IBM Study: Pharma Executives Concerned About Supply Chain Safety

Supply chain executives at pharmaceutical and life sciences companies are increasingly concerned about the risk of counterfeit drugs and contaminated medications amid the complexity of global manufacturing, according to an IBM study.

In a September 9th, press release by IBM, the company describes how they conducted a study which surveyed executives at pharmaceutical, biotechnology, medical device and consumer health care industry companies who are responsible for planning, logistics, procurement and coordination throughout the life of a drug or medical device. Here are some of the key findings from the study:

• Reducing the risk of counterfeit drugs and contaminated medications amidst the complexity of global manufacturing are among the top concerns of the pharmaceutical and life sciences industries today.
• Tracking every step of how drugs are manufactured and distributed are key priorities for more than 70 percent of companies.


• Monitoring risk to prevent counterfeiting, drug and device recalls, or even the loss of intellectual property, is a priority for 75 percent of executives, as margins become slimmer and supply chain complexity rises. Three-quarters have risk and performance initiatives such as surveillance programs, anti-tamper devices and specialized labeling, but with mixed results.


• 46 percent consider vendor-managed inventory for their customers extremely effective but only 4 percent use it to ensure they are precisely meeting customer demands for products.


• Compared to 18 other key industries, the life sciences business is one of the most highly globalized, particularly in the area of Research and Development. From a supply chain perspective, the industry is not as advanced. In general, global sourcing brings with it challenges including daunting capacity, quality, lead times and delivery issues.


• For the life sciences industry, seventy-six percent of respondents suffer quality issues linked to global sourcing while nearly fifty percent reported increased sales from their globalization efforts due to the growing population of consumers in rapidly developing markets.


• "As the industry faces a time of transition, supply chain executives are outsourcing more business processes, turning to emerging markets and becoming more globally integrated, all while actively managing risk," said Dr. Philippe Cini, IBM Global Business Services, Life Sciences Supply Chain Management Partner.


• Counterfeiting is one of the biggest risks facing the pharmaceutical industry today. According to the World Health Organization, approximately 10 percent of the worldwide drug supply is counterfeit. To combat such risks, sophisticated simulations and data models help companies calculate risk, and building intelligence into products and packaging such as barcodes, RFID tags and other smart devices, supply chain executives can prevent theft. This type of new intelligence along with e-pedigree and track-and-trace capabilities also enables the entire supply chain to respond quickly in the event of a recall.

The study -- "The Smarter Supply Chain of the Future: Life Sciences Edition" -- was developed by IBM Global Business Services' Supply Chain Management Practice in conjunction with the IBM Institute for Business Value, which develops fact-based strategic insights for senior business executives.

While XStream endorses this study, much of IBM’s conclusions regarding the solution to supply chain safety center on taggants and smart track and trace solutions. XStream acknowledges that these are a part of the overall solution but also believes that it is also crucial for the entire supply chain to incorporate materials authentication and verification into an entire suite of solutions to monitor quality, handling, fraud and counterfeiting. Sophisticated supply chains not only require knowing where a product has been, but what is in package.

To view the press release visit: www-03.ibm.com/press/us/en/pressrelease/28352.wss
To learn more about XStream Systems’ solutions, visit: http://www.xstreamsystems.net/

Business Standard: WHO to Revive Talks on Fake Drugs

Joe C. Mathew of the India Business Standard in their Saturday, September 5, 2009 edition reports on the upcoming meeting annual meeting of the World Health Organization. The World Health Organization Meeting will be tackling the fake drugs and their definition:

• The matter had to be taken out of WHO’s annual meet — the World Health Assembly (WHA) — agenda early this year due to protests from countries like India, which felt the proposed definition would harm seamless movement of genuine medicines between developing and least developed nations.


• The meeting of the WHO’s South-East Asia region, beginning in Nepal on September 7, is to revive the talks on counterfeit definition. The meeting is expected to hear various lobby groups on the possible changes that can be made to the current definition.


• The main point of contention is known to be the way ‘substandard medicine’ will be described.


• “A medicine which does not meet the quality standards is easy to be classified as a substandard medicine. But how do you classify a medicine that meets the quality standards but has been given marketing approval based on information that was deliberately false? This is the issue that needs to be tackled,” said an official.


• Representatives of the domestic drug industry said they were not aware of the development. The issue of counterfeit medicines was on the agenda of the 62nd WHA in May 2009, but was deferred till the next year’s meet due to lack of consensus.

To view the entire article visit: http://www.business-standard.com/india/news/who-to-revive-talksfake-drugs/369038/

Keeping It Real Report reveals 700,000 Die Each Year from Counterfeit Drugs

Do you think that the counterfeit drugs issue is a small issue? Think again! In poorer countries they can account for as much as half of the supply chain and they claim an estimated 700,000 lives a year. In addition, their very use can undermine the effectiveness of the legitimate drug, thus adding research time and dollars to its list of victims.

A report issued this month from the International policy network gives a good overview of the problem of counterfeits in poorer nations. Below is a some highlights of an article by Franklin Cudjoe from IMANI Health on the report:

Counterfeit drugs kill over 700,000 people every year - new report

A new report from the International Policy Network and sponsored by IMANI Center for Policy & Education details the shocking burden of fake drugs in less developed countries. Fake tuberculosis and malaria drugs alone are estimated to kill 700,000 people a year. That's equivalent to four fully laden jumbo jets crashing every day.

The report lays bare the ballooning problem of counterfeit and substandard drugs, which can constitute one third of the drug supply in certain African countries. These dodgy drugs result in unnecessary death and increased levels of drug resistance.

The report highlights more shocking evidence, such as:

• Nearly half the drugs sold in Ghana, Nigeria, Angola, Burundi, and the Congo are substandard

• About two thirds of artesunate (anti-malaria) drugs in Laos, Myanmar Cambodia and Vietnam contain insufficient active ingredient.

The entire article can be viewed at: www.modernghana.com

May 2009 report can be viewed at: www.africanliberty.org.

When, Not If, a Major Pharmaceutical Counterfeit Incident Will Impact the US Supply Chain In 2009

By: Alan Clock, Senior Vice President, XStream Systems, Inc.

As I have traveled around the country speaking with many pharmaceutical industry and supply chain thought leaders in 2008, it seems apparent to me that all those in the know realize that the United States will shortly be facing a major health care crisis caused by the introduction of large amounts of counterfeit pharmaceuticals into the supply chain.

The question among these leaders is not if, but when.

I am predicting something in 2009. And it won’t be something as subtle as the counterfeit heparin which officially wasn’t a counterfeit, but poor manufacturing process caused by counterfeit raw materials. The number of casualties will go well beyond the 250 or so officially considered killed by the bad heparin. I am guessing we in the United States will be dealing with something that will affect thousands of lives this time. Unfortunately this incident or number of incidents, will force many within the industry and regulatory agencies to finally act aggressively and begin doing things that will actually solve the problem.

Just for the record, I consider counterfeit raw materials a counterfeit and officially labeling it otherwise does not make the consequences any less deadly. I don’t believe officials will be able to pass the next incident off as bad manufacturing practices, because likely it will not be quite as subtle.

I don’t like to predict doom and gloom, but my outlook for this healthcare issue is based on some pretty significant evidence that points me to this ultimate conclusion.

• The continued rise in the estimated counterfeit percentage of the supply chain globally. Most experts believe that globally, in third world and developing countries that up to 50% of the medication within their supply chain is counterfeit or adulterated.

• The rise in percentage of counterfeit and adulterated medications in the supply chain in non-third world countries. Some European countries estimate averages above and beyond 10% of the medications within their supply chain are counterfeit or adulterated.

• The fact that over 90% of the raw materials and 60% of the production of medication globally (including Europe and the United States) is now done in countries with some of the highest rates of counterfeit medications within their supply chain.

• High death rates in Africa and Asia based on either the consumption of counterfeit or adulterated medications or diseases like malaria which were not properly treated because of counterfeit or adulterated drugs.

• The FDA hastily opening three major field offices in China and the deployment of thousands of inspectors overseas in an overt but questionable effort to somehow police hundreds of thousands manufacturers and suppliers importing billions of tons products into the United States into hundreds of ports of entry.

• The fact that nearly every major pharmaceutical manufacturer and pharmaceutical distributor in the United States has had to deal with significant liability because of a counterfeit or adulterated medication within their brand or distributed through their companies. The reality is though even after spending millions in attorneys, court cases and settlements there is still not a significant deterrent or protection of their inventories, in fact now given the increased globalization these same entities are in fact more vulnerable now than they were ten years ago.

• The global economy as it continues its slide will continue to fuel individuals and well financed organizations to continue their harmful but profitable enterprises of counterfeiting medications.

• Finally and of most significance to me is the fact that when XStream deployed an XT250 system within a small secondary distributor in the Southeast United States, our system discovered four individual counterfeit medications within the first sixty days of authenticating their inventory.

There are many more “signs” or evidence that I could point to but I think that I have made my point. This is one of those "perfect storm" issues where all of the elements of a significant disaster seem headed for a major collision and the United States consumer is the tiny boat hoping to stay afloat and above water.

I hope I am wrong, but unfortunately, I know I am right. Maybe not about the exact date but now it is a matter of when, not if.

About the author: Alan Clock is a veteran of over 20 years within the pharmaceutical industry. He has served in senior positions with pharmaceutical distribution companies and disease management organizations. He is currently the Senior Vice President of XStream Systems, a high tech start up focused on a revolutionary solution to the authentication of pharmaceutical products within their sealed unit of sale. He can be reached at aclock@xstreamsystems.net. For more information on XStream visit their website at www.xstreamsystem.net.

Drug Verification Technology to be Presented

XStream Systems, Inc. is scheduled to present our technology and pharmaceutical industry applications at a symposium in Orlando, Florida. The Seventh Pharmaceutical Powder X-Ray Diffraction Symposium (PPXRD-7) will take place February 25-28, 2008 at the Florida Hotel and Conference Center.

The title of the oral presentation to be given is “EDXRD Probe for Pharmaceutical Verification.” While speaking, Dr. Noureddine Anibou will discuss the importance of pharmaceutical verification and give an explanation of XStream Systems’ technology and its documented accuracy rates.

Here's a link to the conference's website: http://www.icdd.com/ppxrd/
...and a link to view a .pdf of the presentation: EDXRD_Probe-Pharmaceutical_Verification.pdf

Counterfeit Drug Facts

This is the first entry for a blog dedicated to addressing concerns and providing solutions to the counterfeit pharmaceutical dilemma. We should probably have a statement about how great it is to have a blog, or write a "warm & fuzzy" sort of intro, but we'd rather jump right into the facts.

As we have studied the counterfeit drug problem over the past few years, the same numbers keep popping up:

Global industry experts agree that on average 10% of the world’s drug supply is considered counterfeit, adulterated or otherwise fraudulent. With Americans purchasing 44% of all pharmaceuticals sold worldwide last year, if only 1% of the US drug supply was tainted it would equal 34.2 million prescriptions that are potentially life threatening. This equates to approximately one counterfeit prescription for every nine American citizens in 2006 alone!

Our company, XStream Systems has developed a unit that can help. More on that soon...