Patient-centric networks at the heart of pharmaceutical supply chain management: Lessons from LogiPharma Europe 2018

Dr. MadhavDurbha

LogiPharma 18

In early April I attended the LogiPharma Europe 2018 conference in Montreux, Switzerland, an event that attracted more than 800 attendees, including practitioners and executives from pharma and medical device industries, along with software vendors and many service providers.

Here are some key takeaways from a content-rich, fun and exciting pharma supply chain conference.

1. Patient-centric networks are reshaping pharma supply chains

In a thought provoking presentation, Philippe Francois, global head of supply chain for Novartis, observed that while pharma companies have been talking about patient centricity for years, a typical pharma supply chain links the Active Pharma Ingredient (API) to manufacturing, distribution, retail/pharmacy, and finally to patient—with the patient always at the end of the chain!

Francois talked about how cell and gene therapies are personalizing medicine, putting individual patients at the center of the supply network. Francois discussed the specific example of CAR-T cell therapy for certain types of cancers wherein immune cells harvested from a patient are reengineered at a production facility, and are then reinjected into the patient so the reprogrammed cells fight cancer. In this instance, the supply chain begins and ends with a specific patient, providing an extreme example of personalized medicine. Given that the cells involved are living, they have very short lifespans and must be shipped in tightly managed, cryogenic conditions in a timely manner. From the moment the cells are harvested, downstream visibility is extremely important with no margin of error.

Interestingly, just a day before the LogiPharma conference, Novartis announced the acquisition of AveXis, a gene therapy company for US$8.7B. While this announcement brings some very exciting opportunities for Novartis, it ups the ante in terms of the required supply chain competence. Francois said such advances in personalized medicine are forcing pharma companies to think differently. Also, reimbursements in such treatments are linked to outcomes, truly placing the patient at the center.

2. Lessons from Amazon for pharma companies in enabling patient centricity

Philippe Hemard, former VP of Logistics Europe for Amazon, discussed what pharma companies need to learn from Amazon:

  1. As life expectancy grows, there will be more patients with mobility issues. Delivering the product in the most convenient way—when and where they need it—will be a differentiator.
  2. Patients will need to enjoy the benefits of same-day delivery, something Amazon has clearly demonstrated is feasible in the non-pharma space.
  3. Excellence in operations driven by end-to-end visibility into inventory levels will be important. Amazon manages millions of SKUs with such visibility, which is something pharma distribution networks must quickly aspire to.
  4. Bring cost and affordability to patients by reducing the costs of delivery.

Of course, all of this is easier said than done. Amazon has the scale to manage the distribution in a cost-effective manner. It will be interesting to see how pharma rises to the challenge, especially with Amazon’s entry into the space looming on the horizon.

3. Concurrent planning breaking down silos


In a very compelling presentation, Brian Thornley of Merck spoke of his organization’s journey from siloed, node-to-node planning to concurrent planning. To highlight his point, Thornley shared this example: The API was manufactured in China, granulation was performed in Puerto Rico, and then packaging was performed in Netherlands. In his previous reality, planners were very focused on these individual steps but not for the end-to-end flow.

Now, with concurrent planning, planners not only have end-to-end visibility of the product flow plans but also can simulate a variety of scenarios. For example, what if sales were to increase by 20 percent, or what if a piece of equipment goes offline? Do I have the system-wide ability to support the demand in such situation and still manage my assets and inventory effectively? Planners can now quickly assess impacts and evaluate options based on such scenarios.

4. Taming supply chain planning complexity through automation

Niall Kennedy of Gilead Sciences spoke about how an integrated supply chain transformation program is helping his company keep pace with the growth in the business. Some of Gilead’s drugs contain up to four APIs, with each API having several variants. This results in significant planning complexity that must consider regulatory compliance regarding where the lots are made and where the lots are eligible to be sold based on genealogy.

Planners once carried the burden of this complexity in their heads as previous planning systems could not account for regulatory constraints. This resulted in plans that were not feasible to execute. Today, Gilead leverages Kinaxis RapidResponse® to integrate its regulatory database with supply chain planning. With this, the full level pegging of demands to the supply in various stages in their master production schedule honors regulatory rules, making the plans realistic and feasible. This makes for a powerful pharmaceutical supply chain management story!

5. Pharma supply chain projects are moving from linear to agile

Several presenters commented that their organizations are moving away from linear-style project management to a culture of experimentation. Hussain Mooraj of Deloitte said it well with the “think big, start small, scale fast” approach that he sees more and more companies taking. This observation matches what I am seeing in pharma companies and in other industries I work with. The days of massive implementations with questionable payoff are numbered. We’re tackling more and more projects in smaller chunks, with pay-as-you-go models. Clould-based offerings are enabling such consumption models. The rise of cloud-based technologies is evidenced by the number of software vendors, 3PL and 4PL companies in attendance at the event who were there speaking to the virtues of cloud.

6. Smart devices enable digital supply chains

Simon Orchard of Pfizer spoke of the pilot projects his team is working on in the field of GPS-enabled temperature sensing to monitor cold chain logistics. Orchard also discussed a pilot that leverages drones for inventory cycle counting in warehouses. Instead of conducting labor intensive cycle counts once or twice a year, Orchard described how Pfizer uses drones to perform cycle counts overnight to significantly improve inventory accuracy and reduce labor costs. Several vendors at the event showcased a variety of IoT devices, most of which provided temperature and location monitoring and logging such information in the cloud.

Of course, a pharma supply chain conference is not complete without talking about Blockchain. However, it is clear the presenters on the topic had more questions than answers. Supply chains for personalized medicine need to operate with 100 percent precision, and in my view Blockchain could very well prove to be useful in such contexts. The high revenue opportunity associated with personalized medicine (with therapies costing hundreds of thousands of dollars!) can help justify the investment in the Blockchain technology.

This pharma supply chain conference was both energizing and thought provoking. LogiPharma Europe 2018 was a great opportunity to reconnect with several customers and business partners, while establishing new connections, which will no doubt prove long lasting.

Dr. MadhavDurbha

As Vice President of Industry Strategy at Kinaxis, Madhav serves as a trusted advisor for our customers through sales and implementation, ensuring success. He also engages with our strategic customers and key industry leaders to drive thought leadership and innovation. Madhav joined Kinaxis in the summer of 2016, bringing many years of experience in Supply Chain Management across various industries. Madhav started his professional career at i2 (which was later acquired by JDA). During his 17+ year tenure at i2/JDA, Madhav played numerous roles in Customer Support, Consulting, Presales, and Product Management. During his illustrious career, he was instrumental in helping enable numerous large scale transformational supply chain opportunities. He is very passionate about Supply Chain Management and the role it plays in making the world a better place. He shares this passion with others through his engagements and writings. Madhav has a Ph.D. in Chemical Engineering from University of Florida and a B.Tech. in Chemical Engineering from Indian Institute of Technology (IIT), Madras.

Madhav received the ‘Supply Chain Pro to Know’ recognition in 2017 by Supply & Demand Chain Executive magazine.

More blog posts by Dr. Madhav Durbha

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