USA Distribution Operations
Pharmaceutical Distribution: Ensuring
Product Integrity and Patient Safety
Mike Broughton, Distribution Operations
21st Century Transport Logistics Summit
Indianapolis, IN
19 October 2005
Strategic Questions
New
Traditional
Pharmaceutical Distribution Strategic Questions
• Is distribution a core competency at your company?
• Does the distribution of our products provide a competitive advantage?
• Are there others that could pick, pack, store and ship product cheaper?
Q: What is the strategic imperative related to
distribution?
A: Ensure product integrity to assure product
safety and patient safety
Lilly is set to open it’s new US Distribution Center in Plainfield this November!
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Company Confidential
Copyright © 2005 Eli Lilly and Company
2
Ensuring product integrity
around the globe!
Insulin Vial Supply Chain
Form Sites
Sothema, Morocco
Human, Hungary
Bulk Site
Finish Sites
End Markets
Sothema, Mor
Morocco
Human, Hungary
Hungary (U40)
Fegersheim
Giessen
RDC
U40, U100
Belgium
Germany
Netherlands
Austria
Latvia Romania
Bulgaria
Lithuania
Czech Rep. Slovenia
Bosnia & Herzegovina
Giessen
Fegersheim
Farmak
Ukraine
Philippines
Philippines
U100 & U40 – 10ml
Indianapolis
Alcobendas
Spain
Lilly Mexico
Argentina
Bolivia
Central America
Chile
Colombia
Dominican Rep
Ecuador
Australia
Belgium
Canada
Estonia
Ethiopia
Finland
Ghana
Greece
Kenya
S. Korea
Luxembourg
Malaysia
Mauritius
New Zealand
Norway
Singapore
Sweden
Taiwan
Tanzania
Thailand
Uganda
Lilly Mexico
Humulin Bulk
Crystals (BHI)
U100 10ml
Indianapolis
Lilly Brazil
Mexico
Paraguay
Peru
Uruguay
Venezuela
WIZ (in 2005)
U100 10ml
Indianapolis
Brazil
Hospira, US
U100 R (N in ‘06)
MJPL, India
= Lilly
Node
= Non-Lilly
Node
= Affiliates
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Seishin, Japan
Japan
MJPL, India
India
Lilly Egypt
Egypt
Pakistan
Bangladesh S. Africa
U40 R, N,70/30, 50/50
Lilly Egypt, Cairo
Libyan Arab Jamahirya
Algeria
Netherlands
Armenia
Nigeria
Azerbaijan
Pakistan
Bangladesh
Palestine
Bahrain
Philippines
Belarus
Poland
Botswana
Portugal
Burkina Faso
Russia
Cameroon
Cent. African Rep.Samoa
Slovakia
China
Slovenia
Congo
S. Africa
Cote D’Ivoire
S. Korea
Denmark
Spain
Djibouti
Sri Lanka
France
Svalbard & Jan Mayen
Gabon
Swaziland
Georgia
Switzerland
Hong Kong
Tonga
Hungary
Tunisia
Iceland
Turkey
Indonesia
Ukraine
Ireland
UAE
Israel
UK
Italy
Uzbekistan
Ivory Coast
Vietnam
Kazakhstan
Yemen
Kuwait
Zimbabwe
Kyrgystan
Mozambique
Nambia
Aruba
Lebanon
Bahamas
Marshall Is.
Bahrain
N. Mariana Is.
Barbados
Oman
Bermuda
Papua New Guinea
Canada
Puerto Rico
Caymen Is.
Qatar
Cocos(Keeling) Is.
Saudi Arabia
Cyprus
St. Lucia
Fiji
Syria
Grenada
Trinidad
Guam
UAE
Haiti
US
Jamaica
Virgin Is.
Jordan
Yemen
Kuwait
Kenya
U100 (4ml, 10ml), U40
Company Confidential
Copyright © 2005 Eli Lilly and Company
3
Temperature monitoring
Insulin Shipments from Indianapolis
Destination:
Columbia
Destination:
Mexico
Destination:
Brazil
Destination:
Bahrain
Securing the Supply Chain and Distribution
Institution
Institution
Wholesaler
Wholesaler
PBM/
PBM/
Mail-order
Mail-order
Pharmacy
Pharmacy
Bulk
Form/Fill
Finish
Payor
Payor
Employer
Employer //
HMO
HMO
Distribution
Drug
Drug Chains
Chains
Pharmacy
Pharmacy
Relatively Secure
Patient
Patient
There are a number of internal
safeguards to protect product
while it is within Lilly’s control
facilities.
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Doctor
Doctor
Sales
Sales Force
Force
Company Confidential
Copyright © 2005 Eli Lilly and Company
Product “At Risk”
5
Mass Serialization: Security Codes
Mass Serialization at the item level will be
essential to the Pharma industry in the future…
Mass serialization involves assigning a code to each individual item
produced: pallet, case and item level coding - such codes must be
unique and impossible to guess.
Every single code is unique
Non re-occurring
Encrypted
The FDA has concluded that mass serialization is “the single most powerful
tool available to secure the U.S. drug supply.”
- FDA, “Combating Counterfeit Drugs”, February 2004
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Company Confidential
Copyright © 2005 Eli Lilly and Company
6
Electronic Pedigree
The FDA’s vision of an Electronic Pedigree
21.203D2A9.16E8B8.719BAE03C
Version — 8 bits
Mfg. — 28 bits
(> 268 Million)
Pharma
Manufacturers
apply RFID
tags
RFID Electronic Records:
Receipt and Ship Dates
Hospitals
Wholesaler
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Product Class — 24 bits
(> 16 million)
Serial Number — 36 bits
(> 68 billion)
Regulatory
Agency
Central
Database
Pharmacy
There are a
number of
unanswered,
complex
questions
regarding
electronic
product code
standards, IT
infrastructure,
privacy, etc!!
Chain Drug Store
Distribution Centers
Company Confidential
Copyright © 2005 Eli Lilly and Company
7
Mass Serialization: Europe
Pedigree Developments in Europe
Serial Numbering – Sequential Coding in Europe
•
Application of unique number to item level
• Communication of applied numbers to central database
• Control of central database by national Ministry of Health
Drivers
•
Cost control of Health Care system
• Track & Trace products through entire pharma supply chain
• Avoid counterfeits and theft
• Increase patient safety
Countries involved, status and main driver
•
•
•
•
•
Belgium:
Implemented, reimbursement fraud
Italy:
Partly implemented, cost control and counterfeits
Portugal:
New requirement, cost control
Russia:
New requirement - patient safety , cost control
Spain and others to follow
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Company Confidential
Copyright © 2005 Eli Lilly and Company
8
Best-in-class Examples
The Future: Real Time visibility
Cargo and Position reports
Enhanced communications via the following sources:
•EDI capabilities
•E-Mail
•Direct Link Access
•Internet Access
•FastFax Reporting
•Load Tracing and Tendering via the Internet
Photo sources: Envirotainer/DHL, Qualcomm, Prime Carriers
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Company Confidential
Copyright © 2005 Eli Lilly and Company
9
Conclusion
Opportunities for Indiana?…
•
•
•
•
•
Track and Trace technologies
Electronic Pedigrees – database security,
information sharing
Cold Chain Management – packaging and shipping
containers
Distribution hub – it’s hard to believe… there is
currently no wholesale pharma distribution
operation in the state!
Indianapolis Airport: A viable alternative to
congested ports for high priced (e.g.
pharmaceutical) products from China and India
“The biggest single external element influencing pharmaceutical distribution operations
concerns all the issues surrounding quality, security and validation processes.”
- Pharmaceutical Industry Analyst
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Company Confidential
Copyright © 2005 Eli Lilly and Company
10
Back-up Slides
Distribution Strategy: What needs to be
addressed? Now and in the future...
• Regulatory focus on distribution is increasing
•
•
•
More GMP / validation efforts
Cold-Chain
Pedigree requirements
• Security/Product Safety in handling and transport becoming more
important
• # of SKUs could grow significantly due to country-specifc tagging
serialization requirements
• Changes in product portfolios drive storage space requirements
•
•
•
Shift towards application devices/pens ongoing
E.g. Humalog, based on Insulin Equivalents: Vials (1)  Cartridges (4x)  Disposable
Pens (7x)
Special picking areas for special security substances
• Supply Chain Management
•
•
Product flows need to be tightly controlled
Importance increases with EU accession
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Company Confidential
Copyright © 2005 Eli Lilly and Company
12
Mass Serialization: Europe
Italy: General Overview
Italian MoH published new decree
on Jan 4th 2005
Italian MoH has established a
central database to track
pharmaceutical products
Initial communication with central
database via internet
Long term goal is to track & trace
products through the entire supply
chain from manufacturer to patient
Control of health care expense
and improvement of patient safety
Eli Lilly – Indiana Logistics Summit
19 Oct 2005
Company Confidential
Copyright © 2005 Eli Lilly and Company
13