connected pill boxes and automated refills can be supported by internet of things (IOT) to improve patient compliance [6]. Similarly, devices that monitor body functions such as blood pressure, heart rate or glucose levels can provide real-time feedback to both physicians and patients on the efficacy and safety of certain drugs. For drugs that require close monitoring such as blood thinners, this type of monitoring can reduce the number of in-person doctor’s visits a patient requires and result in a more rapid titration of drug dosage to meet the optimal medical outcome.
Government mandated drug traceability is transforming healthcare supply chains, but this is only the first step to providing safe, accessible drugs to patients in the future. Digitalization through electronic identification, distributor network certification, cryptography and IOT must be implemented in order to protect supply chains from critical failures.

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  1. CNET. (2017). Pfizer fights fake Viagra with RFID. [online] Available at: https://www.cnet.com/news/pfizer-fights-fake-viagra-with-rfid/ [Accessed 15 Nov. 2017].
  2. Deloitte. (2017). 2017 Global health care sector outlook. [online] Available at: https://www2.deloitte.com/global/en/pages/life-sciences-and-healthcare/articles/global-health-care-sector-outlook.html [Accessed 15 Nov. 2017].
  3. Fda.gov. (2017). Medical Device Interoperability. [online] Available at: https://www.fda.gov/MedicalDevices/DigitalHealth/ucm512245.htm [Accessed 15 Nov. 2017].
  4. Harvard Business Review. (2017). Which Industries Are the Most Digital (and Why)?. [online] Available at: https://hbr.org/2016/04/a-chart-that-shows-which-industries-are-the-most-digital-and-why [Accessed 15 Nov. 2017].
  5. Overview of Product Tracing Requirements. (2017). [PDF] Food and Drug Administration. Available at: https://www.fda.gov/downloads/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/UCM464907.pdf [Accessed 15 Nov. 2017].
  6. The Future of Life Sciences and Healthcare Logistics: A DHL perspective on key trends and technologies. (2017). [PDF] Deutsche Post DHL. Available at: http://www.dhl.com/content/dam/downloads/g0/about_us/logistics_insights/dhl_future_of_lsh_2017.pdf [Accessed 15 Nov. 2017].


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Student comments on Drug Tracking on the Move

  1. How can digitization in the drug supply chain be used to lower drug costs? For instance, could more accurate tracking of drugs through the cold supply chain be used to deliver better quality drugs to very cost-sensitive third-world countries? One of the biggest issues is that, even if temperature sensitive drugs make it to remote villages in warm places, they are often expired by the time they get there. I’d be curious to see where digitization could be applied beyond the established markets. Great essay!

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