Building Radio Environment
frequency
IDentification
for
the
Global
Pharma Traceability Business Case Report Authors: John Jenkins, Paul Mills, Robert Maidment, Mike Profit
May 2007
This work has been partly funded by the European Commission contract No: IST-2005-033546
BRIDGE – Building Radio frequency IDentification solutions for the Global Environment
About the BRIDGE Project: BRIDGE (Building Radio frequency IDentification for the Global Environment) is a 13 million Euro RFID project running over 3 years and partly funded (€7,5 million) by the European Union. The objective of the BRIDGE project is to research, develop and implement tools to enable the deployment of EPCglobal applications in Europe. Thirty interdisciplinary partners from 12 countries (Europe and Asia) are working together on : Hardware development, Serial Look-up Service, Serial-Level Supply Chain Control, Security; Anti-counterfeiting, Drug Pedigree, Supply Chain Management, Manufacturing Process, Reusable Asset Management, Products in Service, Item Level Tagging for non-food items as well as Dissemination tools, Education material and Policy recommendations. For more information on the BRIDGE project: www.bridge-project.eu This document results from work being done in the framework of the BRIDGE project. It does not represent an official deliverable formally approved by the European Commission. This document: This Business Case Report builds upon Deliverable 1, The Problem Analysis, and Deliverable 2, The Requirements Analysis, and aims to define the business case for automatic identification and data capture (AIDC), traceability and mass serialisation in the European pharmaceutical sector.
Disclaimer: Copyright 2007 by (JJ Associated, GS1 UK, Verisign UK, Melior, Domino) All rights reserved. The information in this document is proprietary to these BRIDGE consortium members This document contains preliminary information and is not subject to any license agreement or any other agreement as between with respect to the above referenced consortium members. This document contains only intended strategies, developments, and/or functionalities and is not intended to be binding on any of the above referenced consortium members (either jointly or severally) with respect to any particular course of business, product strategy, and/or development of the above referenced consortium members. To the maximum extent allowed under applicable law, the above referenced consortium members assume no responsibility for errors or omissions in this document. The above referenced consortium members do not warrant the accuracy or completeness of the information, text, graphics, links, or other items contained within this material. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, satisfactory quality, fitness for a particular purpose, or non-infringement. No licence to any underlying IPR is granted or to be implied from any use or reliance on the information contained within or accessed through this document. The above referenced consortium members shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials. This limitation shall not apply in cases of intentional or gross negligence. Because some jurisdictions do not allow the exclusion or limitation of liability for consequential or incidental damages, the above limitation may not apply to you. The statutory liability for personal injury and defective products is not affected. The above referenced consortium members have no control over the information that you may access through the use of hot links contained in these materials and does not endorse your use of third-party Web pages nor provide any warranty whatsoever relating to third-party Web pages.
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Note
The views expressed in this document are the views of the joint authors and the Community is not liable for any use that may be made of the information contained herein.
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ACKNOWLEDGEMENTS We acknowledge and thank the supply chain participants – our User companies – for their time, enthusiasm and support in making this Pharma Traceability Pilot possible. Actavis Athlone Laboratories Barts and the London NHS Trust CPG Logistics Healthcare Logistics Kent Pharmaceuticals Sandoz Tjoapack UniChem
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Table of Contents Page Number
1. Introduction
…………………………………………………………..
2. Executive Summary 3. Background
6
………………………………………………….
7
…………………………………………………………..
9
4. The European Pharmaceutical Sector Trends ……………………….. 4.1 AIDC in Healthcare …………………………………………. 4.2 Traceability in Healthcare ………………………………… 4.3 Technology Trends ………………………………………….
14 14 14 15
5. Key Business Drivers …………………………………………. 5.1 Patient safety …………………………………………. 5.2 Counterfeit combatance ………………………………… 5.3 Increased efficiency …………………………………………. 5.4 Revenue and cash …………………………………………. 5.5 The regulatory environment …………………………………
19 19 19 19 20 20
6. Project participants and roles ………………………………… 6.1 About our Users …………………………………………. 6.2 Trading partnerships and product flows ………………..
21 21 25
7. Risk Analysis
……………………………………………………………
27
8. Expected benefits ………………………………………………….. 8.1 Benefit scenarios …………………………………………. 8.2 Determining the value …………………………………………. 8.3 Benefits in summary …………………………………………. 8.4 Quantifying the benefits ……………………………..
28 28 30 30
9. Costs & Implications ………………………………………………….. 9.1 Technology costs …………………………………………. 9.2 Installation and Operational costs ………………………… 9.3 Implications ………………………………………………….. 9.4 Cost summary …………………………………………………..
32 32 34 34 35
10. Summary – benefits versus costs
36
31
…………………………………
Appendix 1. AIDC & Traceability – Regulations and Policies by national and regional authorities 2. The Benefits Case – User perspectives 3. UK Department of Health Announcement for adoption of AIDC 4. “Coding for Success” policy document – in summary 5. AIDC & Traceability – Case Studies in healthcare 6. Press Report – New Zealand’s bar code initiative
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1. Introduction This document, The Business Case Report, is the third in the series of deliverables describing the BRIDGE WP6 project, generally referred to as The Pharma Traceability Pilot. This Business Case Report builds upon Deliverable 1, The Problem Analysis, and Deliverable 2, The Requirements Analysis, and aims to define the business case for automatic identification and data capture (AIDC), traceability and mass serialisation in the European pharmaceutical sector. With reference back to the Bridge project ‘Description of Work’ for WP6, deliverable 3, is defined as: “This task will define and develop the business case for traceability implementations, taking inputs from the Problem Analysis and Requirements Analysis reports (Tasks 1 and 2). The task will account for the likely costs of implementation for a traceability system, the perceived requirements for process change within and without the organisation and aim to identify the likely culture and business practice implications. These will be described against the backcloth of the benefits case, identifying the scenarios where benefits are potentially to be gained as well as any potential negatives.” The topics of AIDC, traceability and mass serialisation, and the business drivers for their adoption, have all been thoroughly described in the two previous deliverables and it is assumed here that the reader is familiar with them – we are not attempting to reproduce all these explanations in this document. Instead, whilst there will be some repetition here for reasons of completeness, this report will focus on the rationale for ‘doing it’, looking at industry trends and the primary drivers of value potentially available to supply chain participants. We wish at this stage to thank once again our Users – the nine companies involved in the project all of whom have given considerable time and input to this report and the project generally. Their cooperation, enthusiasm and support has been, without exception, immense which has not only made the project possible but demonstrates the significant positive business impact they each believe the project can make to the European Pharmaceutical sector.
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2. Executive Summary The Business Case for Automatic Identification and Data Capture (AIDC) is overwhelming, accepted now by many healthcare authorities and regulators around the world. Appendix 1 summarises this widespread adoption. The single most significant benefit of AIDC is increased patient safety - that is, reducing harm to patients by process automation reducing the risk of getting one of the ‘five rights’ of patient care wrong, instances of which happen far too frequently in error prone, manually driven care administration processes. Traceability through mass serialisation – that is, the unique identification of individual items e.g. the patient pack, is a sophisticated application of AIDC and considerably strengthens the business case for further risk reduction in patient care scenarios. The granularity of control of product movements in the care chain is dramatically increased by traceability systems as will be implemented in this pilot project. Medicines authentication, trading partner validation, expiry date based inventory management, item level recall capability are just some examples of how the quality of the supply chain can be improved, protecting against leakage and illegal product penetration as the threat of counterfeit medicines grows. The business case therefore is not the classic financially centric model, although there are considerable financial benefits – cost reduction, efficiency gains, additional revenue and cash generation (the extent dependent on the role of the supply chain participant) – as summarised in section 8 with further detail in Appendix 2. How can one put a value on a person’s life? How should saving patients’ lives be identified in the benefit to cost model? This report does not attempt to answer these questions but simply makes the case, supported by all of our nine pilot participants, that mass item level serialisation with full supply chain traceability makes for a safer, more secure care chain with the end result being that patient safety is improved – that means patients’ lives saved. Whilst this report suggests that other business drivers (described in section 8) are subservient to that of patient safety, it does mean to say that they are not significant. On the contrary - efficiency gains, revenue and cash generation and the ability to respond to regulatory changes are all identified as potentially highly significant benefits, dependent on the user role in the supply chain and the extent of integration into the business. Such are the number of variables involved in traceability system implementation that impact the benefits to cost case (and notwithstanding the patients’ lives valuation issue), it is not possible, at this stage, to precisely quantify the business model. Instead, what we have done is to indicate an extent of benefit anticipated by our user community against a range of business scenarios. To illustrate this, the table below has been extracted from section 8. Business Driver (Hard benefits to the business)
Manufacturer
Distributor
Transporter
Wholesaler
Pharmacy
* Patient safety
High
High
High
High
High
Efficiency
Generally Low
Medium high
Low
Generally high
Low medium
to
Revenue / Cash
Generally high
Medium
High
Medium
Low medium
to
Regulatory
Generally High
Medium
Low
Low to medium
Medium
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An objective for the next phase of the project, The Pilot Preparation report, will attempt to identify the key performance indicators for each user / business driver with a view to better quantify them. As for the benefits model, the cost model is highly variable dependent, among other things, on the philosophy of implementation adopted by the user. The key determinant is the level of integration of technology and process within the user’s business – generally we view the greater the extent of integration, the higher the costs but these are overtaken by the associated benefits. The model extracted from section 9 is repeated here to illustrate this point.
Benefit
High
Traceability data integration, inter and intra the business – new systems and processes Level of integration
Traceability data integration – existing processes
Cost
AIDC only, no Integration, use of Traceability system data only
Extent of benefit v cost
Low
High
Note: the above schematic is intended to be indicative only. Finally we again wish to thank our Users. It goes without saying we couldn’t manage without them but the key point for our Team is their levels of enthusiasm and support for our project. For us this illustrates, probably more so than our text can possibly describe, the potential benefits that they see for their individual businesses and the supply chain as a whole – but most of all, the patient.
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3. Background In order to set the ‘benefits case’ in context, we believe it is appropriate to reiterate some of the problem definition statements made in deliverable 1.
Medical error The known level of occurrence of adverse events across the world varies between 9% and 11.7%. Some of these lead to patient deaths, others are thankfully not so serious. However, they do result in extended hospital stays of between 5 and 8 days above the average bed occupancy level. It must be stressed that the known level is the very least extent of the problem as the figures are typically based on reporting by clinical staff - it is believed there is a degree of under-reporting due to administration issues and a natural fear of possible consequences. Some recent figures available from the UK National Patient Safety Agency cite the following estimates of adverse events as a percentage of acute admissions – the global nature of the problem is clear: • • • • • •
Australia New Zealand Japan England Denmark Canada
16.6% 12.9% 11% 10.8% 9% 7.5%
The Philadelphia Inquirer, 9/13/99, A Harvard Study in the New England Journal of Medicine, analysis of patients in New York, described the main reasons for adverse events as: • • • • •
•
Surgical errors Medication errors Diagnostic Therapeutic Procedure related Other
47.7% 19.4% 8.1% 7.5% 7.0% 10.3%.
Medication error Making mistakes in the administration of medicines – getting one of the ‘five rights’ (right patient, right medicine, right route, right dosage and right time) wrong - is all too common. In Europe, as in all countries, medication error, that is mistakes made in the prescribing, dispensing and administration of medicines to patients, causes thousands of patients’ deaths each year unnecessarily. Again the Philadelphia Inquirer, 9/13/99, A Harvard Study in the New England Journal of Medicine, analysis of patients in New York, described drug-related errors as: • • • • • • • • •
Over dose Under dose Allergic reaction Dosage form Wrong drug Duplicate therapy Wrong route Wrong patient Other
41.8% 16.5% 12.9% 11.6% 5% 5% 3.3% 0.4% 3.3 %
Additionally, in the UK: Whilst difficult to quantify precisely (as accurate records are not maintained), it is estimated that hundreds of patients in the UK die each year due to preventable medication error. For example, the National Patient Safety Agency (NPSA) suggests 50% of the estimated 72,000 annual deaths in the WP6 Business Case – D.3
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NHS due to adverse events (of all kinds) are caused by medication errors overall; and 34% of all medication errors that cause problems for patients are associated with drug administration (Bates et al): JAMA1998. 280 No.15 (21 October)). Many of the medication errors occur as a result of a lack of machine-readable codes, which significantly increases the risk of human visual identification errors (many packs are of similar name, size and appearance). Patient safety is a key issue for the UK Government. Authoritative reports such as ‘When Errors Happen’ (Bates et al) and recent UK reports such as ‘A Spoonful of Sugar’ (Audit Commission) and ‘Organisation with a Memory’ (Department of Health) have underlined the extent of medication errors. Causing harm to people in hospitals, where patients should be very safe, is just not acceptable. As A Spoonful of Sugar also identified, the knock on costs of a high patient risk environment leads to significant costs in additional hospital stays plus clinical negligence claims. Adverse events cost approximately £2 billion a year in additional hospital stays alone. The NHS pays out every year around £400 million in settlement of clinical negligence claims. Very recently the NPSA urged that hospitals in England do more to reduce the 40,000 medication errors per year of which 2,000, they say, “…..cause patients harm or severe harm or death….”, as in 36 cases. And in the US: • “To err is human” published by the US Institute of Medicine in 1999 reported that 98,000 people die annually in the US from medical errors, of which 7000 are due to medication errors. • 2% of admissions to 2 US hospitals experienced a preventable adverse drug event • ‘The cost of adverse events in hospitalised patients’ (1997) showed that medication errors increased length of stay by 4.6 days, costing $4600 per admission; based on a 700 bed hospital, this extra cost was $2.8m per year
Sub-standard medicines and outdated medication processes When quality problems are identified with medicines and related products (e.g. contaminated bloodrelated products), effective mechanisms are required to recall all related products entirely and speedily. Today’s manual systems do not allow medicines at the patient pack level to be traced throughout the supply chain – the whereabouts of products, and the patients treated by potentially faulty medicines, is simply not known. As a result, 100% effective and timely recalls are not possible and therefore the risk of medication error and thereby patient risk is considerably increased.
Supply Chain inefficiency The typical healthcare supply chain in Europe significantly lacks the exploitation of technology that forms the basis of more modern supply chains such as in the retail/FMCG, military, aerospace and automotive sectors. Here the use of AIDC technologies, network based systems and integrated application environments, amongst others, have all enabled profound transformation of re-engineered supply chains bringing improved logistics, reduced administrative costs, better utilisation of people, reduced capital tied up, lower inventory levels, reduced lead times and improved product quality. For pharma supply chains, there are many similarities of product and information flows compared to those of retail and other sectors. Accordingly, many of the benefits these sectors have witnessed are yet to be gained by pharma - there is much ‘low hanging fruit’ to be picked. For example: • • • • •
Scanning at the ‘back door’ by the wholesaler to automate the receipting process; Enabling automated data capture to support First In First Out (FIFO) stock management Efficient management of the product returns process Automated receipting at the hospital goods-in and integrating this process with the pharmacy administration / financials system – for improved invoice/order/receipt reconciliation processes Greater use of eMessaging techniques, based on EDI and XML, for faster, more-up-to-date order placement, advance notifications of deliveries and transport scheduling
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•
Bedside scanning at the point of administration would reduce patient risk as well as reduce staff time spent on manual recording.
Given the constant pandemic threats, the existence of accurate and visible supply chain information could rapidly identify the precise location and quantities of critical medicines required to tackle an outbreak.
Counterfeit medicines Most authorities agree that the risk of counterfeit medicines in the healthcare supply chains of Europe is growing. The World Health Organisation (WHO) estimates that 5-10% of world pharmaceuticals are counterfeit and as much as 25% in Third World markets. The International Narcotic Drug Organisation estimated in February 2007 that 10% of drugs globally were counterfeit. EFPIA (representing the European branded medicine manufacturers) are very concerned about the growth of counterfeit products damaging consumer trust of their members’ brands. The trade body has successfully lobbied the Council of Europe (and its anti-counterfeit committee) which is now developing a strong and vocal position on the threat of counterfeit and risk to European consumers. Other trade bodies and professional groups have a variety of positions – EGA (European generics manufacturers) have equal concerns but suggest counter measures focus on business practice rather than technology solutions. Stakeholders generally believe there is also a growing threat to the health of consumers and patients. There is widespread worry among health authorities that new strains of bird flu may emerge rapidly as a result of counterfeit (ineffective) medicines. In the United Kingdom, officials seized 5,000 packets of counterfeit Tamiflu in early 2006, estimated to be worth £500,000. At about the same time, the Dutch Healthcare Inspectorate warned consumers not to buy Tamiflu through the Internet, after counterfeit capsules were found in the Netherlands containing lactose and vitamin C, and no active substance. The WHO is getting actively involved to prevent counterfeiting from increasing the already dangerous risk of pandemic. And in mid 2006 a counterfeit batch of a critical branded drug was discovered in the UK market. In addition to these challenges, there are also concerns that counterfeit drugs with a reduced active ingredient (rather than no active ingredient) could lead to existing viruses developing a resistance or new strains to develop unchecked. While patient safety is priority one and will be the focus of mandates and regulations, there are clearly staggering economic risks to pharmaceutical companies with counterfeiting potentially costing the industry up to $30 billion annually. The impact includes sales lost to the “grey market” and to parallel trading; increased cost of goods sold and reduced returns on huge investments in development. The problem is returning to markets once thought to be safe. For instance, the UK went 10+ years without a significant counterfeiting event, but then experienced four in the space of one year. Further, the problem is likely to worsen before it improves. Sales of counterfeit drugs are projected to reach $75 billion in 2010, up 92% from 2005. "The business of selling fake prescription drugs to unsuspecting consumers is burgeoning, and is a global industry," said Peter Pitts, Director of the Center for Medicines in the Public Interest (CMPI). "Nearly $39 billion, or 11 percent of global pharmaceutical commerce, will be counterfeit this year. By 2010, the number will nearly double." In addition the profits from these activities could be used to fund other illegal operations. In an industry that relies upon the integrity of its brand, to ‘do nothing’ is not an option. The potential liability exposure is huge - given that pharmaceutical manufacturers and suppliers can be held responsible for all actions of all of its partners, the impact of this could be catastrophic. Under current supply chain processes, visibility and control are often lost as drugs move from node to node. Though many manufacturers require pre-wholesalers to record the numbers of the batches they receive, there is little or no tracking from wholesaler to pharmacy or pharmacy to patient. Product diversion (and the resulting undersupply of drugs in some markets), safety concerns from poor repackaging, management of product authorisation (PA) coding, uncertainty about cold chain integrity, lack of forecasting insight and overall lack of supply chain transparency are other related business issues. WP6 Business Case – D.3
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But solving the problem is not easy. The counterfeit organisations are highly sophisticated in their approach. The counterfeit product’s ‘look and feel’ is often almost identical (if not better) than the original so straight forward visual checks are not enough. The industry accepts and promotes parallel trading, which makes the original source of the drug almost impossible to identify and when considering the huge volumes of drugs that are handled every day, it is not practical to check all drugs given the current processes and identification of medicines today. Customs Authorities across the world are powerless to prevent the cross border movements of counterfeit medicines and only the availability of the track and trace type of solutions will change this situation. With no formal legislation, standards or guidance then there is no readily available method and/or service to tackle this issue. Without this capability within the pharmaceutical supply chain the counterfeit market is set to grow significantly. Another threat is the burgeoning growth of internet pharmacy sites which invariably retail counterfeit products.
Counterfeit regulations To date, there is no global or pan European legislation/standard in place to address the challenge of counterfeit drugs. The pharmaceutical industry might look to EU legislation on food tracking and tracing (EU directive 178/2002), which came into effect in 2005. That legislation required “farm to fork” traceability, though not complete pedigrees for each product. Legislation in the US bears watching because it may also offer instructive lessons and because European pharmas producing drugs for these markets must comply. For now, the action has been at the state level. Three US states have passed prescription drug pedigree laws. They are Florida and California, which have the largest prescription volumes, and Nevada. Another 15 states are working on legislation. Most US regulations focus on drug pedigrees that would provide players in the supply chain with detailed chain of custody records for drugs, from manufacturing to the point of dispensing. Florida was the first state to enact specific drug pedigree legislation. Initially, it specified pedigrees – though not necessarily electronic pedigrees – for the 34 top-selling drugs. For now, the Florida regulation applies only to pharmaceutical wholesalers and distributors, though it’s expected that manufacturers, pharmacies, hospitals, doctors, and others will soon be required to collect, store, and certify accurate pedigrees on the drugs they sell and dispense. California is expected to require electronic pedigree tracking for all drugs sold in the state effective January 1, 2009. At the federal level, several legislators in the US House of Representatives have introduced a bill to mandate use of RFID technology for at-risk pharmaceuticals by the end of 2007. And the US Food & Drug Administration (FDA) has very recently announced enforcement of the pedigree requirements from its Prescription Drug Marketing Act (PDMA) – as recommended by the FDA Drug Safety Task Force Report 2006. There is a sense of inevitability in the US, as in Europe, that more legislation is on the way. While pharma stakeholders recognise the importance of industry guidelines and are confident about meeting them, significant questions remain. For instance, clarity is required about the data standards that will be used in the first instance for Data Matrix at each packaging level. In Europe, regulators are stepping in to address the shortfalls. Many believe batch traceability, currently required in Spain, will soon become a legal requirement across Europe. In Spain, medication labels include data on the “denomination of the active ingredient, the authorisation owner, administration method, contained quantity, lot number, expiration date, precautions for conservation, dispensing conditions.” Additionally, each package includes both the lot and unit number to “allow for individual identification by mechanical, electronic and computer means.” Further, “Wholesalers and pharmaceutical laboratories are obliged to guarantee the maintenance of the cold chain.” Public administration agencies are focused on “supporting the creation of its own medicament and health product information centres, through promotion and coordination on the utilisation of resources and information technologies that allow professional health institutions and other entities to access information on such products.” Italy, Belgium and Portugal have tried to develop national solutions which are neither practical nor cost effective in a trans-national supply chain like the pharma sector. In November 2005 EFPIA (European Federation of Pharmaceutical Industries and Associations) recommended that its members (manufacturers) adopt the use of machine-readable, 2-D Data Matrix codes containing manufacturer name, product name, batch number and expiry date, and enabling the use of random serial numbers to provide product traceability. This is viewed as a significant steppingWP6 Business Case – D.3
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stone to achieving supply chain security in a commercially viable way. Assuming the appropriate network and database linkages can be made, the implementation of these recommendations will allow authentication at point of dispensing and thereby address the number one industry requirement of ensuring consumer/patient safety. While RFID is seen as a potential mid-term to long-term technology solution, EFPIA recommended Data Matrix as the pragmatic short-term solution because the technology is not yet ready and current implementation costs are high.
The role of AIDC and Traceability systems Deliverables 1 and 2 clearly describe the relative roles of AIDC and the traceability it enables as fundamental to improved patient safety through reduction of medication errors and counterfeit drug combatance. Further significant opportunities are also described when AIDC and traceability systems are applied to the external supply chain – for efficiency gains, revenue and cash improvements and compliance to the regulatory environment. The acceptance of the benefits of AIDC and Traceability by healthcare authorities around the world is gaining momentum - this is reflected in the sector trends described in the following section and the adoption table as detailed in Appendix 1.
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4. The European Healthcare Sector Trends 4.1 AIDC in Healthcare •
The acceptance of the benefits of AIDC to the healthcare sector, particularly for pharmaceutical products for patient safety improvements, is a global phenomena and one that is growing in momentum. Twenty-six different countries / regions (see Appendix 1) either mandate or recommend the use of bar codes for medicine / medical device identification, generally promoting the use of GS1 standards.
•
The most recent policy announcement to this effect, and most relevant to this pilot and the European sector was in the UK as recently as 16th February 2007 when Lord Hunt of Kings Heath, Minister of State for Quality at the Department of Health, launched a policy document issuing guidance for the use of auto-identification and data capture technologies such as bar codes across the NHS. The intention is to deploy auto identification numbers and associated bar codes at the heart of the NHS Connecting for Health programme for NHS-wide applications including the Electronic Health Record in England. It is hoped that Scotland, Wales and Northern Ireland will follow. The objectives for the Ministry are clearly expressed in the policy tag line ‘“Scan and Save” policy to save lives and money’. Significantly, the policy document specifically referred to this project as being “very relevant” to the new UK policy. See also Appendix 3 and 4.
•
In New Zealand in early February of this year, the government launched a Quality Improvement Committee with aims to reduce adverse events in hospitals estimated to cost hundreds of millions of dollars a year and improve the quality of healthcare generally. The initiative is founded on AIDC and bar code technologies. See also Appendix 5.
4.2 Traceability in Healthcare •
As we have described in the above section, the adoption of AIDC is a fast developing trend in the European (and global) healthcare sector, the principle rationale being one of product or item identification e.g. a particular medicine or medical device. AIDC is the basic building block upon which other applications can develop.
•
Traceability is a more sophisticated application of the use of bar codes. Traceability systems are founded on the capture of item identifiers (i.e. AIDC) and logging the event together with associated data – for example, the date and time of the capture of the data, the originator as well as other relevant information dependent on the application.
•
Formal Authority regulations and policies for traceability systems adoption are not as advanced as those for AIDC but they are certainly emerging – and the expectations are by market players that this emergent trend will gather pace over the next year or so. As was discussed in Deliverable 1, The Problem Analysis, electronic pedigree law is being adopted now by several US States, such as Nevada, Florida and most recently California. Electronic pedigree is a sophisticated and very specific application of a Traceability system describing in electronic form the certificated provenance of a medicine as it travels down the supply chain from one party to another. Currently it is relevant only to a handful of States and only for medicines but the expectations are that this community of use will grow quickly.
•
The FDA is well aware of the patient safety benefits of Traceability systems and in particular the opportunity of counterfeit drug combatance. As long ago as October 2003, FDA issued an interim report by its Counterfeit Drug Task Force which advocated the use of track and trace technologies as part of a package of measures recommended to de-risk the counterfeit threat. The growth of electronic pedigree regulations by various States stemmed from this report. The 2006 report by the same group strengthened its advocacy for electronic pedigree implementation, thoroughly encouraging the user community to take responsibility for systems implementation.
•
Again as discussed in Deliverable 1 the primary driver for electronic pedigree regulation is as an anti-counterfeit measure where supply chain security can be assured by authentication of
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the supplying party and the product supplied. The threat of increased volumes of counterfeit products is perceived as a growing and imminent danger on a global scale. Whilst only a small number of incidents have been detected in Europe – three in the UK in the last two years – such notable bodies as The Council of Europe and EFPIA (European Federation of Pharmaceutical Industries and Associations) are becoming increasingly worried about the increased risk to patients and potential damage to the reputation of branded medicines and trust by the consumer. •
(1)
Accordingly in December 2005, EFPIA recommended to its members (large pharma companies and national trade bodies) the adoption of a standard medicines identification system, Europe wide, based upon the data matrix “dot code”, importantly defining that not only the product code be encoded but also a (randomly generated) serial number that would enable traceability of a unique instance of a product item e.g. patient pack. Additional mandatory data elements are batch number and expiry date to allow ‘offline’ advantages that would otherwise require a potentially significant amount of network and IT infrastructure to realise – such as stock turns and batch/expiry checks. The data matrix code is capable of carrying all this data. (1)
(EFPIA position paper entitled Identification and Coding of Pharmaceutical Products in Europe, dated November 2006). Available at http://www.efpia.org/Objects/2/Files/codingRIFD0906.pdf
•
Pfizer, the largest medicines manufacturer globally, announced in December 2006 that it intended to adopt a single channel to market strategy (using Alliance/Unichem services) in order to enhance supply chain security in the face of the increasing counterfeit threat. The roll out of the new systems will commence in March 2007 in the UK and is then expected to be widened to mainland Europe. Traceability and mass serialisation (in line with the EFPIA recommendations) are at the heart of this new strategy.
•
For animal health, IFAH (International Federation of Animal Health) is currently rolling out globally a traceability initiative for animal medicines also based upon the data matrix code encoding product and batch numbers with expiry dates.
4.3 Technology Trends The choice of data carrier is vast, however the key issues that need to be addressed when considering the topic of mass-serialisation (UID’s) are: • • • •
• •
Data Carrier payload capability (can all the data we want be represented within the carrier) Physical size (we need to ensure that the carrier can physically fit on the product items) Carrier robustness (there’s little point encoding a quantity of data into a carrier that is too fragile or that requires complex and expensive reading/writing technology to take advantage) The quantity of packages received/shipped/handled by supply chain partners and the level to which each package needs to be positively scanned. For example, unit item scanning may be unnecessary if the case/pallet in which they are packed is sufficiently well sealed to prevent/detect tampering The cost of scanning equipment and carrier application. Whether this represents a significant cost burden will largely depend on the benefit derived. Industry trends and adoption profile.
Thus, the choices made for use within this project have needed to take all of the above into consideration to ensure that the results eventually presented are both realistic from a technological perspective and also realistic from a user adoption perspective. There are, however a number of considerations to be accounted for which are discussed in brief within the RFID section below. Pictorially the realistic choices of code carriers and symbology can be summarised thus:
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PRINTED OPTION
PACKAGING OPTION
Item
Unit Dose
Case
Pallet
RFID OPTION
Not to scale The selections made for this project are outlined in red. Note, the graphical representation of tag inlays are not intended to show a use of a specific tag technology – they are simply symbolic (HF and farfield UHF shown – many other varieties exist)
Symbology Many of the code symbologies in general use today are inappropriate for use with UID systems. The most common POS (Point Of Sale) codes, such EAN8, EAN13 and UPC etc. cannot handle UID numbering schemes as the data structures within the codes only allow for the encoding of the organisational and product related information. There is no mechanism to encode a unique element such as a serial number. This reduces the available code symbology list considerably. Most of the available 2D codes are open for use as are the so-called composite codes, such as RSS (now known as GS1 DataBar) and PDF417. In the linear codes the GS1-128 (formerly EAN.UCC-128) is available. Taking a look therefore at the symbology types that can be used technically we can further reduce the list. A GS1-128 is essentially impractical at the item level due to its physical size. However it can be adopted, and indeed is today, at the case and pallet level. The GS1-128 symbology is used today at these higher orders of packing level to encode an SSCC which already contains a unique serialised element and assists with pallet tracking operations. The RSS code (now known as GS1 DataBar), while able to encode the data required at all packing levels has, due to its very nature (size and high data content), restrictions of high-speed print capability with high quality read rates when used for the very small packaging levels such as those for item level use in the pharma industry. The same can be said of PDF417, which is an excellent symbology for the larger items, however when printed at a size suitable for application to a patient pack or even a single blister pocket, the code becomes less robust in terms of ease of decode and ease of originating print. Of the 2D symbology types, the one that stands out is the Data Matrix. This code stands out for four main reasons: 1. Because of its GS1 adoption 2. It can be reliably printed and decoded at very small sizes (it is highly robust) 3. It has very good levels of error correction (when used in ECC200 mode, which is the mode supported by GS1) and thus is able to withstand a large degree of code damage before successful decoding becomes impossible 4. It has been adopted by EFPIA as their item level code symbology of choice (in part for the reasons we have cited above) as well as the International Federation for Animal Health (IFAH) for the marking of its members’ packaging items.
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For the above reasons, this project will adopt the Data Matrix code at the item level. In order to provide the maximum flexibility, we will also use the code at the case and pallet level alongside that of RFID to allow for comparisons in the code effectiveness vis a vis RFID. Note that we shall, where possible in terms of practicable facility and resource availability, aim to automate the reading of the RFID tags by the deployment of portals in certain storage locations.
RFID The RFID world is currently experiencing a number of technological innovations. While EPCglobal has facilitated with its members the GEN2 standards for the UHF tag infrastructure (and is now developing standards for HF, Active and Semi-passive tags), there are innovations using either socalled near-field UHF tags which typically have a single loop antenna or a development using the principles of plasmonics where the UHF electromagnetic radiation is focussed into a strong field near to the tag antenna itself and is also able to be tailored to allow specific read/write ranges to be designed – both near-field and far-field. However, there are also a number of potential competing technologies being tried. One example, perhaps being developed for different purposes than those defined for GEN2 at the outset of its initial development phase, being RuBee which is behind the generation of a new standard, IEEE 1902.1. Whilst we understand that RuBee is an entirely different technology, we are citing it here as an example of just one of a number of RFID implementations. It is not aimed at replacing the GEN2 standard but is aimed at the specific area of item level tagging where it may have advantages over the GEN2 standard. Although this effort has significant backing from both the retail side—including the U.S.'s Best Buy, U.K.-based Tesco, Paris-based CarreFour and Germany's Metro Group— and the technology vendors including Hewlett-Packard, Intel, IBM, Sony, Panasonic, Motorola and NCR, the technology remains too immature for inclusion within this project. Accordingly, for this project, we will be adopting the EPCglobal UHF Class 1 Gen2 standard at case and pallet level and leave our options open regarding the inclusion of item level RFID tagging if resource availability allows us to extend the scope of the project to include this.
Data items When used in conjunction with an RFID device, the data contained within the device will be an EPC number – one of SGTIN, SSCC or GLN. When used in conjunction with a Data Matrix code, the SGTIN, SSCC will be supplemented by the inclusion of the appropriate batch and expiry information. This information has been included within the code following both requests from our project (1) stakeholders and in light of the announcement by EFPIA . In this document EFPIA state “From all possible technologies, RFID is one that could better respond to the needs identified by the industry, while offering also some flexibility to adapt to future developments and needs. However, experience within the pharmaceutical industry (pilot projects) and other sectors show that the technology is not mature enough and is not able to meet all expectations of the industry at this time. According to experts, it may not be fully available for at least another 10 years. Furthermore, the high costs associated with this technology make it difficult for it to be implemented by all stakeholders”. The document goes on to state “…EFPIA therefore recommends a 2D (2 Dimension Data Matrix) Bar Code system to be introduced across Europe.” Inclusion of this information allows product to be checked for batch and expiry in an off-line mode thus providing advantages for stock control in the absence of or indeed before adoption of a wider EPCglobal style network infrastructure. (1)
(EFPIA position paper entitled Identification and Coding of Pharmaceutical Products in Europe, dated November 2006). Available at http://www.efpia.org/Objects/2/Files/codingRIFD0906.pdf
Electronic Product Code and EPCglobal EPCglobal, a division of GS1, a neutral, consensus-based, not-for-profit global standards organisation, the mission of which is to promote and provide global open standards for cross industry implementation on a global scale. EPCglobal is the organisation entrusted by industry to establish and support the elements of the EPCglobal Network as the global standard for real-time, automatic identification, collection and exchange of information in supply and process chains.
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EPCglobal is run by industry for industry and is therefore determined that the technology is driven for business benefit. The EPCglobal mission is to make organisations more efficient by enabling true visibility of information about items in the supply and process chain. In order to provide a complete open system, four elements are required; an unique code to identify the object, a carrier to carry the code, a network to exchange information about the object identified by the code and open standards throughout the application to enable organisations to openly use the application and network without the requirement to pay IP related license fees or be subjected to vendor ‘tie-in’. EPCglobal uniquely provides standards throughout all four requirements via; • •
•
•
the EPC (Electronic Product Code), a serialised unique identifier which uniquely identifies an individual object precisely defined EPC data structures based on the GS1 key identifiers to enable the EPC to be coded onto the data carrier, whether that carrier be a barcode, RFID or other carrier formats the EPCglobal Network which enables the immediate, automatic retrieval of accurate, trusted information regarding the individual object uniquely identified by the EPC, irrelevant of wherever that data is held globally, and provided one has the right to access the data; EPCglobal open standards providing global open standards throughout the application and technology stack, to enable organisations to openly share data.
The EPCglobal Network therefore uses a combination of the EPC, globally accepted data carriers (e.g. barcodes, RFID etc.) and current information systems (e.g. the internet), in conformance with open standards, to allow trading partners to securely share data globally and openly, for real-time, automatic identification, collection and exchange of information in supply and process chains. Note: for the purposes of the pilot, we are using a VeriSign implementation of EPCglobal Network facilities, including Discovery Service, local ONS and EPCIS.
Summary The technologies adopted for this pilot reflect in full the developing trends of the European pharmaceutical sector: • • • • •
the Data Matrix symbology as recommended by EFPIA, IFAH and GIRP; use of linear bar codes such as the SSCC for logistics unit identification; deployment of RFID in line with the objectives of BRIDGE with the added value of gaining comparative data vis a vis other traditional data carriers; at the data item level the use of the SGTIN for mass serialisation and support of the UIDs and including batch number and expiry date information use of the Electronic Product Code and the EPCglobal standards where they apply to this project.
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5. Key Business Drivers These have been discussed in earlier deliverables but are summarised here for completeness.
5.1 Patient safety Improving patient safety - reducing harm to patients through mis-matching of the patient to the care he/she should receive; reducing the frequency and volume of adverse events; simply saving peoples’ lives - is the most important business driver for all healthcare stakeholders and one they can all buy into regardless of their respective functions in the supply chain. As we have already discussed both in this document and deliverable 1, The Problem Analysis, the numbers of patients who are harmed and who die through errors, for example in the administration of medicines (getting one of the five rights wrong), is just not acceptable. Several authoritative and respected reports such as “To Err is Human” (USA) and “Spoonful of Sugar” (UK) describe these numbers in the thousands, and even tens of thousands, annually. As we have discussed, it is generally accepted that the application of AIDC and traceability systems has a direct and positive impact in reducing adverse events, and as a consequence, saving peoples’ lives. Note the title of the recent UK Department of Health press release announcing its bar code policy – Scan and Save, policy to save lives and money. See Appendix. Traceability is a broader application of AIDC and the opportunities it offers are extended considerably by the inclusion in the automation process of data elements such as batch number, expiry date and even a unique serial number – mass serialisation - as well as the product code, as is the case with this project. By so doing, the granularity of traceability is increased considerably enabling control and visibility at the item level (e.g. patient pack) bringing further benefits. For example, recording the administration of a specific patient pack to the patient’s health record; enabling a total recall of all items in a batch; or validating the authenticity of a prescribed medicine.
5.2 Counterfeit combatance Whilst the incidents of counterfeit products in the European pharmaceutical market is currently very small, the counterfeit issue is generally accepted to be a growing and imminent threat to the sector as a whole for both generic as well as branded medicines. Mass serialisation and the total supply chain traceability and visibility it offers are a key driver for change – reference the Pfizer strategy described in the previous section. For the purposes of this report we see the counterfeit issue and the risk it imposes as one which exacerbates patient safety and have therefore included this driver of change – as it surely is - within the broader patient safety context.
5.3 Increased efficiency Efficiency improvements through automation enabled by AIDC and traceability systems are vitally important to all stakeholders in the supply chain, from the manufacturer to the hospital. Working smarter and taking costs out of the business are particularly important to the generics companies which are ‘high volume, low margin’ operations. AIDC and Traceability systems have been highly successfully deployed in other sectors such as Fast Moving Consumer Goods, Automotive and Retail with significant efficiency benefits accruing, not least by the removal of time consuming, error-prone manual processes and the paperwork that typically supports them. Cost reductions with leaner, yet more flexible supply chains, offering improved product quality to the consumer, have been the result. It is fully accepted in these innovative sectors that AIDC and traceability are fundamental to these new ways of working. All these opportunities for efficiency gains are available to the pharmaceutical sector – many of them being ‘low hanging fruit’.
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5.4 Revenue & cash (Sales and Marketing) The additional security, accuracy and certainty introduced by the implementation of traceability systems can bring significant sales and marketing advantages resulting in additional revenue and cash. Consumer trust in the product – for branded and generic medicines – and the knowledge that the product is what the patient thinks it is, is of paramount importance. Lack of trust resulting from, say, an incursion of a counterfeit incident can have a dramatic impact on sales and the associated reputation of the brand owner. For the generics market, where the key differentiator is product cost, traceability system implementation, and the market perception of the associated benefits, is seen as an important addition to the marketer’s armoury. One of our users told us, for example, this opportunity was the single most important reason for the company’s involvement in the pilot. “Innovation by the first market mover can attract early additional sales and even when the playing field levels with ‘mass adoption’ some of those sales will surely stick.” For the service providers in the chain – surely that includes most users – service level performance is a key business indicator. OTIF – on time in full – and with it demands for 99.9++% performance will increasingly set the trend. Again it will be the innovators, those that take the high ground and adopt new technologies supporting new ways of doing business, that will be the winners. Reverse logistics and dealing with returns is a real issue for all parties in the chain. Large numbers of credits – for both returns for damaged and unwanted goods, as well as ‘lost’ goods, have a significant negative impact on revenue. Traceability of the forward and forward logistics processes will help reduce the returns themselves and the arguments and debates that are part of the administrative overheads needed to resolving the issues.
5.5 The Regulatory Environment The ability to undertake a product recall in an entire and efficient manner is the most important regulatory requirement impacted by traceability systems. In fact, we know of case studies where the sole reason for implementation has been driven by a requirement for ‘total, entire and speedy’ recall (Haemophilia treatment drugs in Ireland). Generally licence owners will have efficient recall procedures in place enabling batch traceability to its customer downstream e.g. the wholesaler, but from that point traceability within the batch typically breaks down. In the event of a recall, today’s recall systems will not be able to determine whether or not the entire batch has been recalled or even where all medicines within that batch are located. The traceability model implemented in this pilot overcomes the weaknesses of current systems. By the unique identification and associated traceability of products at all levels of packaging, the location of all products can be assured enabling a total recall, in a fast, efficient, entire manner. It is anticipated that the current regulatory environment for medicines will change in the foreseeable future to incorporate more stringent supply chain control perhaps driven by the growing threat of counterfeit medicines. We envisage the adopters of traceability systems will be well placed to implement these new regulations.
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6. Project Participants and Roles We are very fortunate to be working with a highly enthusiastic community of Users who are freely giving of their time and energy to work with the implementation Team on this project. The companies involved are all highly active undertaking their day-to-day business operations and their representatives with whom we interface are very busy people. Their ability and willingness to accommodate our project requirements within their current work schedules undoubtedly reflects the perception of the business relevance of this Pharma Traceability Pilot to each company. There are nine companies that constitute the user community for this project. responsibilities are discussed below.
Their roles and
6.1 About our Users 6.1.1 Manufacturers Actavis The Actavis Group is one of the world’s leading players in the development, manufacture and sale of high-quality generic pharmaceuticals. Actavis’ recent acquisitions have positioned the Group among the world’s five largest companies in the industry. Founded in 1956, the Group has 10,000 employees operating in over 30 countries around the globe. Its headquarters are in Iceland. In 2006, Actavis purchased the Alphama business effectively creating its UK operations, based in Barnstable in Devon. Here it has eleven manufacturing lines, producing 780 product lines across 2500 to 3000 SKUs. Actavis are manufacturing five products for the pilot.
Athlone Laboratories Athlone Laboratories is one of the leading manufacturers and suppliers of oral beta - lactam antibiotics in Western Europe. From its headquarters in the heart of Ireland, Athlone Laboratories manufacturing operation supplies an ever increasing number of companies throughout Europe including Ireland, France, Holland, Portugal, Belgium, Sweden and Germany. Athlone is also the major supplier of penicillins to the United Kingdom as well as supplying markets as far away as Hong Kong, New Zealand and South America to name but a few. Athlone Laboratories has enjoyed manufacturing antibiotics since 1974. Its success is founded on three key corporate principles: 1. Absolute quality of product 2. Dedicated customer service 3. A priority to focus its expertise on what it does best. Since the company only manufactures antibiotics it is very single minded about its business. With continued investment in manufacturing plant and equipment as well as investment in people, the company continues to grow at a pace. Athlone Laboratories are manufacturing eleven product lines for the pilot.
Sandoz Sandoz, a Novartis company, is a world leading generics pharmaceuticals company. The company develops, manufactures and markets off-patent medicines, as well as pharmaceutical and biotechnological active ingredients.
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Sandoz, with its strong technology base, particularly in the application of “difficult-to-make” generic products (transdermal patches, inhalation products, sustained-release implants and multi-particulate drug-delivery dosage forms), is poised to be a leader in all aspects of generic pharmaceuticals, including biopharmaceuticals and anti-infectives. This reinforces the Sandoz Vision to go beyond traditional generic products and bring innovative technologies and delivery systems to market, making a world of difference in generics. The company is competitive with its leading presence in key markets, including the US and Germany, and a comprehensive product portfolio of more than 840 compounds in more than 5,000 dosage forms. Its global network, registration and development strengths support the aim of Sandoz to achieve significant product approvals annually throughout the global organization. This is exhibited by a launch of more than 300 new products in 2006. It also supports the Sandoz Vision of being the main provider of high quality, affordable medicines helping secure long-term access to healthcare for people around the world.
Sandoz reported generic pharmaceutical sales in 2006 as USD 5.9 billion and employs more than 21,000 associates in 110 countries. Sandoz global headquarters is based in Holzkirchen, Germany, located just south of Munich. Generic pharmaceuticals are the bioequivalent of an innovative, brand name product. This includes dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Generics are held to the same strict standards as the innovator product, dictated by the FDA and other regulatory agencies throughout the world. Although generic pharmaceuticals are chemically identical to their branded counterparts, they traditionally cost consumers less than the brand product. The finished dosage forms are sold to wholesalers, pharmacies, hospitals and other healthcare outlets. Its Anti-Infectives unit manufactures active pharmaceutical ingredients and their intermediates for internal requirements and industrial partners. Sandoz are manufacturing five products for the pilot.
6.1.2 Contract Packaging As the name suggests, this is the packaging component of the manufacturing process which can of course be out-sourced.
Tjoapack Tjoapack B.V., founded in 1989 by Eric Tjoa, was the first company on the Dutch market to supply Unit Dose Packaging (UDPs) with bar coding. Since then, Tjoapack has grown into a contract packager of solid oral drugs with expertise in a broad area. Tjoapack’s ambition is to grow and to play a bigger role in the European market. Besides that its mission is to help shape the pharmaceutical supply chain of the future in which Tjoapack believes packaging plays a central role. With the take-over of its competitor ‘Sudaco Pack’, Tjoapack strengthens its market position and is able to offer a wider range of products. Tjoapack works for both suppliers of proprietary medicinal products and generic medicines and for (pharmaceutical) wholesalers in the Netherlands as well as abroad. Specialisms Tjoapack is not just a contract packager. It offers more than packaging alone, including the entire package from packaging up to and including dispatch, provided with consultancy and support. It specialises in: 1. packaging of Unit Dose Packaging (UDP)
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2. packaging in blister packs; 3. Secondary Packaging; and 4. Clinical Trials. Tjoapack is providing contract packaging services for both Actavis and Sandoz. One each of Actavis and Sandoz products will be shipped in bulk to Tjoapack for packaging and inline coding (data matrix codes and RFID tags) – all other products from these two manufacturers will be shipped to Tjoapack as finished SKUs for inline coding only.
6.1.3 Storage, Distribution and Transport Actavis In addition to the manufacturing capability already described, Actavis provides full warehousing and storage services for its own products in Barnstaple. As such, Actavis will also be adopting the role of a distributor for the pilot.
CPG Logistics Established in 1991, CPG Logistics is a privately owned company that has achieved remarkable growth, continually investing in areas that have been critical to its success. The company recognises that effective supply chain event management is a pre-requisite for business success in today's markets, and is confident that its unique approach to logistics solutions will maintain its lead. The 2004 European Supply Chain Excellence Awards recognised its competitive edge, which larger rivals are struggling to catch up. With ISIS, its web order management system and the development of business intelligence reporting tools it is continually broadening the scope of its business and contributing to the success of its customers. CPG Logistics is part of CPG Holdings Ltd. The group also includes Pharmisis, leaders in field force support for the pharmaceutical industry and Medisis, the online service delivering medicines information and samples to healthcare professionals, patients and carers CPG Logistics is adopting the role of a 3PL pre-wholesaler for the pilot.
Healthcare Logistics Healthcare Logistics is a leading pharmaceutical pre-wholesaler in the UK and is the UK subsidiary of Movianto Group, Europe's specialist pharmaceutical & healthcare logistics service provider. It provides total logistics solutions for the Pharmaceutical and Healthcare Industries. Warehouses and Transport depots are approved by the MHRA, and accredited with the ISO 9001:2000 standard. It has sophisticated IT Systems to manage transport, warehouse and sales order processing and routinely manages CD, Chilled and Frozen products. The company is the only healthcare logistics company that delivers to every hospital and every wholesaler on a next day basis with their own vehicle and it also has chilled and frozen distribution capability. In addition it delivers to Nursing Homes, Dispensing GPs, Retail Pharmacists and Patients in their homes. Healthcare Logistics is adopting the role of transporter for the pilot.
6.1.4 Wholesalers
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Kent Pharmaceuticals Kent Pharmaceuticals Limited (KPL) has grown steadily in the 18 years that it has been trading. Established in 1986 by founder members Denis O'Neill and Michael Overy, as a supplier of generics to pharmacy, today the business incorporates an extensive range of generic, imported ethical and primary care products to a client base that now includes NHS Trusts and Hospitals, Retail Pharmacy and Dispensing Doctors as well as the M.O.D., Dentists and veterinary surgeries. A privately owned company, to date the KPL Group employs over 250 staff with half based at its headquarters in Ashford, Kent. Three other depots are strategically located throughout the UK at Cumbernauld, Durham and Barton to ensure same day and next day deliveries nationwide. These depots are supported by a national sales team and telesales team at the office headquarters. Expansion began in 1989 with the launch of the Early Bird pregnancy test kits. This secured a place in the lucrative OTC market. Not content to act simply as a supplier, in 1992 KPL purchased Athlone Laboratories Ltd. based in Ireland. This provided a manufacturing facility and today allows the production and supply of a range of penicillin based products such as Amoxicillin, Ampicillin, Flucloxacillin and Penicillin tablets, capsules, sachets and syrups for the domestic market as well as a number of export markets. 2002 saw the launch of 'Kent Connect', the electronic ordering and information system giving customers unlimited access to KPL's product and price list, promotions, purchase history and up to the minute out of stock information. And of course the facility to order at their convenience! In the autumn of 2003 KPL opened a new 20,000 sq.ft dedicated distribution facility in Kent designed to service its growing account base and NHS contracts. Kent Pharmaceuticals is a founder member of the British Association of Generic Distributors (B.A.G.D.). Their primary interest is to promote, represent, protect, assist, develop and advance the trade, commerce and industry of distributors of Generic Pharmaceuticals in the United Kingdom. In 2003 Kent Pharmaceuticals also became a member of the British Generics Manufacturers Association. Whilst we would describe Kent Pharmaceuticals as a short-line wholesaler, its role in the pilot is one of a distributor.
Unichem Part of the Alliance Boots Group, UniChem Ltd is a leading distributor and wholesaler of pharmaceutical, medical and healthcare products in the UK. It offers a high level of service, with twice daily delivery and provides a full complement of added value services to pharmacies, including innovative marketing support; commercial support services and ethical compliance and data services. UniChem supplies a wide range of pharmacies, including independent community pharmacies, supermarkets, hospitals and prisons. The UniChem division is made up of five businesses: • UniChem - wholesaling of medicines and OTC's to retail and hospital pharmacies. • UniChem Professional Services - delivering patient care through community pharmacy • UDG - (associate company) - pre-wholesaling services for healthcare manufacturers. • UniChem Hospital Pharma - wholesaling of medical and surgical consumables to hospitals. • OTC Direct - specialist wholesaler of Generics and UK Surgicals. All products in the pilot will be delivered to the end customer (Barts hospital pharmacy) via Unichem acting as a wholesale operation.
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Barts and The London NHS Trust Barts and The London is one of Britain’s top teaching hospital trusts. Its mission is literally to bring excellence to life – to give patients the best possible care so that they can live better, fuller, longer lives. Every year the hospital cares for over 500,000 people from the City, east London and beyond – communities with a rich ethnic, religious and cultural diversity; from the affluent finance and business centres of the City and Docklands, to the vibrant Bangladeshi community in and around London’s Brick Lane. The Trust is made up of the following leading teaching hospitals: • • •
The Royal London Hospital in Whitechapel St Bartholomew's Hospital (Barts) in the City of London The London Chest Hospital in Bethnal Green.
Pharmacy at Barts services £34m worth of drugs p.a. (of the total for the Trust’s £48m drugs spend), handling 2500 to 3000 product lines at any one time.
6.2 Trading Partnerships and Product Flows In summary, the trading partnerships of each User can be schematically illustrated as:
Manufacturer to storage, distribution and transport on to the wholesaler Supply chain 1.
Actavis
Tjoapack
via Healthcare Logistics
Actavis
Unichem
Supply chain 2.
Athlone Laboratories
Kent Pharmaceuticals
via Healthcare Logistics
Unichem
Supply chain 3.
Sandoz
Tjoapack
Unichem
CPG Logistics
Wholesaler to the Pharmacy
Unichem
Barts and The London NHS Trust
Note:
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Traceability to be implemented in the pilot for each supply chain will be external inter-trading partner traceability only and will not attempt to trace product flows within a user organisation.
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7. Risk Analysis (Traceability systems) User participation It goes without saying that full supply chain traceability for a product line(s) requires all user participants involved in the chain of supply to be part of the traceability system itself. This will require a mix of trading partner collaboration at the outset and / or a major (powerful) trading partner dictating its implementation down the supply chain. Open systems standards Not least because of the user participation issue, traceability system deployment must be based on open, universally accessible standards. Users’ internal systems will inevitably be based on a wide mix of different technologies which will, for maximum benefit, need to interface to the traceability system infrastructure. The most cost effective way of doing this is through the use of open standards. Affordability For maximum user participation, traceability system deployment must be affordable to all user organizations, from the largest to the smallest. Undoubtedly as user numbers grow and deployment increases, technology costs will decrease accordingly. An essential cost element, and the very basis of the information sharing nature of a traceability system is the communications network infrastructure, for example for this pilot EPCglobal’s EPC Network. This has to be ubiquitous, easily accessible and at low cost. The governance of the communications infrastructure must be aligned to these objectives. Lack of user understanding For users to voluntarily adopt traceability systems they must be aware of the capabilities, the potential rewards, and the pitfalls – no single user ‘can go it alone’. Examples of best practice – such as this pilot project – are essential for marketing and promotional purposes. Lack of regulation As we have discussed, whilst AIDC is fast becoming regulatory policy, traceability system regulations have hardly started to emerge in Europe. Thus adoption for the foreseeable future will be based on the voluntary co-operation and collaboration of the user community where the patient safety benefits will be the most likely common driver.
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8. Expected Benefits 8.1 Benefit scenarios The benefits case for traceability systems in the pharmaceutical sector is a complex and multidimensional model embracing both variable levels of benefit to the user organisation involved as well as the wider healthcare chain. As such companies need to review not only their own corporate perspectives but also take a broader view and consider their roles and responsibilities in delivering safe healthcare to the patient community as a whole. Patient safety is the objective of every organization involved in the delivery of patient care – outside and inside the hospital. It lies at the heart of the political agenda for healthcare and remains at the top of the corporate conscience of healthcare stakeholders. We have already described in this report the globally accepted fact that AIDC and traceability systems play a key role in patient safety improvement – as such patient safety is the primary driver of ‘value’ in the business case for such systems. As already discussed in this report, the additional drivers of value are: • • •
efficiency revenue (& marketing related) regulatory compliance
The relevance and extent of value is dependent upon the stakeholder’s role in the healthcare chain and the degree of integration of the traceability system in the business. We have identified the following benefit scenarios that are relevant to traceability systems modelled upon the Pharma Traceability Pilot: 8.1.1. Patient Safety related
Potential value driver Improved product traceability
Current business challenge Lack of Supply chain Visibility
Reduce medication errors
Correct product identification
Reduce no of counterfeit drugs administered
Confirm authenticity of drugs
Faster, more efficient recalls. Less time for ‘faulty’ product to be available on the market
Whereabouts of drugs not known. Lack of certainty on whole batch recall
Potential to assist in detection of tampering
Lack of information to help pinpoint tampering location
8.1.2. Efficiency related
Potential value driver Time taken to receipt, unpack and put away product
Current business challenge Mixed pallets require full breakdown
Time taken to support mandatory compliance regulations Time taken to pick & pack
Labour intensive
Time taken to verify goods received to invoice/order Less paper, less data re-keying, use of print outputs
Labour intensive, error prone
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Potential value driver Automated pick & despatch processes Reduced obsolescence (expiry date management) Automation of stock allocation (warehouse)
Current business challenge Labour intensive, errors of despatch advice Manual control of batch expiry dates, error prone Manual processes, errors & cost overheads
Reduced capital tied up, reduced space costs, reduced stockholding
Too much stock, too much space
Improved stock turn
Balance between ideal Stock and service provision Manually intensive process to validate invoice
Automated matching receipts to order to invoice ‘Trusted delivery’ pay on receipt Removal of errors – no re-keying from paper
Labour intensive invoice management process Labour intensive error prone paper handling
8.1.3. Revenue & marketing related
Value driver Sales improved as Consumer confidence and brand integrity maintained
Current business challenge Maintain total supply chain integrity
Reduce theft. Plus ability to ‘blacklist’ vehicle contents or bulk product if stolen aids recovery, lessen risk (and insurance costs)
Lack of product security
Increased customer trust & loyalty
Keep customer brand loyalty
Improve stock availability – Fewer stock-outs
Meeting customer order every time
Added value services
Competitive differentiation
Improved returns management
Lack of control of returns process
Reduced returns
Ensuring picking accuracy and stock quality
Improve service level
Effective customer purchase to payment process
Improved cash flow
Faster payment, less admin, getting paid on time every time Lack of transparency of information – or limited transparency at a cost
Improved information visibility – sales and demand 8.1.4. Regulatory environment related
Value driver Easier traceability of product to conform to statutory reqs Product recall made more accurate, to meet regulatory requirements Improve ability to react to regulatory changes
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Current business challenge Provide data, controls and audit trails as required by statutory bodies Ensure all batches of product recalled are completely accounted for Enable change as required by statutory bodies
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8.2 Determining the value Each User participant was asked to describe their corporate perspectives of each ‘value driver’ in the context of their own business. We attempted to scale the degree of benefit (high, medium, low) and the rationale expressed with, where possible, forecasts of quantifiable values which in the majority cases were not available.
8.3 Benefits in Summary Our findings from the User interviews are fully detailed in Appendix. Unfortunately, quantifiable data was just not available in the majority of instances so we have scaled the level of perceived benefit from LOW (L) to HIGH (H) against each value driver for each group of Users. These have been reflected in the summary table below. It shows, at a high level, the relative scale of benefits for each business driver for each group of Users. It is clear that the quantifiable benefits of traceability to be gained by any single organisation in the pharmaceutical supply chain will vary significantly, dependent upon (at least) the following factors: • • • •
Its relative position in the chain; Whether or not the organisation is managing inventory; and/or owning inventory; The level of sophistication of existing systems deployed within the organisation; The level of integration of traceability data into back-office systems e.g. stock management, warehouse management, financial management systems.
Business Driver (Hard benefits to the business)
Manufacturer
Distributor
Transporter
Wholesaler
Pharmacy
* Patient safety
High
High
High
High
High
Efficiency
Generally Low
Medium high
Low
Generally high
Low to medium
Revenue / Cash
Generally high
Medium
High
Medium
Low to medium
Regulatory
Generally High
Medium
Low
Low medium
to
to
Medium
Notes: * (i) The point must be made that whilst all groups of users recognised the importance of patient safety improvement, the views specified reflect the level of benefit perceived to their respective businesses, and not for healthcare as a whole. ** (ii) Efficiency benefits will vary dependent upon whether the distributor takes ownership of inventory – if so, they will be greater. We have no reason to believe that our group of Users is not representative of a cross-section of the sector (apart from perhaps the brand manufacturers), and whilst it is impossible in this Business Case Report to accurately identify the precise financial case for any one type of user in any circumstance, we believe that our findings as above are indicative. We should add however that we have, for obvious reasons, measured the benefits of traceability against the ‘traditional’ supply chain model. Over time, this may of course change (e.g. the single WP6 Business Case – D.3
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market channel model introduced recently by Pfizer), driven in part, ironically, by the exploitation of traceability systems.
8.4 Quantifying the benefits Approach to be adopted This subject is really a matter for the next deliverable, The Pilot Preparation report, but for completeness we are summarising here the approach we will be adopting to measure the quantifiable benefits of a traceability system. The processes and product flows planned for the pilot will be discrete to the pilot and not integrated in any way with existing day to day processes and product flows. For example, inventory for the pilot, identified by bar codes and tags, will be stored in areas separate to ‘standard’ stock and, typically, movements will be triggered by manually driven instructions (stating “BRIDGE” or similar). The reasons for this are that a fully integrated approach for what reflects one pharmacy customer for a handful of product lines with low volume call-offs in what is a pilot operation would be inordinately costly in financial and resource terms and totally unrealistic and impracticable. As such it will not be possible to adopt a typical measurement approach where “before state” processes establish a benchmark for comparison with “after state” processes following the pilot. Instead, we will identify the key performance indicators (KPIs) for each value driver for each user participant and monitor these areas in the pilot period. Following the pilot (as part of deliverable 5 The Pilot Evaluation Report) we will aim to estimate quantifiable values assuming the traceability system was fully integrated within the business process including all product lines in each business.
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9. Costs & Implications There are various areas of cost and implications associated with the implementation of supply chainwide traceability systems as envisaged by this Pharma Traceability Pilot. Some are associated with the costs of technology, others are associated with business process and business practice change. It is impossible here to be specific about any one deployment as user costs and implications of adoption will vary widely according to the degree of integration of the traceability system with in-house systems and business processes. On one extreme, the user may adopt a simple independent (non integrated) approach interfacing data available from the traceability system to existing systems in a manually oriented manner; or, on the other hand, to fully integrate the system into existing ‘back-office’ applications and business processes thereby generating maximum potential value. The costs and implications of either extreme will be significantly different as will be the benefits – simply put, the closer the degree of integration, the greater the benefits. Striking the balance between levels of investment and the pull-through reward is likely to be based upon the user’s experience and familiarisation of traceability systems and the extent of their adoption in the pharmaceutical sector. Clearly the Pharma Traceability Pilot is helpful in these regards. As stated, it will be up to each user organisation to determine its own strategic approach and to cost implementation accordingly. The costings below have not attempted to determine integration costs – as it is meaningless to attempt to do so – but illustrate a number of different areas of cost which may or may not be applicable dependent upon the user’s role in the supply chain.
9.1 Technology costs 9.1.1 EPCglobal Membership Currently, a user organisation needs to be a member of EPCglobal if it requires an EPC number e.g. a manufacturer identifying instances of products. Although fees vary country by country, EPCglobal typically charges membership fees based on the revenue of the largest parent entity of a given company, with fees usually payable to the GS1 affiliate in the country where the parent entity is registered. Example fees for end users range from €90 per annum for organisations with a turnover of less than €150,000, to a maximum of €27,000 per annum for organisations with a turnover in excess of €30Bn. There is a one-off joining fee paid in the first year only of €360 to €108,000 respectively. Fees for solution providers are also variable by country. Example fees are €750 for organisations with a turnover of less than €750,000 to a maximum of €42,500 for organisations with a turnover in excess of €375,000,000. There is no joining fee for solution providers. 9.1.2 EPCglobal Network & EPCIS There are a number of solution providers who provide EPCglobal network services, for example, BEA, IBM and VeriSign, and their pricing strategies differ. For the purposes of the pilot we are using a VeriSign implementation of EPCglobal components including Discovery Service, local ONS and EPCIS. Examples of costs and cost considerations are included below for illustrative purposes. When the standard facilities are fully available, the concept is that access to the EPCglobal network itself will be free to anyone who wishes to query the data stored in it. By taking on EPCglobal membership, an organisation will be allocated an EPC manager number, which can be registered with the root ONS (as opposed to local ONS which would source the information from the root ONS). The ONS is a directory that identifies the owner of the EPC number. The ONS supports EPC number repositories, but that does not preclude organisations from setting up their own EPC numbers and product related information management stores, recording read events as products flow through their WP6 Business Case – D.3
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supply chains. The only requirement to allow access to these product stores is that the address of the store is made available to other supply chain partners so they know where to query. Ultimately when EPCglobal specifies and supports the “Discovery” service, all supply chain partners would be able to locate other EPCIS product stores beyond the owner organisation, provided they have the right to do so, and obtain the appropriately authorised information that way. The decision as to whether or not the registration with a Discovery service requires the user to be a member of EPCglobal is yet to be taken. Whilst it should be noted that costs for EPCIS vary widely between different EPCIS providers, we have included the following VeriSign costs as an example for illustrative purposes. The current cost of a hosted EPCIS instance varies depending on number of SKUs or UIDs maintained in the system, the number of uniquely serialized items and the number of read events and queries that the system is anticipated to support. Prices for a hosted EPCIS currently run between €15K and €65K on an annual basis. Pricing for a typical hosted EPCIS data store for 100 SKU’s, each with a 1000 unique serialized ID’s, 10 read events per unique and 50 000 queries per month would cost approximately €20-30K. However for large deployments supporting millions of UIDs and millions of queries prices would readily exceed €100K. For larger deployments a self-managed EPCIS system integrated with an existing ERP database (such as Oracle or SAP) is likely to be the deployment of choice for larger companies with the resources to support the systems as this approach would provide the most flexibility but also cost the most in terms of implementation, hardware and day-to-day maintenance and support. 9.1.3 Inline coding and marking systems In terms of the software, which will undertake the tasks of serial number management, data aggregation, interface with ERP/WMS, communication with EPCIS and the provision of reporting modules, this can be delivered in a number of different ways. Software can be provided as a one-off capital cost with access to annual support contracts and services, or it can be provided on a lease model, where the product is not owned, but instead leased in much the same way that company cars and other large asset items are. In terms of a more straightforward capital purchase arrangement, the software costs associated with a typical manufacturing production line can range between €30K and €150K depending on the precise nature of the requirement and the amount of integration with existing line equipment that is required. Equipment can range from Ink jet coders to laser coders depending upon the lines and the packaging. Typically coding is split into three areas • • •
Primary Coding (items) Secondary Coding (Cases) Tertiary Coding (Pallet)
The equipment costs for a total line range from €45K for inkjet coding and for a manual packing line to €100K for laser and automated print-and-apply labellers. Each of the coding stages requires validation and scanning of the items at each stage to be aggregated up to the next level. The validation processes and the associated costs can vary considerably based upon the requirements of each line and the complexity of the process for item rejection if the validation is unsuccessful. For a basic 2D barcode validation at each validation stage approximate costs circa €10K could be applicable, up to €150k if a more sophisticated camera-based vision system is required. 9.1.4 User Traceability application Many of the requirements of the distribution providers (3PL, distributors. transporters and wholesalers) as well as the pharmacy are such that a proportion of the same infrastructure used by the manufacturers is required. Namely, there is a need to scan product albeit in many cases this would be undertaken by hand-held devices for Data Matrix/Linear printed codes and typically via portal readers for RFID. Where products e.g. cases, are broken down and then re-assembled creating new WP6 Business Case – D.3
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products, there is a requirement to create new ePC / unique identifying numbers to assign to the newly packaged collections of goods. For example, in a wholesaler environment where a box of mixed product, such as a tote, is assembled from a number of split down pallets/cases. However, the functionality required is at a much lower level than that required by the manufacturer. In most cases, data requirements will be lower and infrastructure requirements will also be less. A very broad approximation of the costs involved would be to assess a central installation cost of between €30K and €100K with smaller costs (circa €2K - €5K) to add where remote processing stations are required. The majority of the costs however are likely to be with integration and equipment (for example, an RFID hand held reader will cost of the order €3K)
9.2 Installation and operational costs There will be a number of areas of potential cost under headings of installation and operational costs. These will vary widely from one organisation to another dependent upon the nature and scope of the implementation and size and structure of the organisation. Below are some potential areas of cost for consideration: • • • • • •
Back-office and business process integration User training System Validation (FAT testing) Equipment maintenance System documentation Operational running costs
9.3 Implications There are a number of implications and considerations for a user organisation implementing a traceability system. These potentially impact not only the single user organisation but also potentially all trading partners in the supply chain. 9.3.1 Information management This is a significant topic and one that is increasingly debated in the context of full item traceability – of all items traded within the supply chain – and the world that is sometimes referred to as “the Internet of Things”. Conceptually, if we have the ability of tracing the movements of all items everywhere, wherever and whenever they move between trading partners, we have the ability to capture unimaginable volumes of data. The question is what do we do with it? How can we extract the information that is useful? How do we manage this data and at what cost? 9.3.2 Information transparency As we have discussed, deployment of an information capture and storage network such as EPCglobal, provides much greater opportunities for information sharing throughout the chain. This can realise significant benefits for users – for example, for the manufacturer, the visibility of sales made by the wholesaler to the pharmacy enables better forecasting and production planning; early notification of shipments made by the distributor or transporter can enable the wholesaler to improve scheduling and receipting at the back door. However, such opportunities for one trading partner in the chain may have risks for others. For example, where sales data is currently “sold” back to the manufacturer by the wholesaler, via information intermediaries, could mean lost revenues for the wholesaler. The implications of information transparency will be a matter for each user organisation and supply chain to consider their own “rules of engagement” and determine what works best for them. Changes of current business practice could result.
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9.3.3 Culture The pull through benefits of increased security and efficiency enabled by traceability systems may have quite significant implications for the pharma sector in the future, driving changes in not only business practice but the very culture of the supply chain itself. Where technology innovation, such as AIDC, traceability systems and electronic messaging has been widely deployed in other sectors, such as Fast Moving Consumer Goods, Retail and Automotive, there have been significant trends towards much more trusting and collaborative supply chains with major benefits resulting. If, for example, a receiving organisation can trust what is ordered will in fact be received, on time in full every time to the required quality, there comes the opportunity to reduce or even remove validation and checking procedures thereby reducing costs and increasing efficiency. By working more closely together in a collaborative manner, with better more timely information available to trading partners, the supply chain can become much more efficient and flexible, able to react more swiftly to unexpected situations. The challenge for the pharmaceutical sector is to learn from the experiences of these innovators. Note: we will discuss these topics further in the context of the Pilot Evaluation Report, deliverable D6.6.
9.4 Cost summary As we have indicated it is not possible to be precise here in determining the full cost implications of deployment of a traceability system. The costs will vary widely from one organisation to another, dependent upon many variables, as we have described. In summary, the pertinent elements of cost applicable to each type of organisation are indicated in the table below. We have not attempted to cost the implications of traceability systems described in the previous section. Cost element *EPCglobal membership Managed EPCIS Inline coding / marking (per line) User traceability workstation Installation Operational
Manufacturer
Distributor
Transporter
Wholesaler
Pharmacy
X
-
-
X
-
X
X
X
X
-
X
-
-
-
-
X
X
X
X
X
X X
X X
X X
X X
X X
Note: * (i) Currently EPCglobal covers their costs related to information uploading to the root ONS through their EPCglobal membership charge. Whether or not any supply chain participant will require ONS access will depend upon their role in, and the nature of, the supply chain in which they operate. For the purposes of this exercise however we have developed the cost matrix in line with the ONS root access requirements of the users in this pilot – only the manufacturers (Athlone Laboratories Ltd.) or their designates (Tjoapack), and UniChem are uploading product information. It should also be noted that it seems fairly clear that multiple Discovery Services will emerge, irrespective of whether there is one ‘endorsed’ by EPCglobal in the way that the root ONS is. ONS does not provide the cross-supply chain tracking – that is the role of Discovery Services – and if a number of solution providers are offering Discovery Services, there is no obvious reason to choose a single Discovery Service ‘endorsed’ by EPCglobal – and therefore no logical reason why all supply chain parties would ever be paying for EPCglobal membership. Indeed, once Discovery Services become established and people understand that it is Discovery Services and not ONS that provide the serial-level tracking capability, the value proposition of
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an ONS entry is likely to significantly diminish, especially when de facto well-known Discovery Services emerge for particular industry sectors.
10. Summary – benefits versus costs On the premise that AIDC and traceability systems have a direct positive impact on patient safety and as a consequence directly decrease patient harm and save patients’ lives, patient safety – about which all supply chain stakeholders have a fundamental responsibility – has to be the primary, most important driving benefit for the mass adoption of traceability systems. Simply put, if the right care can be associated with the right patient with greater certainty, the patient can be assured of a safer environment with decreased risk of harm or even death. Apart from the life saving attributes, the number of bed days required to treat mis-treated patients will fall as will the risk of financial exposure through litigation. Whilst a value cannot be put on a patient’s life, the cost of bed days and potential litigation surely can. The patient safety issue may be a sufficient driver for the deployment of traceability systems for all supply chain stakeholders. However, as we have discussed, other significant benefits can accrue – efficiency, revenue / marketing related and regulatory benefits. Less tangible to define and quantify, but potentially equally significant, are those associated with closer trading partner inter-working and information visibility in the chain that result from the adoption of supply chain-wide traceability systems. Business integration is a key factor determining the benefit to cost equation. We see that as especially pertinent to the distributors, wholesalers and pharmacies involved who face the integration decision. Key to the manufacturers (packagers) will be the number of production lines involved and the associated line reconfiguration and equipment costs for each. For purposes of summary, we see the business to cost integration comparison as per the schematic below:
Benefit High Traceability data integration, inter and intra the business – new systems and processes Level of integration
Traceability data integration – existing processes
Cost
AIDC only, no Integration, use of Traceability system data only
Low
Extent of benefit v cost
High
Note: the above schematic is intended to be indicative only.
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Appendix 1 AIDC & Traceability - Regulations and Policies by national and regional authorities Region Scope USA
Authority
Citation
Date
Summary of Requirement
Pharmaceuticals US Food and Drug 21CFR Parts 2/4/2004 Requires a linear bar code on most Administration 201, 606, prescription drugs and certain over610 the-counter drugs commonly used in hospitals and dispensed under order. NDC must be coded in GS1 or HIBCC. Although not stated as a requirement, FDA has indicated a recommendation for RFID.
Brazil
Pharmaceuticals ANVISA (National Resolution Health Surveillance 802 Agency)
10/8/1998 Ministry of Health requires all medicines to have GS1-13 on their packages, and the GTIN must be informed in the application form for registering the medicine.
Brazil
Pharmaceuticals ANVISA (National Resolution Health Surveillance 320 Agency)
11/22/200 Lot number and expiry date of each 2 pharmaceutical product delivered to the retailers must be informed in the invoice
Chile
Pharmaceuticals Public System and the Healthcare Minister
México
Pharmaceuticals Instituto Mexico del Seguro Social (IMSS) CANIFARMA
March, 1994
México
Medical Devices
March, 1994
Working on a pilot program to build a proof of concept and benefits of the use of bar codes.
Instituto Mexico del Seguro Social (IMSS) CANIFARMA
Belgium Pharmaceuticals Royal Decree
Croatia
Pharmaceuticals
Ministry of Health WP6 Business Case – D.3
Requires a linear bar code (for all pharmaceuticals and medical devices) that dispatch and/or sale products to the IMSS and the CANMIFARMA. Requires a linear bar code (for all pharmaceuticals and medical devices) that dispatch and/or sale products to the IMSS and the CANMIFARMA.
Bar code, sequential code per sales unit, only reimbursed pharmac. products Regulation for EAN coding on pharmaceutic al products, however there is no reg 37/72
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Region Scope
Authority
Citation
Date
Former Pharmaceuticals Republic of Macedon ia
Pursuant to the Article 48 of the Law on medicines, auxiliary medicinal remedies and medical accessories (" Official Gazette of the Republic of th, Macedonia", No.21 May 8 1998), all the pharmaceutical and medical products in the Republic of Macedonia must have the bar code GS1 13. All the pharmaceutical producers are members of GS1 Macedonia and they obligatory use the EAN-13 bar code.
Former Medical Devices Republic of Macedon ia France
(See Pharmaceuticals)
Pharmaceuticals
A decision has been taken in 2004 to move to an GS1 13 system as of June 2006. Additionally CIP (association of wholesalers, industry and pharmacists) has recommended adopting an GS1 128 system.
Greece Pharmaceuticals National Pharmaceuticals Organization
Russia
Summary of Requirement
Doc. 1202/B 8/4/04 amendment to A6A-18/26
Requires a UCC/EAN-13 bar code (bearing the NPO registration number) on all pharmaceuticals in the Greek market (OTCs excluded).
Pharmaceuticals
UNISCAN/EAN Russia and the Russian Health Ministry have a cooperation agreement on joint implementation of mandatory bar coding of pharmaceuticals with EAN/UCC GTINs.
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The Russian Health Ministry uses a unified numbering system for pharmaceuticals and medical products. All medical products and pharmaceuticals imported or sold in Russia, independently of their origin, must have GTIN (EAN-13, EAN-8 or UPC). Importers must present a document from their respective GS1 Member Organisation confirming the allocation of an EAN/UPC code. 100% of pharmaceutical products are coded with GS1 system.
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Region Scope Russia
Authority
Citation
Summary of Requirement
Medical Devices The Russian Health Ministry uses a unified numbering system for pharmaceuticals and medical products. All medical products and pharmaceuticals imported or sold in Russia, independently of their origin, must have GTIN (EAN-13, EAN-8 or UPC). Importers must present a document from their respective EAN Member Organisation confirming the allocation of an EAN/UPC code. 100% of pharmaceutical products are coded with the GS1 system.
Yes - UNISCAN/EAN Russia and the Russian Health Ministry have a cooperation agreement on joint implementation of mandatory bar coding of pharmaceuticals with EAN/UCC GTINs. Poland
Date
Pharmaceuticals Ministry of Health
EAN Poland assigned the Ministry of Health several 4-digit company prefixes, allowing the Ministry to allocate 5-digit number for each registered drug, registration no. 4 digit, package ID, EAN Check digit. The structure of the number is as following: 590 9998 RRRRP C
Slovakia Pharmaceuticals Law requires barcodes Spain
Pharmaceuticals
Spain
Pharmaceuticals Ministry of Health
Spain
Pharmaceuticals Ministry of Health
Spain
Medical Devices
WP6 Business Case – D.3
Pharmaceutical products are numbered according to the GS1 structure with prefix 858. Approximately 10% pharmacies use EAN
EAN
EAN.UCC 128 per October 2005. Currently EAN 13 system is used. Unclear if change to different barcode implicates that additional (batch related) information has to be storing within the barcode.
Ministry of Health
Agreement February The EAN-13 become mandatory for with the 29th. almost all pharmaceuticals according Farmaindustr Of 1998 to the following rules: 84-PPPPia and NNNNNN-C were PPPP is a unique AECOC prefix (always 7000), NNNNNN is the National Code assigned by the Ministry and C is the Control Digit of the EAN-13. Circular February Since then, the EAN-13 has the the 9th. of following composition: 84-PPPP1/2004 (anexo II) of 2004 NNNNNNN*, were the N* is both, a the AEMPS part of the National code and the dated on Control Digit of the EAN-13. February the 9th. RD 9/96 of January To the above specifications products January the the 15th. like "bandages, sticking plasters, 15th. of 1996 splints, cotton, etc." were included on that date.
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Region Scope Spain
Authority
Citation
Pharmaceuticals Ministry of Health
Sweden Medical Devices
Summary of Requirement
A new Working Working with the Ministry of Health amendment on it now. to develop the Real Decreto of the Real 725/2003 in order to make Decreto mandatory the use of EAN-128 in 725/2003 of case and pallet. June the 13th. on which some issues from the article 100 of the law 25/1990 of December the 20th. have been developed, is going to come out soon.
Report Prepared by a WG inside HSS, the official Swedish Standardization body for the Healthcare Industry
Switzerla Pharmaceuticals Swissmedic nd
UK
Date
Recomm All articles shall be given an article end all identity according to GS1 standard. articles Bar-coded as EAN-13 for only bar coded product ID and EAN-128 if S/N, Lot by No. or additional information is 6/14/1988 needed. A number of other regulations released after this document - none of them contradict this document.
Loi sur les 12/15/200 No specific requirement on bar code produits 0 with the exception of narcotics. The thérapeutiqu registration number has to appear on es the retail pack and the primary package in human-readable form. Bar codes (including the registration number) are encouraged. 99% of the retail packs show an EAN-13. Usage on the market. Narcotics have to identified with EAN-13.
Pharmaceuticals Department of Health Policy and Medical statement Devices
16/02/07 Bar coding recommendation (GS1) for all products in the pharma and medical device supply chain
Ukraine Pharmaceuticals EAN-13 required through law of Minister of Health and Trade
For all products in the pharmaceutical supply chain EAN-13 must be used.
Yugoslav Pharmaceuticals By Federal Law from ia 1993, each medicine must have an EAN
By Federal Law from 1993, each medicine must have a GS1 barcode.
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Region Scope
Authority
Citation
Date
Summary of Requirement
Iran
Pharmaceuticals
South Africa
Pharmaceuticals Department of Health
Department of Health requires GS1 bar code on all pharmaceutical items purchased by them through their tender process
Hong Kong
Pharmaceuticals Government Supplies Dept. of HK
EAN128 with data content GTIN / batch no / expiry date, each sales unit must carry the bar code
Hong Kong
Medical Devices
Government Supplies Dept. of HK
EAN128 with data content GTIN / batch no / expiry date, each sales unit must carry the bar code
Japan
Pharmaceuticals Ministry of Health and Welfare
EAN128, all packaging levels, sterile products = GTIN / batch no / expiry date, non-sterile = GTIN
Japan
Medical Devices
EAN128, all packaging levels, sterile products = GTIN / batch no / expiry date, non-sterile = GTIN
Korea
Pharmaceuticals In the healthcare sector, EAN Korea has taken part in the implementation of EHCR in cooperation with Ministry of Health and Welfare. Government officially adopted GTINs for the identification of all pharmaceuticals distributed in Korea.
All pharmaceutical products must be bar coded with EAN-13. At the current time, there are 51 pharmaceutical manufacturers using EAN-13 on their products.
Ministry of Health and Welfare
Pharmaceuticals
The Taiwan healthcare sector adopts EAN.UCC system
Taiwan Pharmaceuticals
As a criterion in the forms of packaging: EAN-13/ EAN-14. Selecting bar-code symbols according to operations demands: EAN-13/EAN-14/EAN-128. Over 13000 Medicines with EAN/UCC-13 GTINs have been registered in the eCatalogue of EAN Taiwan. Pharmaceutical products are mandated to be identified and barcoded with the EAN-13 system.
Thailand
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Most pharmaceutical companies have an EAN manufacturer number. EAN numbers are used in the health sector. The number 6 following the EAN prefix 880 is reserved for Pharmaceutical industry. Pharmaceuticals have been barcoded with EAN/UPC Symbology since July 2000
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Appendix 2 The Benefits Case – User perspectives The combined views of each group of users are discussed below. Manufacturer Perspectives (i) Business Driver – Patient Safety Value driver Improved product traceability
Current business challenge Lack of Supply chain Visibility
Reduce medication errors
Correct product identification
Reduce no of counterfeit drugs administer ed
Confirm authenticity of drugs
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Medium to High
Better sales information, better forecasting to reduce customer stockouts. With Traceability, product liability could be pushed further down the chain in the future. Lower insurance premiums could be valid for branded products but not for generics (as costs of insurance are out of context of the value of the product) the cost. Potentially help with tracing goods damaged in transit or stolen
High
Whilst this issue is a matter for the pharmacist, it is perceived to be a key issue for the manufacturers. The number of patient deaths could be reduced significantly. Failure to address the issue could represent a time bomb for the industry.
Medium to high
Potential estimate
How can patient’s lives be valued? A recent Business case developed by a UK agency suggested AIDC could save 1000 lives in 3 years.
High. Pharmacist authentication is key. End user confidence will be improved. (Currently there is no check by the pharmacist on the origin or source of the drugs used). The counterfeit threat is growing which will make authentication capability increasingly relevant.
Faster, more efficient recalls. Less time for product to be available
Whereabouts of drugs not known. Lack of certainty on whole batch recall
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Medium to high
Greater targeting, more focus, greater damage limitation – less time to spread a bad message unnecessarily. All products recalled. Faster recalls – less time for patient harm. Recall process more reactive. All these benefits tempered by the number of recalls currently encountered which are a few. However importance may increase as liability for recall goes up the supply chain from the hospital or pharmacy.
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Value driver Potential to assist in detection of tampering
Current business challenge Lack of information to help pinpoint tampering location
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Low
Tampering not considered a current problem now but may increase in future (potential for bio-terrorism)
Potential estimate
value
Potential estimate
value
(ii) Business Driver – Efficiency Value driver Time taken to receipt, unpack and put away product
Current business challenge Mixed pallets require full breakdown
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
Low
Not applicable – only pallets handled and no put away.
Potentially high
If pilot works then government may wish to enforce traceability solutions globally as well as improving batch controls end to end. A big negative if company cannot react quickly
Time taken to support mandatory compliance regulations
Labour intensive
Time taken to pick & pack
Labour intensive
Low
Not applicable to manufacturer
Time taken to verify goods received to invoice/order Less paper, less data rekeying, use of print outputs Automated pick & despatch processes
Labour intensive
Low
Some goods received (pallet level) but not usually relevant to manufacturer
Labour intensive
Low
Internal ERP systems in place so minimal paper handling
Low
Not applicable to the manufacturer
Low
Not applicable to manufacturer (apart perhaps for returns if they are accepted). Product is manufactured to order by the production batch and will always be in date.
Low
Not applicable to a manufacturer
Reduced obsolescenc e (expiry date managemen t) Automation of stock allocation (warehouse)
Labour intensive, errors of despatch advice Manual control of batch expiry dates Manual processes, errors & cost overheads
WP6 Business Case – D.3
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Value driver
Current business challenge
Reduced capital tied up, reduced space costs, reduced stockholding Improved stock turn
Too much stock, too much space
Automated matching receipts to order to invoice ‘Trusted delivery’ pay on receipt
Removal of errors – no re-keying from paper
Balance between ideal Stock and service provision Manually intensive process to validate invoice Labour intensive invoice manageme nt process Labour intensive error prone paper handling
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
Low
Not applicable to the manufacturer if finished product is shipped out on completion of manufacture process.
Low
Not applicable to a manufacturer
Low
Not applicable to a manufacturer
Low
Not applicable to a manufacturer
Low
Not applicable to a manufacturer
Potential estimate
value
Potential estimate
value
(iii) Business Driver – Revenue Value driver Sales improved as Consumer confidence and brand integrity maintained Reduce theft. Ability to ‘blacklist’ vehicle contents or bulk product if stolen aids recovery, lessens risk (and insurance costs) Increased customer
Current business challenge Maintain total supply chain integrity
Lack of product security
Keep customer
WP6 Business Case – D.3
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Medium to high
Brand and reputation very important particularly for branded and OTC products, less so for generics.
Low
More relevant to branded products generics are generally not insured due to competition keeping costs low. Branded products would be insured due to high item costs
Low
-
Short-term benefit but with industry-wide 44/72
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Value driver trust loyalty
&
Current business challenge brand loyalty
Improve stock availability – Fewer stockouts
Meeting customer order every time
Added value services
Competitiv e differentiati on
Improved returns managemen t
Lack of control of returns process
Reduced returns
Ensuring picking accuracy and stock quality Effective customer purchase to payment process Faster payment, less admin, getting paid on time every time Lack of information availability – or availability at a cost
Improve service level
Improved cash flow
Improved information visibility – of sales and demand
WP6 Business Case – D.3
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
medium
adoption the market becomes a level playing field. Customer loyalty should improve however. Again, an important area for branded and OTC.
Low
With stock made to order, this is not relevant to a manufacturer
Medium to high
If a manufacturer is ahead of the game by implementing Traceability systems early, a short-term advantage over the competition would be gained. This is absolutely key – it is difficult to differentiate in the generics market as all different manufactures are the same. First market mover gets there first and is more likely to retain the business.
Low
Not relevant to a manufacturer
Low
Not relevant to a manufacturer
Low
Not a significant issue (typical lead time from order to manufacture is 16 weeks)
Low
Payment is not a significant problem. Perhaps payment could be improved but it is typically controlled by technical contracts.
High
Better sales and demand information is highly significant. Better planning, more sales
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Potential estimate
value
Perhaps 10% additional business per annum with a two year advantage being first in.
May 2007
BRIDGE – Building Radio frequency IDentification solutions for the Global Environment
(iv) Business Driver – Regulatory Value driver Easier traceability of product to conform to statutory reqs
Current business challenge Provide data, controls and audit trails as required by statutory bodies
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
High
Currently such requirements do not exist, but they will be coming soon! Whilst difficult to quantify, the need to react very quickly on conformance to regulatory requirements ahead of the competition is key
Potential estimate
See also Section ‘Revenue & Cash’ subsection ‘Added Value services’ Product recall made more accurate, to meet regulatory requirement s Improve ability to react to regulatory changes
Ensure all batches of product recalled are completely accounted for Enable change as required by statutory bodies
WP6 Business Case – D.3
Low
The number of recalls from a manufacturer is low. Recall systems are already in place and typically conducted via a blanket announcement to the sector.
High
Whilst difficult to quantify, the need to react very quickly on conformance to regulatory requirements ahead of the competition is key
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BRIDGE – Building Radio frequency IDentification solutions for the Global Environment
Distributor Perspectives Note: Distributor perspectives vary considerably dependent upon whether or not the distributor owns the stock or manages it on behalf of the manufacturer.
(i) Business Driver – Patient Safety Whilst all distributors recognise the importance of patient safety, the value drivers listed in the table below would have little impact on their businesses.
Value driver Improved product traceability
Current business challenge Lack of Supply chain Visibility
Reduce medication errors
Correct product identification
High
Not relevant to distributors as a cost driver but recognised as significant benefit of Traceability system implementation.
Reduce no of counterfeit drugs administer ed
Confirm authenticity of drugs
Low
Not perceived as a current issue
Faster, more efficient recalls. Less time for product to be available
Whereabouts of drugs not known. Lack of certainty on whole batch recall
Medium to high
Greater targeting more focus, greater damage limitation – less time to spread a bad message unnecessarily. All products recalled. Faster recalls – less time for patient harm. Recall process more reactive
Potential to assist in detection of tampering
Lack of information to help pinpoint tampering location
Low
Tampering is not a current issue (typically inhouse controls would detect any tampering)
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Medium to low
Some benefit, not significant
Potential estimate
value
Potential estimate
value
(ii) Business Driver – Efficiency Value driver Time taken to receipt, unpack and put away product
Current business challenge Mixed pallets require full breakdown
WP6 Business Case – D.3
Scale benefit
Medium
of
Potential benefits – quantifiable and non-quantifiable Would provide benefit where able to scan the secondary packaging. This would enable quicker verification of physical delivery against advice note. (Current process is based on a % check.) This solution may enable full 47/72
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Value driver
Current business challenge
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
Potential estimate
checking and consequent improved quality. Time taken to support mandatory compliance regulations Time taken to pick & pack
Labour intensive
Low
The availability of batch number and expiry date electronically may offer some savings – but not a big issue.
Labour intensive
Medium
Time taken to verify goods received to invoice/order
Labour intensive
Medium
Typically labour intensive process – scanning of products in bulk is an opportunity to reduce costs. Would provide benefit where able to scan the secondary packaging. This would enable quicker verification of physical delivery against advice note. (Current process is based on a % check.) This solution may enable full checking and consequent improved quality.
Less paper, less data rekeying, use of print outputs Automated pick & despatch processes
Labour intensive
Medium
Integration into ERP systems would reduce keying, pallet labelling, and improve accuracy.
Medium to high
Typically a labour intensive process. Traceability would provide benefit where able to scan the secondary packaging. This would enable quicker verification of physical delivery against advice note. (Current process is based on a % check.) This solution may enable full checking and consequent improved quality.
Reduced obsolescenc e (expiry date managemen t) Automation of stock allocation (warehouse)
Manual control batch expiry dates
Medium to high
Improved inventory management through automation of expiry date
Medium
(for inventory owners) Automation of manual processes to better seek markets that will take available product
Reduced capital tied up, reduced space costs, reduced stockholding Improved stock turn
Too much stock, too much space
Medium to high
Space can be a big issue with high costs of additional space increased by costs of inflow and outflow.
Balance between ideal
Medium to
This area could be a significant area of benefit dependent upon the current
Labour intensive, errors of despatch advice
of
Manual processes, errors & cost overheads
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BRIDGE – Building Radio frequency IDentification solutions for the Global Environment
Value driver
Automated matching receipts to order to invoice ‘Trusted delivery’ pay on receipt
Current business challenge Stock and service provision Manually intensive process to validate invoice Labour intensive invoice manageme nt process
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
high
systems and processes in place.
Low
Not relevant
Low
Not relevant
Potential estimate
value
Potential estimate
value
(iii) Business Driver – Revenue Value driver Sales improved as Consumer confidence and brand integrity maintained Reduce theft. Ability to ‘blacklist’ vehicle contents or bulk product if stolen aids recovery, lessens risk (and insurance costs) Increased customer trust & loyalty
Current business challenge Maintain total supply chain integrity
Lack of product security
Keep customer brand loyalty
Improve stock availability – Fewer stockouts
Meeting customer order every time
Added value services
Competitiv e differentiati
WP6 Business Case – D.3
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
High Ultimately would increase the volumes going through the supply chain – increasing revenue.
Low
A ‘nice to have’ feature
Medium
In short-term will be beneficial – repeated sales, increased volumes, higher revenue - but when every player has the capability, the playing field evens out. However, an opportunity to retain the additional business gained
Medium
Back orders are a big problem. However benefit value will vary according to the level of sophistication of inventory management of current systems.
Medium
Staying ahead of the competition is an important factor – need to be seen to 49/72
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Value driver
Current business challenge on
Improved returns management
Lack of control of returns process
Reduced returns
Ensuring picking accuracy and stock quality
Improve service level
Effective customer purchase to payment process Faster payment, less admin, getting paid on time every time
Improved cash flow
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Potential estimate
value
Potential estimate
value
remain on the cutting edge of new technology. Low to medium
Dependent upon the current returns process. In some instances, the distributor will receive a single transaction from (the wholesaler) requesting a credit for a single value. Alternatively, the returns process can be time-consuming (inability to always quickly identify returned product). AIDC would enable quick and accurate material identification and the ability to link to an individual order.
Low
Returns are not often caused by picking inaccuracies but usually because the customer ordered the wrong stock or is ‘dumping’ old stock back up the chain.
Low to medium
Likely benefits
Low.
Not relevant
(iv) Business Driver – Regulatory Value driver Easier traceability of product to conform to statutory reqs
Product recall made more accurate, to meet regulatory requirements
Current business challenge Provide data, controls and audit trails as required by statutory bodies Ensure all batches of product recalled are completely accounted for
WP6 Business Case – D.3
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Low
See below
Medium to high
Mass serialisation will allow tracking down to ‘packet level’, this would enable recall to be actioned in lower levels of granularity i.e. more detail, such as smaller batches, direct from patient, etc).
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Value driver Improve ability to react to regulatory changes
Current business challenge Enable change as required by statutory bodies
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Low
Not seen as relevant
Potential estimate
value
Transporter Perspectives For the purposes of this analysis, the transporter plays a role of simply carrying product in bulk from point A to point B, potentially cross-docking between depots according to their distribution network. (i) Business Driver – Patient Safety Value driver Improved product traceability
Current business challenge Lack of Supply chain Visibility
Reduce medication errors
Correct product identification
Low
Not relevant to transporters
Reduce no of counterfeit drugs administer ed
Confirm authenticity of drugs
High
The ability to detect ‘rogue’ suppliers who might be handling counterfeit goods, and the counterfeit goods themselves, is important
Faster, more efficient recalls. Less time for product to be available
Whereabouts of drugs not known. Lack of certainty on whole batch recall
High
This is a big advantage for the transporter as it is responsible for collecting the right product and quantity. Traceability will reduce the ‘arguments’ associated with contents of boxes, a big issue for reverse logistics, which waste time chasing queries and create admin overhead.
Potential to assist in detection of tampering
Lack of information to help pinpoint tampering location
Low
Tampering is not a current issue.
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
High
Certain product groups e.g. Vaccines, require a full product list (vial by vial) necessitating a complete traceability system.
Potential estimate
A considerable cost saving. Tens of thousands of £s per annum.
(ii) Business Driver – Efficiency
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value
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Value driver Time taken to receipt, unpack and put away product
Current business challenge Mixed pallets require full breakdown
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
Low
Not applicable
Time taken to support mandatory compliance regulations Time taken to pick & pack
Labour intensive
Low
Not applicable
Labour intensive
Low
Not applicable
Time taken to verify goods received to invoice/order Less paper, less data rekeying, use of print outputs Automated pick & despatch processes
Labour intensive
Low
. Not applicable
Labour intensive
Low
Not applicable
Low
Not applicable
Low
Not applicable
Low
Not applicable
Low
Not applicable
Low
Not applicable
Low
Not relevant
Reduced obsolescenc e (expiry date managemen t) Automation of stock allocation (warehouse)
Reduced capital tied up, reduced space costs, reduced stockholding Improved stock turn
Automated matching receipts to
Labour intensive, errors of despatch advice Manual control of batch expiry dates Manual processes, errors & cost overheads Too much stock, too much space
Balance between ideal Stock and service provision Manually intensive process to
WP6 Business Case – D.3
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Potential estimate
May 2007
value
BRIDGE – Building Radio frequency IDentification solutions for the Global Environment
Value driver order to invoice ‘Trusted delivery’ pay on receipt
Current business challenge validate invoice Labour intensive invoice manageme nt process
Scale benefit
of
Low
Potential benefits – quantifiable and non-quantifiable
Potential estimate
value
Potential estimate
value
Not relevant
(iii) Business Driver – Revenue Value driver Sales improved as Consumer confidence and brand integrity maintained Reduce theft. Ability to ‘blacklist’ vehicle contents or bulk product if stolen aids recovery, lessens risk (and insurance costs) Increased customer trust & loyalty
Current business challenge Maintain total supply chain integrity
Lack of product security
Keep customer brand loyalty
Improve stock availability – Fewer stockouts
Meeting customer order every time
Added value services
Competitiv e differentiati on
Improved returns managemen t
Lack of control of returns process
WP6 Business Case – D.3
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
High
Very important area. service provider
High
Lost consignment reduction very important area. Also damaged goods detection benefits every link in the chain. Helps to reduce arguments as to where damage occurred.
High
Very important area. service provider
Low
Not applicable.
High
Staying ahead of the competition is an important factor – need to be seen to remain on the cutting edge of new technology. Improved management (customer) reporting would be a benefit
High
Reverse logistics are a problem. Transporter needs to ensure all goods are returned. Can be responsible for discrepancies. Reduce arguments about 53/72
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Transporter is a
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Value driver
Current business challenge
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Potential estimate
value
contents of boxes is major area of benefit. Reduced returns
Improve service level
Improved cash flow
Ensuring picking accuracy and stock quality Effective customer purchase to payment process
Faster payment, less admin, getting paid on time every time
High
Not picking issue, but returns create significant issue.
High
Transporter is a service provider – customer service is everything! Seeking 99+++%. OTIF (On Time In Full) is becoming increasingly important – can result in significant ‘fines’ being imposed by the customer.
Medium
Remove the arguments e.g. returns management, consignment loss, and opportunities for faster payment.
Significant
(iv) Business Driver – Regulatory Value driver Easier traceability of product to conform to statutory reqs
Product recall made more accurate, to meet regulatory requirement s Improve ability to react to regulatory changes
Current business challenge Provide data, controls and audit trails as required by statutory bodies Ensure all batches of product recalled are completely accounted for Enable change as required by statutory bodies
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Low
See below
High
Mass serialisation will allow tracking track down to ‘packet level’, this would enable to recall in more detail (smaller batches, direct from patient etc).
Low
Not seen as relevant
Potential estimate
Wholesaler Perspectives (i) Business Driver – Patient Safety
WP6 Business Case – D.3
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Value driver Improved product traceability
Current business challenge Lack of Supply chain Visibility
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Medium
Currently the batch code and order details are used as a method of tracing product but this is not totally accurate. Traceability coding throughout the supply chain would be a significant improved.
Potential estimate
value
Potential estimate
value
Early adopters would be advantaged. Reduce medication errors
Correct product identification
High
Whilst this value driver is not specifically pertinent to wholesalers as a business benefit, they can see the need to trace and correctly identify drugs and to reduce the number of drugs administered incorrectly, which currently accounts for significant numbers of deaths.
Reduce no of counterfeit drugs administer ed
Confirm authenticity of drugs
High
Traceability, trading partner and product identification will all contribute to the increased likelihood of counterfeit product detection – benefiting all parties in the supply chain.
Faster, more efficient recalls. Less time for product to be available
Whereabouts of drugs not known. Lack of certainty on whole batch recall
Medium to high
Currently the batch code and order details are used as a method of tracing product but this is not totally accurate. Recall is not considered to be a major problem as it is not a frequent occurrence. Traceability coding throughout the supply chain would be an improvement on the current system Class 1 to 3 product recalls do occur and are difficult to manage. Any data which potentially will enable faster and more accurate tracing of defective batches of product will be of great help in this area. Benefits will be tangible but at the moment unquantifiable.
Potential to assist in detection of tampering
Lack of information to help pinpoint tampering location
Low
Little or no evidence of tampering, but traceability would be helpful in that rare event.
(ii) Business Driver – Efficiency Value driver
Current business challenge
WP6 Business Case – D.3
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
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Value driver Time taken to receipt, unpack and put away product
Current business challenge Mixed pallets require full breakdown
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
Potential estimate
High
Current processes are manually intensive and time consuming. Automation would considerably reduce labour costs and improve accuracy.
33% reduction in labour costs involved in receipting 10% reduction in receipting costs
Time taken to support mandatory compliance regulations
Labour intensive
Medium
Product authentication is manually intensive. Savings could be achieved if this can be linked to the traceability data and processed automatically
Time taken to pick & pack
Labour intensive
Medium
Benefits variable dependent on current processes. Potential for accuracy and service level improvement gains
Time taken to verify goods received to invoice/order Less paper, less data rekeying, use of print outputs
Labour intensive
Low
Some potential savings in data entry. Integration with reconciliation systems would deliver greater benefits.
Low to medium
If the reductions in keying and paperwork mentioned above can be achieved, significant cost reductions in goods inwards and purchasing departments become possible.
Medium to high
Major benefits could be achieved if traceability data could be used to improve inventory management. Tasks are (typically) currently done manually
Medium to high
Automation of the expiry date would aid stock management, reduce ‘scrap’ and reduce returns.
Medium to high
Major benefits could be achieved if traceability data could be used to improve inventory management and stock allocation. Tasks typically done manually
High
This could help control space allocation and reduce overstocking by scanning traceability codes. Warehouse space is a big issue – additional space costs are high. E.g. €4 per pallet per week storage, plus €4/pallet in-transport costs and €4/pallet out-transport costs
Medium to high
Could help improve stock turn by scanning and analysing traceability codes. Additionally it could be used to improve space control and reduce the
Labour intensive
Automated pick & despatch processes
Labour intensive, errors of despatch advice
Reduced obsolescenc e (expiry date managemen t) Automation of stock allocation (warehouse)
Manual control batch expiry dates
Reduced capital tied up, reduced space costs, reduced stockholding
Too much stock, too much space
Improved stock turn
Balance between ideal Stock and service
of
Manual processes, errors & cost overheads
WP6 Business Case – D.3
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value
Reduced out of date stock 0.01% of sales value
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Value driver
Current business challenge provision
Automated matching receipts to order to invoice
Manually intensive process to validate invoice
‘Trusted delivery’ pay on receipt
Labour intensive invoice manageme nt process
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
Potential estimate
value
Potential estimate
value
problems currently encountered in the overstocking of products High
Major benefits could be achieved in the automated matching of receipts against orders and invoices. Scanning of products on receipt could reduce data entry errors, improve accuracy, reduce human error lead to more rapid receipt to payment processes.
Low
A long term goal. Some pilots of “trusted receipting” are underway. These could be supported if the Traceability system assured greater accuracy of the supply chain.
(iii) Business Driver – Revenue Value driver Sales improved as Consumer confidence and brand integrity maintained
Current business challenge Maintain total supply chain integrity
Reduce theft. Ability to ‘blacklist’ vehicle contents or bulk product if stolen aids recovery, lessens risk (and insurance costs) Increased customer trust & loyalty
Lack of product security
Improve stock availability – Fewer stockouts
Meeting customer order every time
Keep customer brand loyalty
WP6 Business Case – D.3
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Low
Some benefits would be achieved if consumer confidence was strengthened by a more controlled and regulated supply chain offered by Traceability. Some competitive advantage may be possible perceived for ‘first time movers’ being ahead of the game but this would likely be short term.
Low
Not perceived as an issue. Theft of generics not commonplace but more so for branded. Not an area of priority, managed by Loss Prevention functions.
Low
Possibly some increased customer confidence would be gained if service levels increased.
Medium to high
Benefits could be achieved if traceability data could be used to improve inventory management in the area of stock availability. Sales would benefit too as stock availability currently suffers from the following problems: 57/72
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Value driver
Current business challenge
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Potential estimate
value
Potential estimate
value
1) Government price control changes causing manufacturing stock build problems. 2) Demand is not always correctly forecast 3) Manufacturing quota problems This is a long term issue which could be addressed in part by the use of traceability data Added value services
Competitiv e differentiati on
Improved returns managemen t
Lack of control of returns process
Reduced returns
Ensuring picking accuracy and stock quality
Improve service level
Effective customer purchase to payment process
Improved cash flow
Faster payment, less admin, getting paid on time every time
Medium
An important area – traceability can add perceived value (although very difficult to quantify)
High
Returns are a major issue. Traceability (identification of stock owners) can reduce the arguments; reduce transport costs of returns, reduce short ship / delivery error; identify/reduce stock dumping (another party’s someone returned). More general use of Traceability systems would reduce the occurrence of stock dumping.
Low
Although returns management is a high priority area, returns are not often caused by picking errors. Expiry date management would help reduce deliveries of old stock. The key area is stock dumping by customers (as described above)
High
Any improvements which can be made to customer service levels are important. If traceability coding enables improvements in the processes of supplying the customer with the right product at the right price on time every time then it can only be very beneficial.
High
If stock turn and other inventory management problems can be improved cash flow will improve as there will be fewer queries and credits to resolve and more payments will be made on time
(iv) Business Driver – Regulatory Value driver
Current business challenge
WP6 Business Case – D.3
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
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Value driver Easier traceability of product to conform to statutory reqs
Product recall made more accurate, to meet regulatory requirement s Improve ability to react to regulatory changes
Current business challenge Provide data, controls and audit trails as required by statutory bodies
Ensure all batches of product recalled are completely accounted for Enable change as required by statutory bodies
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Medium
The compliance regulations which exist are currently minimal with regard to their impact on the warehousing and control of product in the wholesale environment. However it is very probable that these will increase significantly with more governmental and European Union requirements
Low
Product recall does not happen often and can vary in severity from a total recall to a minor error on labelling. Batch controls are currently adequate, but could be improved if traceability data were used.
Low
Could be of advantage if companies were ahead of their competition and could implement such changes rapidly
Potential estimate
value
Potential estimate
value
Pharmacy Perspectives (i) Business Driver – Patient Safety Value driver Improved product traceability
Current business challenge Lack of Supply chain Visibility
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
High
Expiry date and Batch number are very important here, particularly expiry date – very helpful. (Currently only product code on the patient pack) Regulation for improved Traceability is almost inevitable. Getting ahead of the game is a major benefit. Benefits per each supply chain function but as importantly significant benefits in the larger global context.
Reduce medication errors
Correct product identification
High
Significant, but for maximum impact requires traceability to the patient bedside and linkage of the administrative and Electronic Patient Record systems.
Reduce no of counterfeit drugs
Confirm authenticity of drugs
Low
Currently only a minor problem but it could grow.
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Value driver
Current business challenge
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Medium to high
Recalls of some sort or other occur regularly (once a fortnight). A big problem is the lack of Traceability in current systems. Traceability information will enable identification of the product’s destination.
Low
Currently not an issue
High
Risk management very important. Traceability offers a more secure supply chain providing greater certainty (right product, right time).
Potential estimate
value
Potential estimate
value
administer ed Faster, more efficient recalls. Less time for product to be available
Whereabouts of drugs not known. Lack of certainty on whole batch recall
Potential to assist in detection of tampering Improved supply chain surety
Lack of information to help pinpoint tampering location Lack of control and visibility of the supply chain (high risk)
(ii) Business Driver – Efficiency Value driver Time taken to receipt, unpack and put away product
Current business challenge Mixed pallets require full breakdown
Scale benefit
Potential benefits – quantifiable and non-quantifiable
Medium
Receipting time will be saved by AIDC. (Unpack and put away will not be impacted).
Not applicable.
Time taken to support mandatory compliance regulations Time taken to pick & pack
Labour intensive
Low
Labour intensive
Low
Time taken to verify goods received to invoice/order
Labour intensive
High
WP6 Business Case – D.3
of
Where robotics pharmacy management system employed, additional coding does not help, apart from perhaps the inclusion of expiry date to enable the system greater intelligence and improved inventory management as a result.
Considerable time savings – employee cost reduction
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50% of an FTE per annum
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Value driver Less paper, less data rekeying, use of print outputs Automated pick & despatch processes Reduced obsolescenc e (expiry date managemen t) Automation of stock allocation (warehouse)
Reduced capital tied up, reduced space costs, reduced stockholding Improved stock turn
Automated matching receipts to order to invoice ‘Trusted delivery’ pay on receipt
Removal of errors – no re-keying from paper
Current business challenge Labour intensive
Labour intensive, errors of despatch advice Manual control of batch expiry dates Manual processes, errors & cost overheads Too much stock, too much space
Balance between ideal Stock and service provision Manually intensive process to validate invoice Labour intensive invoice manageme nt process Labour intensive error prone paper handling
Scale benefit
of
Potential benefits – quantifiable and non-quantifiable
Low
Some benefit but not significant (requires document automation to gain greater benefit).
Low
Typically managed via robotics
Medium
Potential – robotic systems require enhancing to manage expiry dates
Low
Not applicable
Low
Not applicable
Low
Not applicable
Medium
AIDC will enable data collection but invoicing routines will be unaffected. However, if the supplier’s pick is more accurate and reduced receipting errors in the Trust result, major benefits.
Low
Some benefit. But Auditors and HMRC are likely to have issues if there is no invoice produced.
Low to medium
Automation will reduce intervention and error rates.
Potential estimate
value
Potential estimate
value
manual
(iii) Business Driver – Revenue Value driver
Current business challenge
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Scale of benefit
Potential benefits – quantifiable and non-quantifiable
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Value driver Sales improved as Consumer confidence and brand integrity maintained Reduce theft. Ability to ‘blacklist’ vehicle contents or bulk product if stolen aids recovery, lessens risk (and insurance costs) Increased customer trust & loyalty
Current business challenge Maintain total supply chain integrity
Lack of product security
Keep customer brand loyalty
Improve stock availability – Fewer stockouts
Meeting customer order every time
Added value services
Competitiv e differentiati on
Improved returns managemen t
Lack of control of returns process
Reduced returns
Ensuring picking accuracy and stock quality
Improve service level
Effective customer purchase to payment process Faster payment, less admin, getting paid
Improved cash flow
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Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Low
Not generally applicable to a hospital but products are manufactured..
High
This area is a big issue. Supplier’s say they have delivered and have a signature but it is not recognised by the receiving hospital as anyone’s in the Trust. This happens all the time. Surety of receipting is the big benefit.
Low
Not applicable
Low
Some relevance as Barts is a supplier too (of sterilised dressings). Hundreds of thousands of £s every year to external customers.
Low
Not applicable
Medium
Returns are a major issue – two star benefit. One FTE minimum employed on returns in the Trust. Highly manual process.
Low
See above – a medium benefit. Although EAN code is already available, improved picking in the first place (by the supplier) may reduce returns (but does not address the real returns problem where the customer has ordered incorrectly)
Low
A benefit for the Pharmacy as a customer
Low
Some relevance for the Pharmacy as a supplier
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For Barts, estimated cost of signature falsification £10,000 p.a.
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Value driver
Current business challenge on time every time
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Potential estimate
value
Scale of benefit
Potential benefits – quantifiable and non-quantifiable
Potential estimate
value
Low
Not applicable
High
Recall is a major issue but already covered. No additional benefit from the regulatory aspect
Low
Not applicable
(iv) Business Driver – Regulatory Value driver Easier traceability of product to conform to statutory reqs
Product recall made more accurate, to meet regulatory requirement s Improve ability to react to regulatory changes
Current business challenge Provide data, controls and audit trails as required by statutory bodies Ensure all batches of product recalled are completely accounted for Enable change as required by statutory bodies
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Appendix 3 UK Department of Health Policy Announcement for the adoption of auto-identification policies. 16th February 2007 NHS to improve patient safety with bar code standards from GS1 UK “Scan and Save” policy to save lives and money Bar coding technology, adhering to international standards administered by GS1 UK is recommended for implementation throughout the NHS in England. Lord Hunt of Kings Heath, minister of state for quality at the Department of Health, launched a policy document this week issuing guidance for the use of auto-identification and data capture technologies such as bar codes across the NHS. He recommended that in order to reap the benefits of such technologies, both industry and the NHS should use the GS1 system of coding. GS1 is an independent global standards body which provides its members with an international system of unique identification numbering, already used widely in the pharmaceutical, retail and supply chains sectors. These numbers are generally applied via bar codes and radio frequency identification (RFID) tags. GS1 UK will be providing its unique numbering systems and support to all NHS organisations. The NHS will benefit in a number of areas from standardised automated identification. For example, a bar-coded wristband and a bar code reader can be used to verify the patient’s identity at any time, and to ensure that the right patient is about to receive the right treatment. Errors, many of which are caused by getting the patient identity wrong, currently cost the NHS around £2 billion in extra bed days. Other areas in which patients are likely to benefit include: * Surgical instrument sterilisation: small bar codes can enable the automatic identification of which instruments have been sterilised and when. * Drugs: batch numbers and expiry dates will be tracked automatically, ensuring that old or faulty batches do not enter circulation. Dosage and frequency will be linked directly to patient records. A number of healthcare trusts are already using auto-identification including Birmingham Heartlands Hospital, Charing Cross Hospital and Royal Free NHS Trust. Others are implementing pilots and training courses prior to putting new technologies into practice. Gary Lynch, COO of GS1 UK commented: “Standardising its identification process is a key component in securing patient safety across the NHS. GS1 UK has more than 30 years experience providing global standards for unique, automated identification to its members and working with the NHS on this initiative is a major step forward for both of our organisations. We look forward to rolling out this project as soon as possible to make hospitals and surgeries safer for patients.” Ends About GS1 UK GS1 UK has driven innovation in the supply chain for over thirty years. It is part of the global GS1 organisation, dedicated to the development and implementation of global data standards and solutions for the supply chain. GS1 standards are the most widely used in the world. GS1 UK helps industry to implement these data standards through the use of bar codes, RFID, Global Data Synchronisation (GDS) and electronic business messaging. www.gs1uk.org Additional Notes to editors
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1. The policy document ‘Coding for success – simple technology for safer patient care’ launched by Lord Hunt today will encourage further use of product coding on a voluntary basis within industry and sets out a programme of action that will facilitate change both in the NHS and industry on a voluntary basis. See www.dh.gov.uk. 2. Auto-identification and data capture (AIDC) technology has the potential to tackle mismatching errors in particular, as well as bringing other efficiencies and cost savings. Key applications include: bar coding and radio frequency identification (RFID). Case study examples In Leeds Teaching Hospitals, the Catheter Labs have reduced stock levels from £1.6 million to £700,000, including 983 products lines. The average spend per day is £30k, which amounts to approximately 4.5 weeks cover and 11 stock turns per year. Now orders are place twice weekly on an electronic system instead of twice daily on a paper system, reducing staff time dramatically and reducing the costs of the purchasing process from up to £7.05 per line to 39 pence. At the Oxford Radcliffe Hospitals the electronic blood transfusion system the reduced time taken for each procedure is estimated to equate to personnel savings of £17.44 for each transfusion. For their 30,000 transfusions per year, this amounts to total savings of £523,200 per year. One trust deploying a robotic dispensing system saw a reductions in time spent in the dispensary of 34% for pharmacists and 51% for technicians, enabling far more time to be spent on the wards working directly with patients and ward staff. Ends For
more,
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Appendix 4 Coding for Success (UK Department of Health) In February 2007, the UK Department of Health published a policy for the adoption of AIDC in the NHS in England. With the kind permission of the Department we have reproduced its ‘summary leaflet’ for the purposes of this report.
Coding for Success Simple technology for safer patient care
An introduction. 1. About ‘Coding for Success’ ‘Coding for Success’ describes bar coding and similar coding technologies (known as automatic identification and data capture (AIDC)) and the impact they could have in healthcare, and sets out an action plan to encourage wider uptake. What are the key recommendations? • The GS1 System should be the recommended standard for coding in the NHS. • Healthcare products supplied to the NHS in England should have a product code in the GS1 standard format. • New coding applications should be fully evaluated to improve our knowledge and understanding of this technology in healthcare.
What are the benefits? There is evidence of real improvements to patient safety when coding systems are used to match patients to their care: reduced medication errors, reduced risk of wrong-site surgery, accurate track and trace of surgical instruments, equipment and other devices and much better record keeping. Using coding to manage supplies and purchasing electronically can cut costs dramatically as well as improve efficiency. Who needs to read this guidance? • Clinicians who want to improve safety and quality of care for patients. • Finance directors and others responsible for investment decisions who want to reduce costs and improve efficiency. • Managers who want to develop high-quality services delivered by staff working in fulfilling and satisfying roles. • Industry supplying medicines, devices and other goods to the NHS. • Technology suppliers who can develop the AIDC systems to support healthcare applications.
2. The vision The potential for AIDC in healthcare For Manufacturers, for Wholesalers, for Healthcare Providers – finance and stock control For Clinicians, Patients and Patient Records WP6 Business Case – D.3
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•
To Verify products through supply chain
• •
To Verify right patient and right intervention To Update patient record, stock control and audit
3. The future is here: case studies ‘Right patient, right blood’ – Oxford Radcliffe Hospitals The haematology department at the Oxford Radcliffe Hospitals developed, tested and is in the process of implementing a Trust-wide electronic clinical blood transfusion management system involving bar code patient identification. Hand-held computers are used to prompt clinical staff through each step of the transfusion process, including blood sample collection, removal of blood units from blood fridges and blood administration, and to check that the right patient receives the right blood. Each patient’s first name, surname, date of birth, gender and hospital number are included in a two-dimensional bar code on their wristband. The hand-held computer is attached to a bedside portable printer to generate a label containing these details for the blood sample. The laboratory scans the bar code on the blood sample to enter the patient’s details into the laboratory IT system. After laboratory testing, labels are printed and attached to the blood units for the patient; each label contains a bar code incorporating the patient’s identification details and the unique identification number for the blood unit. Blood collection from blood fridges is electronically controlled; the staff collecting blood are required to bring a ‘pick-up slip’ with the patient’s bar coded identification details generated from their wristband. Before administering blood, a member of staff, using a hand-held computer, is prompted to make a series of checks and scans on the bar codes on the wristband and the blood. If the blood is not the correct match, the computer indicates ‘Do Not Transfuse’ and sounds an alert. Use of an automated dispensing system – Charing Cross Hospital The Charing Cross Hospital installed a Swisslog Pack Picker automated dispensing machine in the pharmacy in winter 2003/04. Its impact on a range of outcome measures was assessed through a before-and-after study. • Dispensing errors were reduced from 2.7% to 0.9%. • Time taken to pick items was significantly reduced. • Stock control was improved, with fewer items ordered outside the normal order and fewer items supplied as ‘to-follow’. There was a dramatic improvement in stock discrepancies. • There was a 23% increase in storage capacity. • The system had no impact on time taken for labelling and assembly of prescriptions, and no change in turnaround time for discharge prescriptions. Staff felt that the Pack Picker had helped the department keep pace with change and enhanced its image; it reduced dispensing errors and increased the space available for dispensing and checking. Ref: Franklin BD and O’Grady K (2006) Evaluating a dispensing robot in a UK hospital. Abstract presented at the UKCPA/GHP conference, Heathrow, 12–14 May 2006
4. Making it happen: action in 2007 We have recommended that the GS1 System should be used for coding in healthcare, both by manufacturers of medicines and devices, and by NHS organisations. This recommendation will be supported by co-ordinated action from a number of agencies. A short summary of the key points is presented here. The full programme is set out in ‘Coding for Success’. Supporting improvements in coding in industry The NHS Purchasing and Supply Agency will be working with both the medicines and devices industries to increase the range of products with appropriate GS1 codes. Supporting improvements in coding in the NHS Coding systems are just one tool that can help to improve patient safety. The National Patient Safety Agency has a major programme of work on patient identification that shows how coding can be incorporated effectively into patient care. In 2007 this will include a Safer Practice Notice on the WP6 Business Case – D.3
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standardisation of wristbands, and a draft standard for the NHS Information Standards Board on patient identifiers for identity bands. Connecting for Health has a key role to play in supporting NHS organisations in implementing coding solutions. In 2007 this will include: • working with GS1 to enable any NHS organisation to become a member of GS1 and to access technical support for using its coding standards; • establishing demonstrator projects in a variety of settings; and • developing a draft NHS Information Standards Board Framework Standard for the use of coding.
5. Where can I find out more? For a copy of the full document Coding for Success: Simple technology for safer patient care www.dh.gov.uk/PublicationsAndStatistics/Publications/PublicationsPolicyAnd Guidance/PublicationsPolicyAndGuidanceArticle/fs/en?CONTENT_ID=4143009&chk=bTfZrI Department of Health (DH) (policy on automatic identification) Dr Helen Lovell,
[email protected] Connecting for Health (CfH) (development of demonstrator projects and links to GS1)
[email protected] NHS Purchasing and Supply Agency (PASA) (contracts for supply of healthcare products) www.pasa.nhs.uk/PASAWeb National Patient Safety Agency (NPSA) (guidance on improving the safety of healthcare) www.npsa.nhs.uk GS1 (Standards organisation, working with CfH to support NHS organisations) ww.gs1uk.org/ © Crown Copyright 2007
Reproduced by the kind permission of the Department of Health, UK.
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APPENDIX 5
AIDC and Traceability Case Studies in Healthcare (as extracted from the UK Department of Health “Coding for Success” policy document.) Case Study: Decontamination: The Royal Free Hospital NHS Trust The Royal Free have laser etched all their instrument trays with a unique bar code according to GS1 standards. They have also taken this one step further and etched the instruments used for neurosurgery. They are able to track and trace these individual instruments to the use on any one patient. Individual surgical instrument marking is widely thought to be the most effective way to track and trace surgical instruments that have been used for procedures with a high risk of vCJD and other prion infections Case Study: Use of automated dispensing system at the Charing Cross Hospital. The Charing Cross Hospital installed a Swisslog Pack Picker automated dispensing machine in the pharmacy in winter 2003/4. Its impact on a range of outcome measures was assessed through a before-and-after study. Dispensing errors were found to reduce from 2.7% to 0.9% Time taken to pick items was significantly reduced Stock control was improved, with fewer items ordered outside the normal order and fewer items supplied as ‘to-follow’. There was a dramatic improvement in stock discrepancies There was a 23% increase in storage capacity. The system had no impact on time taken for labelling and assembly of prescriptions, and no change in turnaround time for discharge prescriptions Staff felt that the Pack Picker had helped the department keep pace with change and enhanced its image, it reduced dispensing errors and increased the space available for dispensing and checking. Ref: Franklin BD and O’Grady K (2006). Evaluating a dispensing robot in a UK hospital. Abstract presented at the UKCPA/GHP conference, Heathrow, 12-14 May 2006. Case Study: Cardiac Catheter labs - Leeds Teaching Hospitals NHS Trust There are five theatres, called cardiac catheter laboratories, which deal with speciality heart treatments using catheter technology. They are located together within The Leeds Teaching Hospitals NHS Trust, based at the Leeds General Infirmary site. These five catheter labs are supported and supplied by a theatre central store and the supplies team. The new system, incorporating bar code scanning, and new service arrangements between supplies and the catheter lab clinicians was implemented in the catheter labs at end of 2000/beginning of 2001. The catheter labs are now operating with a stock level of approximately £700k (where previously they were 1.6million), consisting of 983 products lines. The average spend per day is £30k, which amounts to approximately 4.5 weeks cover and 11 stock turns per year. Previously two grade H nurses, who were responsible for the stock management within the catheter labs, raised orders twice daily on a paper-based system. Now orders are place twice weekly on an electronic system reducing staff time dramatically and reducing the costs of the purchasing process from up to £7.05 per line to 39 pence. During the implementation stage the supplies team carried out a full stock check. This enabled the supplies team to assess whether the levels of stock were accurate and still required. £200K of stock was identified as “no longer in use” and written off. Within the new arrangement the supplies team now manage the stock in the theatre central store. The clinicians take the products as required for the planned operations into the catheter labs, using a carousel trolleys, for high usage products. The free movement of catheters and stents within the lab WP6 Business Case – D.3
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environment enables the consultants to have immediate assess to the product range at the patients side. These products are still on stock in the inventory system until they are used during an operation, at which point they are immediately bar code scanned by the clinical staff to provide a “real time” picture of stock levels. The new systems have allowed information to not only be scanned into the stock inventory system but into the patient’s electronic record, and the finance database. This ensures that every piece of equipment can be traced to every patient and an accurate costing of all procedures can be established. The supplies team are now planning to implement a similar system in an elective orthopaedic surgery centre (Chapel Allerton). Here the scanning process will not only update patient records, the inventory and financial systems, but will also link to the National Joint Registry where appropriate. Case study: NJR and bar coding The National Joint Registry (NJR) records all hip and knee replacements. There is a minimum data set required consisting of the patients operation details. There is a further subset of data which is can be collected which includes, surname, forenames, DOB, home postcode and the NHS number. Several data entry tools have been developed to help staff enter data more easily with the benefits of relieving hospital resource effort and promoting good quality data capture. This includes a barcode reader and bulk upload facilities. The barcode reader facility allows hospitals to automatically enter implant details into the NJR by scanning the barcodes on component packaging. Scanning implants barcodes avoids having to manually input data and aids component identification, saving data entry time. Once the hospitals system has been made compatible, data is transferred to the NJR via a new user account on the NJR data entry system. A bulk upload facility allows hospitals that are already collecting NJR data in their own IT systems, to transfer it to the NJR database as blocks of multiple data records at regular intervals. Bulk upload avoids having to enter the data twice and hence helps to preserve data quality whilst saving time. Each NJR-registered hospital is eligible to receive a barcode scanner. The NJR data entry system recognises the majority of barcodes from leading component suppliers, however, some barcodes may not be recognised. The NJR is working closely with all UK suppliers to incorporate as many component barcodes as possible Case Study: Use of RFID tags for patient identification at the Birmingham Heartlands Hospital An RfID tagging system has been implemented at the day case unit at the Birmingham Heartlands Hospital, to improve safety and efficiency as patients go through surgery. Patients have a digital photograph taken when they are admitted to the unit, which is embedded in their electronic patient record. They are given a wristband with an RfID tag which contains their identification details. Clinicians on the unit have PDAs containing details of the day’s operating list. These are connected through wireless (WiFi) technology to the hospital computer system. Whenever a patient’s record is accessed the patient’s photograph is displayed to aid identification. The PDA prompts the clinician to carry out the pre-op checks, and the WiFi technology enables patient records to be updated in real time. A ‘traffic light’ system is used so that anyone can see at a glance which patients are ready for theatre. When the patient is taken to theatre the RfID tag in their wristband is detected by a sensor on the door, which triggers the relevant patient record to be displayed on the theatre computer screen. The surgeon completes final checks before proceeding with the operation.
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If a biopsy is taken during surgery, the system can generate a pre-printed label with the patient’s unique identifier encoded. The system has saved time and enabled more patients to be treated on each list. As a result, cost savings are estimated at £270,000 per year. Patient satisfaction is high, with patients happy to be photographed and tagged as a means of ensuring they receive the right treatment. The Trust has now decided to invest in the system throughout all its theatres. Case Study: Right Patient, Right Blood - Oxford Radcliffe Hospital The Serious Hazards of Transfusion (SHOT) annual report published in 2002 recommended the evaluation of computerised transfusion aids and barcode technology for confirmation that the correct blood is administered. In the period 1996 to 2005, SHOT reported 22 deaths and 94 cases of major morbidity due to incorrect blood component transfusion. The haematology department at the Oxford Radcliffe Hospitals developed, tested and are in the process of implementing a Trust-wide electronic clinical blood transfusion management system involving barcode patient identification. Hand-held computers are used to prompt clinical staff through each step of the transfusion process, including blood sample collection, removal of blood units from blood fridges and blood administration, and to check that the right patient receives the right blood. Each patient’s first name, surname, date of birth, gender and hospital number are included in a twodimensional barcode on their wristband. The handheld computer is attached to a bedside portable printer to generate a label containing these details for the blood sample. The laboratory scans the barcode on the blood sample to enter the patient’s details into the laboratory IT system. After laboratory testing, labels are printed and attached to the blood units for the patient; each label contains a barcode incorporating the patient’s identification details and the unique identification number for the blood unit. Blood collection from blood fridges is electronically controlled; the staff collecting blood are required to bring a ‘pick up slip’ with the patient’s bar coded identification details generated from their wristband. Before administering blood, a member of staff, using a hand-held computer, is prompted to make a series of checks and scans on the barcodes on the wristband and the blood. If the blood is not the correct match, the computer indicates “Do Not Transfuse” and sounds an alert. There have been multiple benefits from implementation of this technology, including a reduction in the time and number of members of staff involved in the transfusion process. Before, there were two members of staff checking two wrist bands and there were 27 steps to go through. Now only one member of staff is required, checking one wristband and there are 16 steps. This takes half the time, and staff have confidence that the process is carried out correctly every time. New UK Blood Safety and Quality regulations include rigorous traceability requirements for each blood unit are readily delivered by downloading data from the handheld computers on each transfusion; the new traceability requirements are extremely difficult to achieve with paper-based systems. As well as producing improvements in patient safety and compliance with new regulatory requirements, the costs of implementation of the electronic transfusion system throughout the Oxford Radcliffe Hospitals NHS Trust of £1.5 million over 5 years are anticipated to be recouped by reducing blood usage. This will be achieved by providing clinicians with a ‘decision support’ tool for appropriate blood use. Up-to-date blood count data are provided on the handheld computers using a Trust-wide wireless link to the pathology IT system. This initiative has been part of ‘Do Once and Share’ and ‘Right Patient – Right Blood’ initiatives, in collaboration with Connecting for Health (NHS CFH) and the National Patient Safety Agency (NPSA). The electronic clinical blood transfusion management system will now be piloted in other NHS hospital Trusts
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Appendix 6 Press Report – New Zealand’s bar code Initiative The following has very recently been reported: Govt group appointed to improve safety in hospitals Posted at 8:36am on 02 Feb 2007 The government has appointed a group to lead a drive to improve safety in hospitals. Health Minister Pete Hodgson has revamped a former committee into what is now called a Quality Improvement Committee: it aims to reduce errors estimated to cost hundreds of millions of dollars a year and improve the quality of healthcare generally. He says the committee will focus on innovation and cooperation to cut errors and boost sector productivity. Health & Disability Commissioner, Ron Paterson, says it's a chance to publish information about how hospitals are doing and is a step in the right direction. The Quality Improvement Committee is headed by Pat Snedden, the chair of Counties Manukau District Health Board, who says it will aim to make the system easier for patients. Radio New Zealand News' Health Correspondent reports that it is a long-awaited move: nearly 13% of patients admitted to hospital will suffer what's known as an adverse event, or error, including death and disability; in mistakes that cost hospitals 30 cents of every dollar they spend. One of the group's early priorities is likely to be deciding whether all medicines should be bar-coded: 17% of all inpatients experience medication errors. Health Ministry advisers are also likely to study bar-coding of medicines to ensure the right person gets the right drug. The committee is to have its first meeting in two weeks. Copyright (c) 2006 Radio New Zealand
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