@Risk

Recent headlines about shortages of H1N1 vaccines underscore the unique challenges and risks that are embedded in the medical products supply chain.

For example, the globalization of manufacturing and supply of medical products has created an array of significant safety and security concerns –issues that need attention from the industry, from governing organizations like the FDA, and from the international health care community as a whole.

Yesterday, PharmTech.com published an excellent discussion about these and other pharma supply chain threats.

In “How to manage the threat of the global supply chain and save money,” Julian Mosquera, Director of LCP Consulting, identifies several key issues regarding complexity and security in the pharma supplier network.

Globalization means extended supply chains, and that elongation decreases visibility and complicates communication, Masquera explains. In addition, the threat of intellectual property right risk also increases because as manufacturing operations become decentralized and region specific, the risk of products being copied multiplies.

Masquera also addresses the issue of parallel trade. From the article:

The second (dynamic) is the practice of parallel trade, which is a major concern as product moves across borders through grey channels, potentially risking safety, as well as eroding margin. While this is difficult (if not impossible) to eliminate, a responsive and relatively low cost supply chain, with product flowing at high velocity into markets, limits the levels of inventory that exist in any given channel at one time and spoils the grey supply chain.

Parallel trade is an area where product and market channel (and consequently unique country packaging) has driven complexity, reducing the full potential for supply chain/production efficiencies. Given that distributors still find it cost effective to repack/remarket ‘grey’ product, one aspect of prevention is to use the supply chain as a competitive weapon and tighten the supply side economy so that surplus inventories are not readily available.

Clearly, pharma companies, regulatory agencies, and the health care community, in general, have significant challenges to overcome. However, securing the global supply chain of medical products is critical.  After all, what good is the most advanced flu vaccine if we can’t guarantee not just its efficacy, but its purity, safety, and timely delivery, as well?