Better Be Safe

After drug manufacturer Merck acquired the Swiss biotech company Serono one year ago, Laurent Foetisch became Head of Supply Chain at Merck Serono. Upon taking on his new role, his first task was to merge two very different supply chains, the first one being a traditional Ethical Pharma and the second one being a Biotech supply chain already highly integrated, with the intermediate objective ‘work as one’ and the final objective to become a fully integrated supply chain. NGP spoke with Foetisch about the challenges involved in securing it.

NGP. Which model is Merck Serono’s integrated supply chain based on?
LF. The question is rather difficult, because the supply chains of the former Serono and Merck Ethical Pharma are different, and so are their respective process models. The former Merck Ethical Pharma supply chain is mainly based on a ‘pull’ model while the former Serono Biotech supply chain is working with a ‘push’ model through a centrally managed tool. Our Tactical Planning Layer which is the driver of our DP (Demand Planning), our DRP (Distribution Requirement Planning) and our MPP (Master Production Planning) is fully automated and integrated with an unique global ERP platform for all the manufacturing sites and the selling affiliates. It is my job now to integrate both of them. Our journey towards becoming one integrated supply chain will take the next two years. Today, within Merck Serono we are talking about more than 20 manufacturing sites, out of which nine are global. This means that nine are delivering products to more than one country. The objective is that those global sites apply the “push” model, which means to centrally gather a demand, consolidate it, and calculate the Distribution Requirement Planning (DRP) to be dispatched to all the global manufacturing sites in order to follow the replenishment process. As far as the local sites are concerned, we will most probably just forward the demand to them and they will handle their local replenishment calculation in their local ERP systems.

NGP. What security tactics do you have in place to protect your supply chain?
LF. For me, our first objective is and must always be compliance. It is our duty to make sure that the patient always receives a genuine and quality product. So we need to guarantee our supply chain is secured and does not allow any gap during the whole shipping and distribution processes. For example, to prevent potential misuse of one of our growth hormone products, we have for many years now put in place a secure process to distribute this product in the US, which has been acknowledge by the FDA.

NGP. How are distribution deals helping to control your supply chain?
LF. I see distribution deals as a positive move for us in the future since it will reinforce the compliance at the end of the distribution chain. It is absolutely crucial to have partners at the distribution level that are again integrated; that means that they are part of our supply chain model, and that they know how to sell our medicines depending on the channel we want to choose for distribution purposes. Our distribution partners are our main components for our order to cash process, we need to select them very carefully, and then collaborate on a regular basis with them. Of course, the consolidation of the partners will bring much more strength, security and quality within the distribution, which today is in too many different hands.

NGP. What about radio frequency identification (RFID) or serialization authentication programs (SAP)?
LF. We have looked into RFID, but we think that it’s too early, the technology is not yet able to support our biotech products, mainly due to the fact that we do not know yet the impact of the waves on our molecule which are presented mostly in a liquid presentation, either in a prefilled syringe or cartridge. For the time being our preference will go for the 2D bar coding. But we have been doing serialisation with normal bar coding for a long time. For example, as already mentioned, in the US, we have put in place a closed distribution system to ensure that any product box is only processed once during its distribution. So here’s one example of securing the supply chain.

We have put other security tactics in place, namely holograms, sealed product trays, special feature and tamper evidence boxes and ultimately serialisation for our main products. Of course we are running some other projects and investigations into how to further enhance product protection, but I cannot talk about them as they are from the covert and forensic types of measures.

NGP. What role does compliance play?
LF. It really opens up opportunities, especially with the law changing, for example, in California. This is why we are running different projects in order to put a 2D barcode on our main products, and to secure the distribution through our partners in the US. For me, the main driver is compliance. Of course, the major compliance challenge is to maintain the temperature controlled chain, since all our products in the biotech and pharma field are to be kept at specific temperature during their entire life. We need to guarantee that our products are maintained and delivered at the right temperature. Monitoring of the temperature control chain is a complicated and heavy work, which involves all our logistics partners. It’s also about product integrity; we have to make sure that what we ship from our manufacturing site is delivered safely and arrives untouched. For this purpose we have put in place what we call ‘Shipping Lanes’ which are qualified and validated. A shipping lane is typically describing each of the companies or partners, which are in charge of our products during the transportation and the distribution process. Of course each of our logistics partners have signed a quality agreement to define the required services and its permanent monitoring.

NGP. How are you preparing for the Californian law change?
LF. As of January 2009, every single box arriving in California will have to be serialised, and they should be accompanied by a pedigree – a document that certifies how the batch was distributed and shipped from the manufacturing sites.

We have been doing that already for one of our growth hormone products in the USA, so it will easily be extendable to other product lines. The idea is to design something rather simple for the Californian requirements and then see how the market is evolving in other American states, and in Europe, because it will be coming in Europe too. We also need to keep some other countries in our radar screen since they might well be some local initiatives, which may require similar ‘track and trace’ requirements.

And then based on our initial project in California, we could extend it or do something in a more automated way, for example, update all our production lines to be able to do online printing, which we won’t do at the beginning.

NGP. In terms of regulations, what are the major differences between Europe and the US?
LF. In Europe, they are only initiatives, no law yet. Once it is in place, California would be the only regulation for the time being. But sooner or later it will be the same. What could be different is that in Europe, we may immediately go with a central repository for all the data, which would allow the end user to query the product pedigree online. This will be the beauty of the system because it will allow the patient to track what happened during the life of the products from Manufacturing to Distribution.

NGP. Where will you concentrate your efforts in the future? 
LF. We are pro-active in communication program in South America to inform patients about the danger of counterfeited drugs and are also supporting the Global Pharma Health Fund (GPHF) for the development of Minilab used to test the quality of drugs sold in Africa and Asia. But we will focus on the US and Europe because they are our main markets. We need to make sure that we do a risk analysis based on the type of products that we are delivering before we start with a big project in this field of product security and anti-counterfeiting measure. Of course, we will continue to enhance our supply chain security, especially at the end of the chain, with a stronger integration with our distribution partners.

California’s e-pedigree law

California’s e-pedigree law, affecting pharmaceutical companies, medical device manufacturers, and their partners across the supply chain, requires that:

• pedigrees be electronic
• manufacturers initiate the pedigrees
• pedigrees be serialized

This will allow pharmaceutical and biotech companies to electronically track all of the transactions involving a product from the beginning to the end of the supply chain. The law does not require RFID but allows manufacturers to use bar codes. The original implementation date of the California legislature was January 1, 2007 for wholesale distributors and January 1, 2008 for pharmacies. However, based on industry input, a delay was passed for enforcing state pedigree requirements, establishing a new deadline of January 1, 2009. This will give companies more time to prepare for pedigree compliance.

Laurent Foetisch is responsible for Merck Serono’s worldwide supply chain operations. He joined Serono 17 years ago, where he had several different positions within technical operations, manufacturing and supply chain management. Following the takeover of Serono by Merck, in January 2007 Foetisch was appointed Head of the Merck Serono supply chain.