Speedy Delivery

Written by Ted McKenna

MMT 2010 Volume: 14 Issue: 1 (February)

The VA and DoD continue to refine automation
of their pharmaceutical supply chain systems, to
speed delivery, lower costs and improve patient safety.

It also means greater efficiency and cost savings, experts say. Many of these technologies have been in place for a number of years and the benefits achieved from them have been dramatic, noted Vice Admiral Keith Lippert (Ret.), a former director of the Defense Logistics Agency and currently chief strategy officer of Accenture’s defense industry group.

The most important development in the distribution of pharmaceuticals, Lippert said, came with the switch to a prime vendor system, which eliminated a lot of warehouse management issues for DLA. A vast majority of the pharmaceuticals formerly managed by DLA now get sent directly from the prime vendor, who in turn uses subcontractors to handle processing and shipping and other related duties.

“The advantage is, one, it frees up warehouse space and, two, it allows the prime vendor and subcontractors to manage shelf-life,” Lippert said. “That burden was never really done all that well by DLA. It’s been a huge success in terms of improving the quality of the pharmaceuticals and allowing a wide range of different competitors to compete for the business.”

The second major innovation in recent years in management of medical materiel, including pharmaceuticals, has been in the use of modern information technology, including implementation within the last five years of a new IT system from SAP/ Manugistics for managing all the 5.2 million items within the medical supply chain. Lippert’s current company oversaw the implementation of the technology while Lippert headed the DLA. He said a prime benefit of the system has been the improved ability to predict demand from customers, thereby reducing inventory and all the attendant waste and other costs of managing inventory.

“If you go back to Desert Storm, there was criticism of the military logistics system, and rightly so, for not being able to track where the materiel is, which led to these huge mounds of excess materiel,” Lippert said. “The customer was ordering it repeatedly because they didn’t know where it was. So this is the solution to prevent the excess ordering of materiel and the waste associated with that.”

DATA INTEGRATION

Broadly speaking, the benefits of technology for pharmaceutical distribution essentially stem from better integration of data such as drug availability and patients’ medical conditions and histories. In combining information, better care is provided to people in a number of ways, noted Dr. Douglas Bricker, dean of Duquesne University’s Mylan School of Pharmacy.

“With that medical record, you can have the complete history of whether or not a particular drug is continuing to be used,” Bricker said. “Lots of times, there are side effects, and someone will say, ‘I don’t feel like taking that drug anymore.’ But they really do need to take it.”

Such technologies have been around for quite some time, Bricker noted, and have now become the norm at all sorts of medical facilities, military and civilian, as opposed to a sort of ideal that administrators strive to implement.

“It’s getting better and better and, like anything else, is becoming the standard of practice as opposed to something we would try to achieve or go toward,” he said. “The technology explosion that we’ve witnessed over the last decade, and even over the last five years, is amazing. I would think that we’ll see a refinement, a widespread use and embracing of systems that we have, so that it’s not just done in certain pockets of health care.”

Part of the refinement involves better integration of all the legacy software for management of inventory that still exists within DoD, said Ronald Treusdell, a principal with Booz Allen’s supply chain and logistics team. The hodgepodge of current systems is not the problem it might have been in the past, he said, because integration of such data has gotten much better. Best practices in database management have moved beyond the “big bang” theory of updating supply chains, including those for pharmaceuticals, with consistent enterprise-wide software, Treusdell said, with consultancies such as Booz Allen helping organizations bring together legacy systems for better data sharing.

“Five years ago, we would have said we all need to move to SAP or we all need to move to Oracle or some other enterprise solution, so that we can have end-to-end, across the spectrum of the enterprise, complete visibility of what is in warehouse bin 13A,” Treusdell said. “But the advent of services-oriented architecture and the capability to integrate legacy and advanced enterprise systems makes it much easier and much less expensive in terms of integrating the data. If you [try to switch out all the systems], you’ll never get it all done.”

Passive and active RFID technology is not on its own the reason for streamlined automation, Bricker said; rather, their use combined with better data integration supports better collection of all that data through the supply chain in general for a variety of benefits, including better understanding of inventory and what products will be available in time for treatment. Certainly, RFID also helps keep track of drugs’ pedigree, so that if there is a recall or a development in research that identifies new hazardous drug interactions, medical professionals can keep track of who is taking what and what exactly people have taken.

Bricker noted that codes used to identify drugs and their origins change as the drugs are diverted through or imported into different countries on their way to their final destination, that manufacturers merge or discontinue products, and that other events occur that may change the numbering system for a particular drug and make keeping track of it more difficult.

“The RFID does the validity, it does the pedigree and it tracks the distribution to make sure there’s enough drug [available] at the proper time,” Bricker said. “There are [also] expiration dates, and it can be moved to different parts of the country if necessary in order to make sure it doesn’t go beyond the expiration date. There’s also the whole other issue related to the national stockpile system, in which when we need to distribute particular kinds of drugs, there is a mechanism in place to get the distribution done within 24 hours or what have you.”

Mike Valentine, head of the Department of Veterans Affairs’ pharmacy management group, said that there currently is a lack of standardization of bar codes, including what information they carry. Organizations are still able to track things, he said, but it’s more complicated than it might be because there are dozens if not hundreds of different bar codes.

PREDICTIVE ANALYSIS

Experts also note that the combination of outsourcing distribution and the use of more sophisticated inventory management systems allows facilities both to keep their inventories smaller and forecast demand better. Valentine noted that the use of outsourcing for distribution means that VA is able keep quite a low inventory—about 15 “turns” per year, or an approximately three-week supply, at medical centers and about 35 turns, or a 10-day supply, at its seven mail order pharmacies around the country.

Booz Allen’s Treusdell also noted that new software tracking inventory can be combined with information about medications to help professionals plot out treatment for patients better. “Through the use of, say, business analytic software and business intelligence reporting, you can actually go through an analysis of alternative approaches to make some rapid decisions based on, ‘This is alternative A, which is preferred, but guess what? We don’t have that particular medicine for two and a half days.’ So Alternative B becomes the next best thing in order to save a life,” Treusdell said.

Regarding other refinements in tracking pharmaceuticals within the military health system, Colonel Marsha Langlois, director of the Defense Supply Center Philadelphia’s Medical Supply Chain, said that tracking through RFID and other technologies of pharmaceuticals outside the continental United States and to the proverbial last tactical mile—the front lines of Iraq or Afghanistan, for example—is done through a number of different systems that could stand to be improved but that, considering their variety and complexity, produce a pretty good result.

“We don’t have any prime vendors that can deliver to the last tactical mile. For contingency operations, our prime vendors deliver to, for example, an Army medical depot in Germany,” she said. “An order may be made for a customer in Iraq, and they can scan and cross dock the shipment for delivery to Qatar, Iraq or Afghanistan. It’s still pretty smooth because we have experts all along the way, but it’s not as easy as prime vendor ordering in CONUS.”

As just one example of a project related to pharmaceutical distribution that should make distribution easier and cheaper, Langlois noted her organization’s planned adoption of a controlled substance ordering system (CSOS), which will provide an electronic means of ordering controlled substances instead of using manual Drug Enforcement Administration (DEA) forms that must be faxed or mailed. As with most everything else driving automation, a key expected benefit is reducing the potential for human error.

“We don’t have that system now at DoD,” she said. “Most of our prime vendors are already using it. We’ve done some studies and we’re requesting funding to implement CSOS in DoD.”

The VA’s Valentine said that the VA has had a pilot program at one of its medical centers for about the past 10 years to do e-prescibing for schedule II controlled substances, but like DoD does not have a system in place throughout its organization to do that, though he said he expects the VA will be able to do so once the DEA issues new regulations. As for other improvements the VA hopes for, Valentine also mentioned the lack of an automated way to essentially certify the chain of custody for pharmaceutical products, to verify that counterfeits have not been introduced somewhere along the line. He also noted, at least in the VA’s experience, the lack of electronic medical records for pharmaceutical- related laboratory work done by non-VA providers.

“Typically, it’s on paper, so we have to scan them in and put them in our medical records,” Valentine said.

FINAL CHECK

Certainly, industry observers extol the many benefits of automated pharmaceutical distribution all along the supply chain, from the manufacturer to the patient. There is, though, the danger that can arise from a reliance on automation without sufficient human “mindfulness,” noted Dr. David J. Tipton, an associate professor of pharmaceutical administration at Duquesne University.

As a way of comparison, take, for instance, meat processing, Tipton said. A mistake by a local butcher in preparing meat might make a few people sick; a mistake by a big processing plant could sicken thousands across the country. The same sort of situation could arise with pharmaceutical processing.

“If some tech loads the backend of an automated system and gets the wrong pill in there, who knows how many people it might go out to before it gets caught,” Tipton said. “The notion is that you can drive the error rate as low you want to with money, but you can’t eliminate the random variance. Just like every once in a while, a plane falls out of the sky. It happens.”

Undoubtedly, pharmaceutical manufacturers strive to eliminate the random variance nevertheless, as does the VA, for example. Valentine noted that system-wide mistakes are certainly a possibility, though the VA works to mitigate them by doing a visual check of all products, so that even in striving to automate processes as much as possible, human supervision over the system remains.

“If you’re doing things on an automated basis and you package up a lot of drugs and label them wrong, or put them in the wrong hopper, you obviously could have a problem,” he noted. “But we have a final check by a pharmacist, so that after it goes through all the automation and is filled, we don’t just throw it in a bag. A pharmacist takes the bottle off the line and either looks through it, if they can see it, or takes the cap off and compares what they see to an image on the computer screen to make a positive identification.” ♦

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