2011 EDITION

HEALTHCARE SUPPLY CHAIN PLAYBOOK

Creating more efficient and agile supply chains

Shipping strategies for global expansion Navigating the temperature-sensitive chain New tools, tactics and technologies for real-time control Best practices for global compliance Pharmaceutical, biologics, medical devices

Sponsored by UPS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

2 / 40

CONTRIBUTORS
3 4
A list of experts contributing to this playbook

INTRODUCTION
Re-thinking your supply chain

FEATURES
7 10 13
Weighing cost against value for healthcare logistics Coping with exponential growth of global shipping regs New technologies for protecting product integrity

SPECIAL SPONSORED SECTION

15 21 24 26
Sponsored by UPS

UPS multi-modal capabilities uniquely suited to healthcare logistics Contingency planning tips for healthcare manufacturers Case study: Volcano eruption sets UPS healthcare contingency planning into motion UPS unveils new cold chain container solution Whiteboarding: A tool for involving multiple stakeholders When to use active packaging components Testings role in package development and compliance Package testing options

29 30 33 38

HEALTHCARE SUPPLY CHAIN PLAYBOOK

3 / 40

CONTRIBUTORS
ED ChURCh

The following experts contributed to this playbook

DAwN KREUz
Senior Stability Coordinator, Merck

President, International Safe Transit Association (ISTA)

JIm LUCIE
Senior Material Control Manager, AMAG Pharmaceuticals

GEOFFREy GLAUSER
Consultant, Health & Human Services, U.S. Government

KEvIN ODONNELL
Senior Partner, Exelsius Cold Chain Management

PAUL hARBER
Principal, Modality Solutions LLC

GARy hUTChINSON
Principal, Modality Solutions, LLC ( formerly of Amgen)

HEALTHCARE SUPPLY CHAIN PLAYBOOK

4 / 40

INTRODUCTION

By Steve Sterling, Contributing Editor

Pharmaceutical, biologics, and medical device manufacturers have a common objective: deliver the right life saving product to the right place at the right time in the right condition to have the best patient outcome. To achieve that effectively, companies are learning the value of aligning their global supply chain strategy with their corporate strategy, working collaboratively with all supply chain stakeholders, and applying a new generation of best practices. This is all the more important given that two-thirds of Healthcare Packaging readers revealed in a recent survey plans to increase the number of countries theyre shipping to (see chart, p. 6.) And a recent healthcare supply chain survey from UPS reveals that healthcare companies plan to increase the number of direct shipments to healthcare providers and retailers (see chart at right).

Re-thinking your supply chain

STRATEGY CHANGES IN THE NEXT 18 MONTHS

Plan to keep the current balance of these strategies the same Increase the use of direct shipments to providers & retailers Increase the use of wholesalers/ distributors Increase the use of direct shipments to patients

50% 22% 15% 7%

Multiple responses permitted

Source: UPS 2011 Pain in the (Supply) Chain survey 250 respondents

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

5 / 40

Re-thinking your supply chain

To comply with a host of country-specific trade regulations and compliance requirements, manufacturers are recognizing the need to work with logistics partners on the development of proactive solutions that ensure regulatory compliance while simultaneously protecting product integrity. The current pharmaceutical supply chain worked well when the blockbuster paradigm prevailed, says Wynn Bailey, head of supply chain strategies, PricewaterhouseCoopers International Limited (PwC). But pharmas focus in a post-health reform world is shifting from products to patients, and supply chain processes need to adopt the speed and agility of other, more consumer-oriented industries such as consumer electronics and mass retailing. As pharmaceutical, biologics, and medical device manufacturers move forward to align their supply chain strategy with their corporate strategy, they will be taking great strides to assure proper delivery of their products, improving the health of patients as well as their own fiscal well-being.

HOW MANY COUNTRIES DO YOU SHIP TO?

9 or fewer 10 to 19 20 to 29 30 to 49 50 or more

42% 22% 11% 7% 18%

Source: Healthcare Packaging Survey, September 2011 130 respondents

Efficiency is the name of the game and the adoption of a more collaborative approach could just be the key to unlocking this potential, says Jo Pisani, partner, global pharmaceuticals and life sciences at PricewaterhouseCoopers, in a recent news release. Working with others accelerates and facilitates innovation, discovery and development, which in turn can reduce costs and benefit both large and smaller companies. Even small changes could yield significant savings.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

6 / 40

Re-thinking your supply chain

Companies that put a high degree of conscientious effort into their processes and procedures are the industry leaders, according to Kevin ODonnell, Senior Partner, Exelsius Cold Chain Management. These organizations set the pace for everyone else because they make sure they have control over their processes, map their distribution environment, understand their logistics process, and have robust quality management systems in place with their service providers and all of the partners in their supply chain. They audit processes and have standard operating procedures and service level agreements in place.

HOW MANY ADDITIONAL COUNTRIES DO YOU PLAN TO SHIP TO?

(in the next 12 months)
Up to 50% increase in the number of countries Up to 10% increase in the number of countries

4%

34%
No increase

44%

17%

1%

Up to 25% increase in the number of countries

More than 50% increase in the number of countries

Source: Healthcare Packaging Survey, September 2011 130 respondents

To help you re-think your global supply chain strategy, we have interviewed industry experts from across the healthcare supply chain for best practices and pitfalls to avoid. Weve also included benchmark research from Healthcare Packaging readers on the state of their supply chains, supplemented with benchmark research from UPSs own annual Pain in the (Supply) Chain survey results. We hope you find the information in this playbook actionable and useful. Thanks for reading.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

7 / 40

Weighing cost against value for healthcare logistics

There are three components that comprise a companys business objective in terms of the logistics process: improving service levels, reducing supply chain cost, and reducing capital needs. By examining options available to reduce transportation cost, reduce inventory levels, optimize the distribution network, improve the ability to forecast accurately, and improve core processes, companies are prepared to develop the supply chain solution that best suits their goals. As companies assess where logistics cost improvements can be made, they learn the limitations of traditional thinking that merely looked to suppliers for cost reductions. They become aware that by not changing the fundamental way they do business, they miss the opportunity to create a long-term sustainable solution that would have long-term benefits to the business. One of the most important steps that manufacturers logistics partners can take is to establish written Standard Operating Procedures and Quality Agreements, says Paul Harber, principal at Modality Solutions LLC. It is vital to link up regulatory affairs and quality assurance teams with a manufacturers quality assurance organization. This enables the kind of information sharing that provides for best practices in the solutions creation. It is also important to establish a quality agreement between the supply chain logistics partners and the manufacturer for how the shipper is

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

8 / 40

Weighing cost against value for healthcare logistics

going to move the product, how it will control it in transit, and to have spelled out all the specific requirements associated with that product, including the development of contingency plans that can be executed if a shipment needs to be diverted.

MOST PRESSING SUPPLY CHAIN ISSUES

2011
Regulatory compliance

2010

2009
60% 73%

Managing supply chain costs

64% 64% 55% 40% 61%

Product security

56% Gary Hutchinson, formerly with Product damage or spoilage 29% 42% biotech giant Amgen and currently principal at Modality Solutions 40% Access to global 40% or emerging markets LLC, explains, The involvement 18% of quality assurance has become 29% Changing distribution and 26% go-to-market channels even more prevalent with the 12% Meeting customers changing growing number of biologics Multiple 42% demands for services responses products reaching the market as Product tampering permitted 34% or counterfeiting well as the increasing stringent Source: UPS 2011 Pain in the (Supply) Chain survey 250 respondents regulatory requirements. For example, the Food & Drug Administration now requires that the temperature on the product must be maintained throughout the transportation cycle. Manufacturers have learned that it only takes one temperature excursion to put shipments worth millions of dollars on hold until further analysis is done. With a thorough understanding of what needs to be done throughout the supply chain to protect the product, companies can ensure the efficacy of the product.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

9 / 40

UPS and the Logistics of Healthcare

At UPS, we understand its a patient, not a package: someones health depends on your companys healthcare supply chain. Hear from our team of experts on what sets us apart.

Weighing cost against value for healthcare logistics

Opportunity costs
While managing logistics costs are essential, so too is understanding and evaluating opportunity costs. Reaching specific markets while theres demand, the impact of being late to market, the value of being a first mover in that market, and the value of brand integrity all need to be factored into logistics cost discussion. Jim Lucie, senior material control manager, AMAG Pharmaceuticals, notes, Strategies will differ depending on the value of your shipment. In some cases the lowest shipping cost may not provide the most value. For example, we have low volume, high value shipments, which means spending several thousand dollars to ship multi-million orders enables us to minimize risk and optimize our market opportunity.

Video: Trends in Healthcare Logistics

John Menna, Director of Global Strategy, UPS Healthcare Logistics, discusses insights from UPSs 2011 Pain in the (Supply) Chain Survey.
thenewlogistics.com/healthcaretrends

Video: Tour a UPS Healthcare Facility

Take a tour led by our team of experts.
thenewlogistics.com/ healthcaretour

thenewlogistics.com/healthcare

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

10 / 40

Coping with exponential growth of global shipping regs

To date there are thousands of different regulations, guidance, and best practice documents that have been administered by the health ministries of specific countries, industry associations, or global non-governmental organizations such as the World Health Organization or the Centers for Disease Control and Prevention. World events such as 9/11, which resulted in 26 new regulations affecting organizations that import or export to the United States, have added additional complexity.

GREATEST BARRIER TO PROVIDING QUALITY AND AFFORDABLE HEALTHCARE

Changing/increasing distribution guidelines

6%
Changing/increasing manufacturing guidelines

9% 12% 47% 20%

Limited global infrastructure

Changing/increasing customs laws for raw materials and export of healthcare meds/devices

Changes in healthcare legislation/healthcare reform

Source: UPS 2011 Pain in the (Supply) Chain survey 250 respondents

Recent research from UPSs annual Pain in the (Supply) Chain survey indicates that changes in legislation in general, and changes in customs laws in particular, are among the top concerns of healthcare products manufacturers. And (See charts accompanying this story.)

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

11 / 40

Coping with exponential growth of global shipping regs

Changes within the industry, like the advent of biologics and medical devices, result in the ongoing revision of the regulatory documents, according to Kevin ODonnell, senior partner, Exelsius Cold Chain Management. There has been increased scrutiny on the part of global regulators of both the supply chain and the amount of drugs entering this particular sector.

HIGHEST BARRIERS TO GLOBAL EXPANSION

Country regulations Intellectual property protection Quality of products produced in-country Product security Limited infrastructure Managing multiple logistics providers Managing global suppliers

42% 31% 29% 26% 24% 13% 13%

Multiple responses permitted

Since global compliance and Source: UPS 2011 Pain in the (Supply) Chain survey 250 respondents regulatory constraints are an ever changing landscape, they must be managed continuously, says Gary Hutchinson, formerly with Amgen and currently principal at Modality Solutions. Additionally, with the wide variation in the rigidity of controls among countries, manufacturers face the challenge of putting in the necessary levels of controls and monitoring to achieve compliance as well as to assure product integrity, without adding cost by over engineering their processes and procedures. Manufacturers may enter a new country and not understand all the regulations that are associated with transporting and storing products in those countries. Logistics partners can play a key role in expediting global supply chain logistics by providing trade management

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

12 / 40

Coping with exponential growth of global shipping regs

solutions. With the processes and procedures in place to stay informed of the current regulations and requirements, logistics partners can assure companies that their products are in compliance.

RATE THE IMPORTANCE OF SUPPLY CHAIN COMPLIANCE

Of utmost importance Important

45% 52% Dawn Kreuz, senior stability coordinator, Merck, explains, Considering the ramifications of the global supply chain, logistics 3% partners play a vital role because 0% they have a comprehensive view Somewhat important Not important of the overall picture and know Source: Healthcare Packaging Survey, September 2011 130 respondents what is occurring in this ever changing environment. They have put together the resources so they can collaborate with customers and provide real time information on regulations and what is happening in individual shipping lanes.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

13 / 40

New technologies for protecting product integrity

Since biologics have radically different a molecular profile, they are more sensitive to temperature, pressure, shock, and vibration.
Protecting the integrity of pharmaceutical, biologics, and medical devices entering the global market has been enhanced by advances in the flow of information. Manufacturers have moved from knowing when the product should arrive, to knowing what is actually going on with a shipment in transit through tracking and tracing capabilities, and they are beginning to implement technologies that enable them to know what is going on inside the shipment and intervene if necessary. Leading logistics partners are actively engaged in introducing GPS Global System for Mobile Communications (GSM), a solution that will allow the shipper to monitor a container and its products. Not only will this solution enable geographic location monitoring 24/7 by using a GPS transmitter, but by using sensors on the inside of the container the company can also monitor the temperature, the condition of the batteries that are running the fans inside the container, and the condition of the panels that provide heat or cooling. This will enable the logistics partner to intervene and take action in the event that something is going wrong before the products integrity is jeopardized. Global distribution of biologics requires comprehensive documentation of the environmental and transportation rigors to which the product will be exposed. Since biologics have a radically different molecular profile, they are more sensitive to temperature, pressure, shock,

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

14 / 40

New technologies for protecting product integrity

and vibration, says Paul Harber, principal at Modality Solutions. To ensure their efficacy at point of use, knowing the precise conditions they will be subject to during transit is critical. U.S.-made medical devices entering the global market place are subject to very stringent regulations, including what happens to the device at the end of its life. Consequently, manufacturers not only have to develop the forward supply chain, but must also provide for the ongoing flow of consumables, repair or replacement parts. They must also develop a reverse logistics strategy for material that is either too valuable to be left behind in the channel once it reaches its end of life or cannot be left behind in the channel because it includes material that cannot go into a landfill.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION

15 / 40

UPS multi-modal capabilities uniquely suited to healthcare logistics

MOST IMPORTANT FACTOR IN DECIDING ON LOGISTICS PARTNER
(aside from cost)
Demonstrated expertise handling sensitive products such as pharmaceuticals, biologics, and medical devices Reliable access to the markets where I do business and intend to grow Understanding of global compliance-related logistics issues Collaborative problem solving Source: Healthcare Packaging Survey, September 2011 130 respondents

A recent survey conducted by Healthcare Packaging magazine specifically for this Playbook reveals that the most influential factor on selecting a logistics partner is demonstrated expertise handling sensitive products such as pharmaceuticals, biologics, and medical devices (see chart). For UPS Healthcare, Its a patient, not a package is more than a slogan, it is a commitment supported by an extensive strategy built on collaboration with its customers, teams of experts, and the implementation of supporting technologies to get the right life saving products to the right place at the right time in the right condition to have the best patient outcome. With 30 dedicated healthcare distribution facilities around the world, the companys unique offering integrates warehousing, distribution and transportation with compliance, packaging, monitoring technology, and intervention capabilities. UPSs continuous investment in new technologies provides customers with world-class product protection.

23% 50% 15% 12%

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

16 / 40

UPS multi-modal capabilities uniquely suited to healthcare logistics

Collaboration
Dirk Van Peteghem, vice president healthcare logistics, UPS Healthcare, explains, When we begin working with a customer, we meet with them to determine the exact protection their product needs and how we can best deliver value. It is critical for us to have a precise understanding of temperature requirements, compliance and product requirements, packaging and transportation modes, and shipping lanes, and the customers business requirements. That is the foundation of our ability to deliver value for a customer and also gain their trust in our expertise in handling their shipments. Once we have the customer requirements, our engineers develop a customer-specific solution. In some cases, we might advise customers to use different packaging given our temperature profile studies or we might advise they use different routes. We have packaging experts, transportation experts, regulatory affairs, as well as other resources that provide comprehensive insight into all aspects of developing an optimal solution. UPSs unique strength is our ability to address the four essential components packaging, monitoring, intervention and compliance required to ensure product protection.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

17 / 40

UPS multi-modal capabilities uniquely suited to healthcare logistics

Monitoring and intervention

UPS offers UPS Temperature True for air freight and UPS Proactive Response for the U.S. package network. Both services use the companys worldwide control towers to monitor shipments and most importantly intervene in the event anything goes wrong. Van Peteghem stresses, The ability to intervene is a tremendous asset and is critical IMPORTANCE OF CONSULTATION WITH LOGISTICS to the value that UPS delivers. SUPPLIER ON GLOBAL COMPLIANCE ISSUES Monitoring alone just provides Extremely data and often that data comes important Important too late. We continue to invest in expanding our control towers and also implement new technologies 49% 45% that improve our ability to intervene with the shipment if needed.

6%

UPS works with its customers to Source: Healthcare Packaging Survey, September 2011 130 respondents develop intervention plans that are customized according to what actions the customer wants to be taken. Preset actions are established. For example, the customer can request a notification phone call and make situation-specific decisions, or

Not important at all

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

18 / 40

UPS multi-modal capabilities uniquely suited to healthcare logistics

request that actual physical intervention be taken or that the product be rerouted, shipped back, destroyed, or a new product shipped. Van Peteghem reports, We are beginning to see a shift away from passive temperature data loggers, which basically record historical temperature and then present the data after the fact, to more real-time actively transmitting temperature sensors. Real-time temperature information on a shipment enables real-time intervention, which is key to success. As the technology evolves, remote, real-time intervention will be possible. This will enable us to remotely activate a container to increase the heating or cooling to prevent a shipment from going outside the temperature range critical to product efficacy. At UPS we have a team that keeps track of the latest monitoring and packaging technologies and tests them in our network so we can advise our customers on state-of-the-art developments that are beneficial to them. Given the high value of pharmaceutical, biologics, and medical devices, healthcare companies are increasingly concerned about security. Van Peteghem explains, Particularly with the high value of some biologics, we see healthcare companies need more stringent security solutions to prevent the loss of millions of dollars of product and more importantly to ensure that product efficacy is not compromised. Since we control our own network, we are able to reduce the number of hand-offs and minimize the risk of loss, theft and diversion.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

19 / 40

UPS multi-modal capabilities uniquely suited to healthcare logistics

We are seeing growing interest in emerging vibration monitoring capabilities in combination with other sensor technologies for security purposes. By combining data points from the shock and vibration, acceleration, and geofencing, which sets geographical parameters that the shipment must remain within, we have the ability to develop smart algorithms to truly interpret the data and determine if it might provide evidence of a theft situation. This is a shift from merely receiving a data feed from sensors to data feeds that are interpreted by algorithms to enable timely decision making. Matthew Connelly, vice president of network operations, UPS, says, As supply chains become more complex in nature, monitoring product shipments on a global basis is becoming an increasing need for our customers. Our global control towers, which provide monitoring and intervention capabilities, and our global transportation network make us uniquely positioned to provide exceptional product protection to meet global shipping requirements. The flexibility and capabilities of our global, multi-modal network are particularly valuable when weather or mechanical problems require us to implement contingency plans. Such plans are designed to ensure product integrity and a continuous flow of product and shipment visibility for our customers. (For more on contingency planning, see p. 21.)

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

20 / 40

UPS multi-modal capabilities uniquely suited to healthcare logistics

World-class offering
While many companies have expertise in packaging, compliance, monitoring, or intervention, UPS has the ability to provide all four. We are a one-stop shop, states Van Peteghem. We have packaging experts, we have the monitoring capabilities in our control towers worldwide, we have dedicated Quality Assurance and Regulatory Affairs experts globally, and we have the intervention capabilities to provide our customers with an optimal solution. In addition, we offer training for our employees on proper handling of our customers products. It is critical to us that our healthcare employees worldwide have a uniform response to handling technologies, reading data sheets, and reacting to adverse events. Aware of the changing needs of its healthcare customers, UPS is constantly evaluating and investing in technologies to ensure that its customers benefit from leading edge solutions. Partnering with its customers, the company has gained the insight into the challenges they face and their concerns in serving the global market. By implementing proven packaging solutions, monitoring technology, and intervention capabilities and continuously evaluating opportunities and products to improve its ability to ensure product protection, UPS has transformed its Its a patient, not a package motto into a company- wide way of life.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION

21 / 40

Contingency planning tips for healthcare manufacturers

HAVE YOU EXPERIENCED SHIPPING DELAYS OR DISRUPTIONS DUE TO NATURAL OR MAN-MADE EVENTS?
(in the last two years)
Yes

Natural or man-made events can and do cause disruptions to shipments (see chart). The key way to counter such disruptions is to actually plan for them. When UPS works with its customers to develop contingency plans, it begins by validating a customers key requirements for their shipments. Since customers have different priorities for shipments when a contingency situation arises, factors like speed, time in transit, service, maintaining the temperature of healthcare products, and costs need to be clarified. The ideal situation is to have a defined communication tree and plan to facilitate real-time connections to the right decision makers. A proper line of communication ensures validation of any new requirements so that customers needs can be met. Our unique value is that we are a multi-modal provider, offering a full suite and complement of transportation services and modes, notes Matthew Connelly, vice president of network operations, UPS. We have a very large airline, robust small package capabilities as well as truckload and less-than-truckload services. Add to that, a large forwarding component where we can also utilize other airlines and cargo carriers as well as ocean capabilities, and we have the flexibility in place to easily adjust for contingency situations.

44%

56%

No
Source: Healthcare Packaging Survey, September 2011 130 respondents

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

22 / 40

Contingency planning tips for healthcare manufacturers

Customers can facilitate the development of a contingency plan by having a defined communication flow within their organizations so that the plan incorporates key touch points. By providing their logistics partner with their critical requirements in a contingency mode, in priority order, the plan can be constructed to meet those needs. Connelly reports, One of our value adds is that we provide our customers very good visibility of shipments within our network and that is a critical operational necessity in a contingency situation.

Healthcare supply chain contingency planning

Healthcare manufacturers have unique needs in a contingency situation that focus on maintaining service to meet the critical needs of patients and ensuring that product handling requirements are met so product efficacy is not compromised. With a high level of visibility into each shipment, UPS knows what is on a shipment and where that shipment is at all times. Connelly says, UPS has additional oversight that strictly monitors key healthcare shipments. We have a network of control towers globally, which are actually large oversight operations that monitor the movement and flow of our healthcare customers shipments. The control towers operate as a global network for visibility and intervention capabilities to cover all time

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

23 / 40

Contingency planning tips for healthcare manufacturers

zones and regions. They are extensive operations where real-time information is available on world news and weather situations as well as multiple-screen tracking of shipments. This is a specially-trained contingency group that can respond in real time to a healthcare shipment that is in distress due to weather or mechanical breakdown of an aircraft or truck. The group is able to respond and execute the contingency as well as to have alignment with the customer for communication. By developing a contingency plan that provides visibility of the shipments at all times, a clearly defined communication tree so that the right people with the right skill sets are engaged globally, and a design that is flexible and nimble, healthcare product manufacturers can be assured that they have taken a sound, proactive step to preparing for potential situations that might jeopardize their shipments. In addition, by leveraging UPSs integrated multi-modal capabilities and extensive shipment visibility, manufacturers can make a quantum leap in creating a world-class contingency plan.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION

24 / 40

Case study: Volcano eruption sets UPS healthcare contingency planning into motion
When Eyjafjallajkull, Icelands most active volcano, erupted in April 2010, causing disruption to air travel in North and Western Europe, UPSs contingency plan that leveraged its multi-modal capabilities and extensive shipment visibility technologies enabled it to minimize the events impact on customer shipments. The situation demonstrates the importance of having a well-constructed contingency plan to ensure that products reach their destinations in spite of unexpected situations that could potentially jeopardize delivery. Matthew Connelly, vice president of network operations, UPS, explains, When the volcano erupted, we moved our hub operations from Cologne, Germany, to Madrid, Spain where we set up a temporary hub. We were able to divert our aircraft and network to operate out of Madrid. Our ability to shift our operations quickly enabled us to effectively alter our air network and continue to service our customers. Our multi-modal capabilities enabled us to shift modes of transportation because we operate one integrated network, while other carriers operate separate networks for each mode.

Photo courtesy of NASA

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

25 / 40

Case study: Volcano eruption sets UPS healthcare contingency planning into motion

Although the volcanos eruption wreaked havoc on the express trade lane in and out of Europe for most carriers, our express shipments for southern Europe werent impacted at all and the express shipments for northern Europe might have had one additional day of transit because they had to be truck fed up from Spain. Essentially we were able to maintain seamless shipping into and out of Europe and meet the needs of our customers supply chains in very unusual circumstances. Shifting a hub requires broad, multi-level coordination. It includes everything from filing flight schedules, making sure ground support is available to off load the planes, repair and maintain aircraft, setting up a new truck network to feed out of the alternate location, and ensuring that customs brokerage is in place. Our contingency plan solution was extremely well received by our customers and it really shows the advantages of our fully-integrated, multi-modal capabilities. It also demonstrates our ability to take the steps needed to shift an operation as well as design a new operation (new truck schedules, aircraft routings) and bring all those capabilities together.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION

26 / 40

UPS unveils new cold chain container solution

UPS offers an innovative air freight container for healthcare products, providing an unparalleled level of shipment monitoring and product protection for temperature-sensitive pharmaceuticals, vaccines and biologics. Only available through UPS, the PharmaPort 360 addresses a key industry issue of safeguarding healthcare shipments in the supply chain by enabling near real-time monitoring and maintaining product temperatures in extreme outside conditions. Amid the tremendous surge of temperature-sensitive therapies coming to market, its critical to have the most reliable solutions in place to help ensure the safe supply of healthcare products while also driving cost and operational efficiencies for healthcare manufacturers, said Mark Davis, product manager, UPS Healthcare Logistics.The stakes are high when theres a patient at the end of the supply chain, and UPS strongly believes that the PharmaPort 360 will ensure better protection of potentially life-saving therapies. Manufactured by Cool Containers, LLC for UPS, the PharmaPort 360 is designed with input from both the life sciences and transportation industries. The unit is fully validated and tested and exceeds rigorous healthcare industry standards for temperature-sensitive compliance during transportation.

WATCH VIDEO

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

27 / 40

UPS unveils new cold chain container solution

The PharmaPort 360 container maintains strict temperatures by utilizing both heating and cooling storage technology, allowing it to tolerate a significantly wider range of extreme ambient temperature changes. The container more effectively maintains temperatures critical for protecting medicines that need to stay within the required 2-8C to prevent spoilage. The PharmaPort 360 also sustains its protective temperature range for more than 100 hours, which is an important factor as more supply chains extend globally and healthcare products need to travel farther to reach markets. The containers temperature control and monitoring systems are powered by an AC rechargeable battery. The units technology replaces the need for dry ice, thus eliminating the associated handling fees and hazardous materials charges. Also, the PharmaPort 360 will hold critical 2-8C temperatures 38 percent longer than current dry ice container solutions. Unlike other containers on the market, the PharmaPort 360 has built-in sensors that not only monitor shipment condition and GPS location but transmit this data to UPSs global control towers via GSM, a standard global cellular network. Agents proactively monitor the container for select heartbeats such as internal and external temperatures, near real-time location and battery life. When alerts are triggered indicating a potential risk, UPS agents can intervene with pre-established contingency plans to rescue a shipment in distress and prevent product loss.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

SPONSORED SECTION
continued

28 / 40

UPS unveils new cold chain container solution

Product losses from temperature excursions and mounting scrutiny from regulatory authorities are pressuring healthcare companies to strengthen supply chain compliance and gain more control through shipment data, Davis added. Having the information to prove that the integrity of a vaccine or human tissue has been preserved in-transit, for example, is almost as critical as the contents of the package. The PharmaPort 360s unique design also allows for more flexibility for flight options.While in transit mode, the container neither consumes energy nor emits external heat, vapor or gasses, allowing the unit to fly in both upper and lower deck aircraft positions. This offers more routing options, especially in constrained transportation lanes. The Federal Aviation Authority also has approved the PharmaPort 360 to fly on both narrow-body and wide-body aircraft, allowing for a high degree of flexibility in flight selections and opening access to markets globally. As a part of UPSs latest temperature-sensitive capabilities, the PharmaPort 360 is available exclusively through UPS Temperature True, a service designed to safeguard temperaturesensitive shipments. The service includes priority routing of shipments, temperature-sensitive handling and storage, around-the-clock proactive monitoring and intervention services in the event of unexpected delays.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

29 / 40

Whiteboarding: A tool for involving multiple stakeholders

When companies move to expand globally, they often build the supply chain to support the business strategy. By involving all of the key stakeholders in a white boarding session, the requirements of everyone involved in the supply chain are documented and addressed. This enables every stakeholder to understand that the supply chain is not just product moving in a linear direction, it is actually a flow of goods, funds, and information that has to be carefully managed and balanced. The diagram of the interactions from a white boarding session demonstrates the needs of point of care, point of use of the product, and how all the needs come back through the supply chain to affect all of those involved in the supply chain. This foundational level of knowledge is the first step for understanding fundamental requirements where efficiencies are possible. Kevin ODonnell, senior partner, Exelsius Cold Chain Management, stresses, Everyone involved in the lifecycle management of healthcare products needs to be involved to ensure that the product to its point of use creates a contiguous supply network thats collaborative and emphasizes preventive measures to protect the quality of the drug.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

30 / 40

When to use active packaging components

Industry wide, a trend towardthere is using real-time actively transmitting temperature sensors.
Across the pharmaceutical and medical device industries, its common for products to be packaged in passive thermal containers because they are economical and provide product protection. However, the introduction of biologics, which are increasingly temperature sensitive, and the shift to real-time monitoring, has led to the development of active thermal packaging. Gary Hutchinson, principal at Modality Solutions, LLC, says, Manufacturers continue to invest in the development of packaging innovations that minimize the need for intervention to protect pharmaceutical, biologics, and medical devices. This has led to a move from passive systems, which rely on gel ice, polyurethane, and vacuum panels, to active systems. Active systems generally use sensors to monitor a package a thermostat connected to an outside power supply regulates upper and lower temperatures. Active systems provide alerts if parameters are exceeded, ensuring immediate intervention without breaking the chain of custody since the packages do not have to be opened for intervention. While an active packaging system has to be validated just like a passive system, it provides tight control and minimizes supply chain security issues. Industry wide, there is a trend toward using real-time actively transmitting temperature sensors, says UPSs Dirk Van Peteghem, vice president healthcare logistics. Unlike passive temperature data loggers, which basically record historical temperature and then present the data after delivery, real-time temperature information enables real time intervention, which is

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

31 / 40

When to use active packaging components

critical for protecting the product. This technology continues to evolve and in the future remote, real-time intervention may become a reality.

WHAT NEW SUPPLY CHAIN TECHNOLOGIES ARE YOU INVESTING IN?

(currently and next 12 months)
Real-time monitoring

25%

Hutchinson of Modality Solutions Track-and-trace 32% adds, Phase change materials, in which heat is absorbed or released Time/temperature tags 21% when the material changes from inside packs solid to liquid and vice versa, Temperature-protective packaging (gel packs, 25% are another packaging option. cooler packs) Although they are costly for single Sustainable packaging 32% use applications, in multiple use applications, they can be cost Source: Healthcare Packaging Survey, September 2011 130 respondents effective. The challenge with multiple use is reverse logistics. The material has to be returned, so shipment costs and the expense of validating that the material is still effective needs to be considered. The ability of new packaging materials to provide different degrees of insulation enables manufacturers to select the best solution for their needs, according to Geoffrey Glauser, Conceptual Mindworks, Inc., consulting to the Biomedical Advanced Research and Development Authority, U.S. Dept. of Health & Human Services. He continues: Expanded polystyrene might give an R factor of 2 to 3.5; if you require greater insulation, polyurethane

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

32 / 40

When to use active packaging components

packages can provide an R value of 2.5 to 4.5. Although the R values of vacuum insulated panels start at 40, they are more costly. Dirk Van Peteghem, vice president healthcare logistics, UPS Healthcare, reports, Coupled with the need for strict temperature control, healthcare companies are also interested in technologies to address theft and security concerns. There is growing interest in smart algorithms that interpret data points from things like shock, vibration, acceleration, and geofencing which is tracking if a shipment goes out of its expected route to assess evidence for determining possible theft situations.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

33 / 40

Testings role in package development and compliance

There is a general rule among regulatory

authorities worldwide: if you didnt document it, you didnt do it.

With the expansion into global markets, pharmaceutical, biologics, and medical device package testing has become increasingly important as products are subjected to varying conditions en route to their international destinations. With the stricter regulatory constraints, package testing requirements are not limited to temperature, but often include vibration, humidity, pressure, and shock. By following a systematic method to document the effectiveness of packaging, manufacturers can cost effectively ensure product efficacy and meet global regulatory requirements. Having a detailed product stability profile at the outset of the packaging development process is essential because it provides the information about what the product can withstand and remain efficacious, says Geoffrey Glauser, Conceptual Mindworks, Inc., consulting to the Biomedical Advanced Research and Development Authority, U.S. Dept. of Health & Human Services. Investing in a stability study that supplies comprehensive information enables manufacturers to avoid costly over engineering because packaging decisions are made on precise data. There are three steps to developing a packaging solution. It begins with design qualification, which is not necessarily reviewed by regulatory agencies, but is the manufacturers test to see what works based on the products stability profile. It also involves researching the temperatures in the lanes through which the shipment will travel. In the second step, operational qualification, a series of tests is done in controlled testing chambers to simulate

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

34 / 40

Testings role in package development and compliance

the variables in the shipping environment. The idea is to document that the package can be handled in more extreme temperatures without jeopardizing the products integrity. Finally, in performance qualification, the product is actually shipped with temperature monitors inside the package to document actual conditions during transit. Since package performance qualification testing is controlled by domestic and international regulatory agencies, it must be performed in a structured and organized manner. The documentation, including the rigors of data and informational reports, must be available for regulatory review. Kevin ODonnell, senior partner, Exelsius Cold Chain Management, notes, There is a general rule among regulatory authorities worldwide: if you didnt document it, you didnt do it. Dawn Kreuz, senior stability coordinator, Merck, reports, The stability profiles of products have become increasingly more important because regulatory constraints are becoming more and more stringent. Having comprehensive data arms manufacturers with the documentation that is essential to answer the broad range of questions that agencies are now asking. Glauser of Conceptual Mindworks explains, The bottom line is show me the data. You have to be able to show that the method in which you are shipping temperature-controlled materials is indeed satisfactory and enables them to withstand the rigors of exposure in the various forms of transport. Regardless if the shipping method is passive, active, or semi-active, it is essential to test and gather data that proves that the material can withstand 20 or 48 or 72 or 96 hours of cold chain transport.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

35 / 40

Testings role in package development and compliance

Planning: the critical component

To avoid costly over engineering without sacrificing performance that would compromise product efficacy, the packaging solution must suit the shipping environment it will encounter. The solutions testing must be repeatable and consistent. By performing ongoing tests, quarterly or annually, and documenting the results, manufacturers can demonstrate that the effectiveness of the packaging in protecting the product and have accurate data available for regulatory agencies. The critical element in performance qualification testing, in which temperature monitors are placed inside the package next to the product, is planning, says Glauser. Before the package is shipped, information about how it will be transported needs to be gathered. Glauser says this information includes knowing ahead of time the answers to the following questions: 1. What flights it will be on 2. How long will the flights be 3. Whos going to be handling the material on the front end and on the back end from a cold chain perspective 4. Does the aircraft need to be met by refrigerated trucks 5. How much time is there between the time the aircraft lands and the material enters customs

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

36 / 40

Testings role in package development and compliance

6. Whos the customs broker 7. How experienced are they in handling temperature-controlled materials through customs 8. Do they also have to get it cleared through the local regulatory agency 9. What documents are needed from the regulatory agency in order to clear customs. Fastidious planning is the key to a successful performance qualification shipment. If you do your homework, you know that it will work. You have to have agreements with the freight forwarders and carriers and the assurance that they not only have the expertise to handle temperature-controlled materials, but that they also have intervention controls in place, and a contingency plan to address exceptions, such as a cancelled flight. Gary Hutchinson, principal at Modality Solutions LLC, adds, With the move to multimodal transportation, packaging engineers are recognizing the value of working with a knowledgeable logistics partner to develop and test new packaging technologies. Together, they are not only creating more robust packaging solutions, but they are also collaborating on the monitoring and control of packages based on the conditions the package will encounter during transit.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

37 / 40

Testings role in package development and compliance

Tomorrows cold chain will require more than cold

The 35 to 46F (2 to 8C) temperature range is a common cold chain discussion area, but temperature control in ambient and other ranges, as well as regulatory matters and evolving sectors are gaining importance in the life cycle of temperature-controlled healthcare-related products. These issues, along with cost pressures, a focus on core competencies, and virtual company models are driving an increase in outsourcing and the need for robust and transparent partnerships, says Courtney Becker-James, International Quality and Productivity Center (IQPC) The biopharmaceutical market, worldwide, is set for high growth. This growth of novel biological therapies, including monoclonal antibodies, cell therapies, cytokines, and new vaccines, is setting the scene for tomorrows cold chain, demanding an increase in specialty packaging, handling, and distribution as a result of vibration sensitivities at certain frequencies and the effects of relative humidity.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

38 / 40

Package testing options

In the logistics environment, youve

got variations in temperature, vibration, humidity, and pressure.

There are a number of resources that manufacturers can use for testing their packages effectiveness. Depending upon their packaging testing needs during various phases of packaging development, companies can leverage the expertise of logistics suppliers, independent laboratories, or qualified associations. ISTA (International Safe Transit Association), which pioneered the concept of package performance testing and certification, developed its Standard 7E protocol that is designed to evaluate the effects of external temperature exposures of individual packaged products shipped through a parcel delivery system. Ed Church, ISTA president, states, Our goal in developing the ISTA Standard 20 protocol, which includes the Standard 7E set of global thermal profiles, is to offer a design and qualification process that provides the structure and path to design, test, verify, and independently certify a specific Insulated Shipping Container (ISC) for use. In the logistics environment, youve got variations in temperature, vibration, humidity, and pressure, says Gary Hutchinson, formerly with Amgen and currently a principal at Modality Solutions. Particularly with the introduction of biologics, the ability of all factors to have some impact on the drug product itself have become an increased concern. Thats one of the reasons were investing in the development of a simulation laboratory, which will be available to manufacturers, offering dynamic testing of all variables in a controlled, simulated environment.

FORWARD

RETURN TO CONTENTS

HEALTHCARE SUPPLY CHAIN PLAYBOOK

continued

39 / 40

Package testing options

Logistics carriers such as UPS also have a wealth of package testing experience. Mark Davis, product manager, UPS Healthcare Logistics, states, At UPS we work to provide information to customers about best practices in selecting the types of packaging, including effective ways to procure materials, and we have one of the worlds best packaging testing laboratories. After a customer gives us a validated package, we do the tests to determine how the package will perform through the UPS network, through all the different sorting stations, etc.

FORWARD

RETURN TO CONTENTS

40 / 40

Thank you for downloading Healthcare Packaging's Healthcare Supply Chain Playbook! Now that you've had a chance to review it, we'd love your feedback. Share your thoughts!
POST yOUR COmmENT