Wednesday, January 03, 2007

2007 Trends: DIY Supply Chain Security (3 of 4)

Here is the third of four posts about major health care trends that I am watching for 2007 along with links to relevant posts from last year. The first two trends are:

Trend 3: DIY supply chain security

State and national governments had a mixed year in protecting the public from counterfeit drugs. Florida overcompensated for years of lax enforcement by finally implementing pedigree laws, although some last minute compromises created controversy. However, the FDA still couldn’t get the PDMA’s minimum standards implemented despite the U.S.’ crazy patchwork of regulation and inconsistent state-level enforcement. The international situation is even worse due to rampant parrallel trade. A new study by the U.K.'s Medicines and Healthcare Products Regulatory Agency claims that "...counterfeiters are targeting the UK's pharmaceutical supply chain, selling counterfeit drugs to wholesalers who supply the NHS
claims."

Now, Democratic Senators Gorgan and Vitter, among others in Congress, want to open up new gateways for counterfeits with the magic bullet of reimportation despite Canadian’s understandable reluctance to be our drugstore. Perhaps the FDA can take consolation in the fact that Canadian online pharmacy MediPlan is winding down, although the young founders left rich. Check out this hilarious screed by Robert Goldberg of DrugWonks.

As a result, private companies are being forced to shoulder the burden of protecting the drug supply chain with a do-it-yourself (DIY) model. Manufacturers in the U.S. are already investing resources into gaining visibility into the movement of their product from factory to patient. Overseas, Pfizer Inc, GlaxoSmithKline plc, and AstraZeneca plc have all announced plans to overhaul drug distribution in the UK, Europe’s major destination for parallel imports. The Cardinal Health Inc (NYSE:CAH) agreement with the New York Attorney General’s office will force the wholesaler to take over monitoring and enforcement activities that would normally be the responsibility of a state pharmacy board. (I’ll say more about the agreement soon.) Even RFID, the most hyped supply chain technology since B2B exchanges, is being developed by private efforts, not government mandate.

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