For a number of reasons, including cyclical and unequal supply, a lack of environmental, social, and governance (ESG) openness, and an increase in the number of instances of counterfeit pharmaceuticals, multinational pharmaceutical corporations have been in the public eye for a long time.
Industry 3.0, the backbone of the production and distribution networks of the great majority of today’s pharmaceutical enterprises, is no longer adequate in light of this growing and pervasive scrutiny.
Industry 4.0 for pharmaceutical manufacturing: Preparing for the smart factories of the future is the title of a recent International Journal of Pharmaceutics report that highlights the need for pharma companies are required to adjust and achieve an unprecedented level of data digitalization, which includes “supply chain-related information such as raw materials variability and global tracking of materials across facilities.”
Pharmaceutical supply networks are becoming more technologically mature for a variety of reasons that go beyond data-driven decision-making and “simply” resilient supply systems. Additionally, end-to-end traceability helps achieve ESG objectives, enhances adherence to present and future regulatory requirements, and unavoidably protects patient safety.
A Plan to Adhere To Regulatory Compliance
Stricter rules are being imposed by governments and regulatory organizations globally on the pharmaceutical business in order to guarantee the safety and quality of drugs.
One such is the Drug Supply Chain Security Act (DSCSA) in the US, which mandates that pharmaceutical companies set up an electronic, serialized, and interoperable system to monitor and trace prescription medications throughout their supply chain and among all parties involved. The deadline, November 27, 2023, is quickly approaching.
Furthermore, the DSCSA is only the very beginning. This is the most recent summary of the measures that governments and regulatory bodies are using to make pharmaceutical businesses digitize their supply chains in order to improve traceability.
Digital maturity in the supply chain is now a need, not an extra. The next frontier in pharmaceuticals is to reduce the increasing risks that businesses in the industry face.
Guidelines on how the healthcare industry as a whole should create traceability best practices are also being provided by other organizations, such as the World Health Organization (WHO), the World Economic Forum (WEF), and GS1, which is in charge of various traceability standards in the healthcare industry.
It will be crucial to abide by these rules in order to prevent expensive fines and legal action, which might damage the confidence of investors, watchdog organizations, the media, financial institutions, and healthcare providers.
Reducing Theft And Counterfeit Goods In Pharmaceutical Supply Chains
The World Health Organization (WHO) projects that 11% of pharmaceuticals in developing nations are either counterfeit or of inferior quality, with many low- and middle-income nations bearing the financial brunt of these products.
Similar concerns are raised by ongoing research from the Pharmaceutical Security Institute. 5,987 pharmaceutical crime events were reported in 2021, a 38% increase over 2020. 142 nations on all seven continents were affected by these events, with North America and Asia Pacific being the most affected. According to experts, the worldwide market for fake pharmaceutical products is valued between $200 and $432 billion.
Furthermore, the issue of counterfeit drugs extends beyond dubious illicit street-market transactions. The National Association of Boards of Pharmacy has stated that it is difficult to locate a legitimate online pharmacy that sells U.S. FDA-approved medications to U.S. consumers, as there are currently 35,000 active online pharmacies operating and 96% of them violate applicable laws.
Real-time traceability systems that allow pharmaceutical businesses to get rapid notifications of nonconformities and counterfeiting warnings are highly recommended by industry experts and regulatory organizations. This approach facilitates speedier and more efficient recalls, ultimately safeguarding patients.
Expectations Regarding ESG and Transparency Are Rising
Unfortunately, the pharmaceutical business has not been positioned as a leader in the battle against social injustice and climate change because of a history of greenwashing and consumers’ impression of a lack of openness.
Lotfi Belkhir, an associate professor of engineering at McMaster University and head of eco-entrepreneurship, said in a Pharmaceutical Technology article: The pharmaceutical industry seems to have conveniently hidden behind its vision of clean facilities producing life-saving medications. Who worries about your carbon footprint when you’re so busy helping others?
However, owing in part to the need for cold storage, major pharmaceutical enterprises were found to be more carbon-intensive and to emit 55% more emissions than the automotive sector in 2019.
Businesses in the pharmaceutical industry are taking increasingly proactive steps to fulfill ESG standards despite the complexity of their supply chains. Examples of these measures include joining the Pharmaceutical Supply Chain Initiative, obtaining EcoVadis ratings, and keeping an eye on Scope 1, 2, and 3 emissions.
Nevertheless, supply chain traceability may assist in demonstrating that sustainability criteria are fulfilled at every level, independent of the measures that are being implemented. Businesses won’t be able to determine the real effect they are having without that complete openness.
