COVID and complexity drive pharma supply chain adoption of digital distribution

The ongoing global pandemic and growing complexity mean digital technologies are fast becoming the only effective way of managing drug supply chains and logistics

However, as the year progressed the focus (1) shifted to concerns about whether the pharmaceutical industry had sufficient capacity and infrastructure to distribute the products as rapidly as possible.

Digital distribution

For SARS-COV-2 vaccine distribution, partnership has emerged as the most popular model. According to Bloomberg (2) as of mid-February there were 132 agreements between governments and vaccine firms covering 9.59 billion doses.

For example, the COVAX (3) consortium will supply approximately 1.8 billion doses of vaccine to 92 countries before the end of the year. Similarly, the Carlos Slim Foundation (4) has signed agreements to distribute COVID-19 vaccines in Latin America.

The specifics of these partnerships differ. However, most identify digital technology as vital to the effective management of interaction between the firms involved as well as the shipment and transfer of vaccines through supply chains.

According to the World Bank (5), digital technology will “play a critical role to support the planning, delivery, monitoring, and management of vaccination programs.” The authors suggest a mixture of “open source” (6) digital distribution systems and platforms (7) used for existing vaccination programmes are being used organize COVID-19 vaccine supply.

In a similar vein, Reuters (8) said COVID-19 vaccine distribution was a “bonanza” for the digital supply chain tracking industry. The newswire cited revenue gains reported by shipment tracking technology firm Cloudleaf and tag supplier Varcode as evidence.

Supply chain security

COVID-19 may be the dominant dynamic at present, but it is not the only factor increasing pharmaceutical industry use of digital technology.

Demand for traceability through the manufacturing and distribution chain largely as a result of new regulatory requirements – with the US Drug Supply Chain Security Act (9) (DSCSA) and EU Falsified Medicines Directive (FMD) being prominent examples.

While the specific traceability rules differ for each market, most introduce the requirement that medicines must be marked in such a way that they can be followed from manufacturing facility through distribution to pharmacy shelf.

These new complex and evolving demands are prompting pharmaceutical companies to invest data driven, digitized technologies, says Tiffany Vora, chair of digital biology and medicine at Singularity University.

“Digitization opens the door to quantitative analyses of every step in the process of manufacturing, delivering, and potentially dispensing drugs,” she says. “There's increased opportunity for transparency and accountability even in real time, which could add value to a company's brand. Counterfeiting, false online claims, and more could be mitigated by digitization from within the drug industry.

“Imagine integrating such manufacturing data with clinical-trial data; how many insights are being lost by not knowing what has happened before a drug makes it to a patient?”

She also suggests data from digitization can be used to train models for machine learning and other AI approaches, “meaning that humans will no longer be solely responsible for figuring out what’s working and what’s not working and what to do about it.”

Biopharma sector

Of all parts of the pharmaceutical industry, adoption of digital supply chain management and distribution technologies is fastest in the biopharmaceutical sector.

For example, in recent years Amgen (10), Novartis (11) and Takeda (12) have partnered with Amazon as part of a “digital transformation.” While the specifics of each project differ, all involve the use of digital systems to track materials and products.

Novartis CEO Vas Narasimhan reflected on the deal last year, telling Wired (13) “we made a big investment in data science and digital two years ago, well over $500 million.

“We hired talent from Amazon, from IBM, from Google, to lead the various elements. I think the arms race now in our industry is going to be who can digitize many of these elements much more quickly than the competition.”

Deloitte noted growing industry interest in digital manufacturing and distribution in a recent (14) report. “For biopharma, the importance of supply chain integrity goes beyond counterfeit products, as key product types need chain of identity and chain of custody, particularly in personalised medicines and gene therapies.

“To tackle this, biopharma companies are investing in a combination of advanced technologies, like block chain and AI, to ensure the integrity of the end-to-end supply chain.”

The authors also predicted biopharma’s move towards digital distribution will accelerate as it becomes clear that improving efficiency and visibility across the supply chain provides a competitive advantage.

“We expect the shift from a traditional linear supply chain to an AI-enabled interconnected DSN, together with radically interoperable data, can provide a foundation for companies to compete in the future.”

Challenges

The potential benefits of digital pharmaceutical distribution chains are clear. In contrast, the technical steps involved in setting up such a system are less well documented.

Aside from investing in and connecting the technology required to run a digital network, the biggest difficulty is determining what type of information to capture and exchange, according to Tiffany Vora.

“Data operability is going to be a huge technical challenge. What parameters are most informative to measure? What format will the resulting data be in? How will those data be structured in order to maximize the potential for algorithms to extract actionable insights?” she says.

Industry will also need to decide how human operators will validate and act on those insights. Companies must also decide what information can be shared and what data will be proprietary, and what data will be available to regulators and the public.

“What data format will enable ‘process’ data to be linked to ‘in-human’ data?” she says. “Will industry standards for each of these issues be established, or will we be doomed to data silos yet again by company, drug type, process focus, geographic region, or some other divider?”

Gareth Macdonald

References:

1. https://www.nytimes.com/interactive/2020/12/10/us/covid-vaccine-distribution.html
2. https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/contracts-purchasing-agreements.html
3. https://www.who.int/publications/m/item/covax-global-supply-forecast
4. https://fundacioncarlosslim.org/english/astrazeneca-announces-agreement-with-carlos-slim-foundation-to-supply-covid-19-vaccine-to-latin-america/
5. https://blogs.worldbank.org/digital-development/digital-technologies-and-vaccine-deployment-opportunities-and-challenges
6. https://dhis2.org/covid-19/
7. https://www.ndtv.com/india-news/digital-platform-evin-repurposed-for-tracking-covid-vaccine-delivery-centre-2328153
8. https://www.reuters.com/article/health-coronavirus-tech-supplychain-focu-idUSKBN28R1EX
9. https://www.fda.gov/drugs/drug-supply-chain-security-act-dscsa/are-you-ready-drug-supply-chain-security-act
10. https://www.healthcareitnews.com/news/amgen-moves-bulk-its-cloud-infrastructure-amazon-web-services
11. https://www.novartis.com/news/amazon-web-services-aws-announces-strategic-collaboration-novartis-accelerate-digital-transformation-its-business-operations
12. https://www.takeda.com/newsroom/newsreleases/2020/takeda-accelerates-digital-transformation-with-accenture-and-aws/
13. https://www.wired.com/story/the-ceo-of-novartis-on-developing-drugs-during-a-pandemic/
14. https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/life-sciences-health-care/deloitte-ch-DI-intelligent-drug-supply-chain.pdf