Transcript Serial & Lot Genealogy Management

West Coast User Group Meeting
Navigating the Complexity of Life Sciences
Dave Medina
Vice President – Life Sciences
QAD, Inc.
Navigating the Complexity of Life Sciences
Safe Harbor
This presentation includes forward-looking statements about
QAD and its business. These statements are subject to risks and
uncertainties that may cause actual results and events to differ
materially. These risks and uncertainties are detailed in QAD’s
SEC filings, including its Form 10-K for the fiscal year ended
January 31, 2013.
The company undertakes no obligation to update forwardlooking statements.
Agenda
• The Complex Life Sciences Environment
• U.S. Healthcare Reform and Life Sciences
Manufacturers
• Serialization - The Regulations
- UDI and ePedigree –
• The Business Impact of Serialization, Track
and Trace
The Complex Life Sciences Environment
Life Sciences Industry Trends
• Globalization
- From sourcing to new markets in emerging countries
- Global price regulation and reduced reimbursement
• Complex global regulatory environment
- Innovation while managing current offerings.
• Global collaboration
- Changing business models
- Controlling quality, compliance, governance and risk
The Complex Life Sciences Environment
Life Sciences Industry Trends
• Increased focus on patient safety
- Anti-counterfeiting (e-Pedigree / UDI)
• QbD and PAT initiatives
- Automate QMS into manufacturing processes
• Reimbursement and price pressures
- Better contract and revenue management
- Accurate trade activity management
• Demand
- Supply chain visibility
The Complex Life Sciences Environment
The U.S. Healthcare Supply Chain
1 – Ad Hoc
•SCM unstructured and loosely defined
•Process measures not in place
2 - Defined
•Basic SCM defined and documented
•Process changes thru formal process
3 - Linked
•Managers employ SCM with strategic
intent and results
•SCM measures horizontal
4 - Integrated
•SCM ecosystem cooperation to the
process level
•SCM deeply embedded in organization
5 - Extended
•Routine Supply Chain collaboration
between legal entities
Sample size = 1120; Source: 2009, Nachtmann and Pohl
The Complex Life Sciences Environment
Leveraging Technology – Manufacturer Plans
Technology
Rank
ERP
Vendor
1
Data mining / analytics
42.3%
2
Business intelligence / dash boarding
44.1%
3
Quality control
40.6%
4
Track & trace / serialization / ePedigree
42.4%
5
Strategic sourcing
37.5%
6
Process Analytical Technology (PAT)
20.3%
7
Warehouse management
37.3%
8
Data warehousing
18.6%
9
Demand forecasting
35.5%
10
Supply chain visibility / monitoring
35.5%
Top 10 Planned SCM Technology Purchases 2012*
In order of preference from ERP Vendor
*Excerpted from IDC Report: “Best Practices: 2012 Life Science Manufacturing and Supply Chain IT Benchmark Guide”
U.S. Healthcare
Reform and
Life Sciences
Manufacturers
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U.S. Health Care Reform and Life Sciences Manufacturers
Medical Device Excise Tax
• Effective Jan 1, 2013 – 2.3%
- Final / Interim rule issued Dec 5, 1012
• Complex rules challenge internal processes
-
Convenience kits
Rebate management
Constructive sales price
Reporting compliance
Exemptions
• Challenges internal processes
U.S. Health Care Reform and Life Sciences Manufacturers
Your Customers
• How healthcare makes money
- Today – by filling hospital beds and doing more
things to/for patients
- Tomorrow –by keeping people out of hospital beds
and doing less things to/for patients
• Accountable Care Organizations (ACOs)
- Move delivery systems from silo to multi-provider
- From “fee for service” to shared payments
- Understanding and managing costs critical
U.S. Health Care Reform and Life Sciences Manufacturers
Near-term impact
• Providers
- Large IDNs leveraging GPO contracts
- IDNs consolidating - Regional Purchasing Co-ops
- ACO’s acting as GPO’s
• Manufacturers
- Supply chain efficiency, visibility
- Partnerships with customers
• Better contract management
- Understanding impact on financials
- Better visibility downstream to customer behavior
U.S. Health Care Reform and Life Sciences Manufacturers
Future QAD Functions: Trade Activity Management
$$ Chargeback (List – Contract Price)
Manufacturer
w/TPM Life Science
Admin
Fee ($)
Contract
Price
Definition
GPO
(Buying Group)
Indirect
Customer
Indirect
Customer
Distributor Orders
from Manufacturer
Distributor
Invoices at List
Price – Std disc
Invoices at
Contract Price
Customers Order
from Distributor
U.S. Health Care Reform and Life Sciences Manufacturers
Long-term impact
• The supply chain:
- Expenditures are 20 – 50% of cost of care
- Tie up capital – restricting investment
- Influences choice of patient care technologies
• Engagement in customer supply chain
- Know every treatment-essential product used for
care of patient?
- Study the impact of products on outcomes?
- Identify cost/quality trade-offs
• Focus on demand planning
U.S. Health Care Reform and Life Sciences Manufacturers
Demand Planning Challenges - Life Sciences
API
Global
Distribution
•
•
•
•
•
•
National regulatory issues
Regional reimbursement issues
No LS enterprise visibility into…
…Inventory levels
…Shelf life
…Provider demand
Contract
Payers
U.S.
Healthcare
Providers
Manufacturing
• Lack of visibility to
manufacturing
schedules
• Multiple supply chain
partners
• Lack of forecast
collaboration
• Increased regulations
• Quality system
management
• Regulatory
governance
The Life
Sciences
Enterprise
Wholesale/
Distribution
Partners
Raw
Materials
Suppliers
•
•
•
•
Quality control
Regulatory governance
Global dispersion
Long lead times
• Regulatory
mandates
• Reimbursement
• Group purchase
(GPO, IDN, ACO)
• Cost pressures
• Seasonality (e.g.,
flu season, etc.)
• Patient
demographics
• Visibility to LS
enterprise
• Shelf life (e.g.,
consignment)
• No LS enterprise
visibility into…
• …Inventory levels
• …Shelf life
• GPO Contract
Management
U.S. Health Care Reform and Life Sciences Manufacturers
Demand Planning Challenges - Life Sciences
• Patient engagement in
healthcare will drive
decisions on alternatives
• Influences on patient
decisions are varied
• Understanding a patient’s
demand drivers will be
critical to success
Life
Sciences
Enterprise
Employer
Incentives
Healthcare
Provider
Patient
External
Sources
Economics
•Social
Media
Payer
U.S. Health Care Reform and Life Sciences Manufacturers
Demand Planning 7.0
• Reliable forecasts
- Mathematical modeling
- Collaborative input
- Responsive to change
• Inventory-efficient supply chain
- Reduce inventory
- Improve customer service
- Increase promotional effectiveness
Enabling the Effective Enterprise!
Serialization,
Track and
Trace
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Serialization, Track and Trace
Unique Device Identifier (UDI)
• Food & Drug Administration Amendments
Act (FDAAA) – Sep 2007
• Reduce medical errors
- Rapid and accurate device ID
• Improve accuracy of data in IT systems
- Streamline supply chain processes
- Useful EMR application in clinical environments
• Adverse events and recalls
• Anti-counterfeiting
Serialization, Track and Trace
What’s a UDI?
• Unique code
- Unambiguous ID of a specific product
• Consists of two parts:
- Device Identifier (DI) –
• Specific model
- Production identifier (PI) –
•
•
•
•
Lot or batch no.,
serial number,
expiration date,
or date of manufacturer
Serialization, Track and Trace
What’s Required in a UDI?
• Must be presented in 2 forms on label:
- Plain-text, and
- Automatic Identification and Data Capture
(AIDC) tech
• Plus - direct device marking on…
- Long-term implantable devices
- Reusable devices – sterilized routinely
- Devices that may get separated from label
• Convenience kits & devices in kits
• Exemptions (retail, class I devices)
Serialization, Track and Trace
Unique Device Identifier (UDI)
Example of a UDI on a device label
Source: http://www.fda.gov/medicaldevices/deviceregulationandguidance/uniquedeviceidentification/default.htm
Serialization, Track and Trace
How will UDI system work?
• Who must comply?
- Manufacturers, reprocessors, specification
developers, repackagers, relabelers and kit
assemblers
• Standards-based – ISO15459
• Manufacturers create their own code
• Format - 2 standards organizations
- GS1 & HIBCC (Healthcare Industry Business
Communication Council)
Serialization, Track and Trace
How will UDI system work?
• Global Unique Device Identification
Database (GUDID)
- Quickly identify devices to reduce errors
- Track devices in event of a shortage
- Integrate data with electronic health records
• Final FDA rule before May 7, 2013
Serialization, Track and Trace
What are the implications?
Production &
Process
Quality
Management
System
ERP System
Design
FDA UDI
Compliance
Supply Chain
Partners
• ERP serialization functionality with easy track and trace
essential to compliance with UDI requirements
Serialization, Track and Trace
Drug ePedigree
• Why?
-
Anti-counterfeiting
Brand security and protection
Supply chain optimization
Trade activity management
• Contract manufacturers
- Level of technical infrastructure varies
- Some may see as a value-added
differentiator
Serialization, Track and Trace
Drug ePedigree
• California ePedigree – The Basics
Date
Player
Requirement
Jan 1, 2015
Pharmaceutical
Manufacturers
• Serialize and ePedigree 50% of their
prescription drug packages
Jan 1, 2016
Pharmaceutical
Manufacturers
• Serialize and ePedigree remaining
prescription drug packages
July 1, 2016
Distributors and
Repackagers
• Receive ePedigrees and serialized drug
packages
• Update ePedigrees
• Repackagers must link incoming and
outgoing serial numbers
• Ship serialized drug packages
• Pass on the updated ePedigrees
July 1, 2017
Pharmacies
• Receive ePedigrees and serialized drug
packages
• Update ePedigrees
• Ship serialized drug packages (returns)
• Pass on the updated ePedigrees (returns)
The Business
Impact of
Serialization
and Item
Attributes
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The Business Impact of Serialization and Item Attributes
Business Process Impact
Manufacturer checks serialization against invoice to
detect counterfeit, gray market, double counting and
accurate discount
Serialization Integration
•
•
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Trade management
Product safety
Supply chain integrity
Recall
Non-conformance/CAPA
$$ Chargeback (List – Contract Price)
Distributor Orders
from Manufacturer
Manufacturer
CAPA
Investigation
Invoices at List
Price – Std disc
Serialized products
Visibility in case
of CAPA
investigation
due to nonconformance
Allows for easier recall by
tracking to end user
Indirect
Customer
Distributor
Invoices at
Contract Price
Indirect
Customer
Customers Order
from Distributor
The Business Impact of Serialization and Item Attributes
Sample Use Case
• Item level serialization
• Track and trace
- Lot trace workbench
- Serial data history
- Lot and sub-lot data
• Item attributes for quality control
The Business Impact of Serialization and Item Attributes
Recall – QAD Serialization
Patient
FDA First Alert
• Company discovers
problem - contacts FDA
• FDA inspection
• FDA receives report (AER)
• CDC contacts FDA
Class I
Recall
Manufacturer
• Recall initiated
• Identify affected shipments
• Contacts distributors with
appropriate serialization
• CAPA investigation initiated
Recall Effectiveness
FDA Alerts Public
• Takes suspected recall
product to pharmacy
• Pharmacy reviews
ePedigree with item level
serialization
• Pharmacy determines part
of affected lot
• Pharmacy recalls product
and returns to distributor /
manufacturer
Distributors
• Reviews stock for
affected product
• Returns undistributed,
affected stock
• Advises affected clients
Pharmacy
• Identifies affected product
• Returns affected product
The Business Impact of Serialization and Item Attributes
Lot Trace Workbench
Lot Trace – Forward
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Other product from suspect raw materials?
Where shipped? (Extend recall)
Any inventory or WIP?
Remove/quarantine/destroy
Other Distributors and
Supply Chain Partners
• Advised of recall
Supplier
• Impact analysis
• Other product lots
(finished goods
shipped)?
• Inventory?
• Review QC history of
supplier, etc.
Manufacturer
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Problem confirmed
Affected lots ID’d
FDA notified (prior slide)
Recall (prior slide)
Original Complaint
• Originator of complaint
to company (AER)
• ePedigree ID‘s item
• Manufacturer notified
Lot Trace – Back
Data
Send data to CAPA
• Raw materials and component history
• Associated QC data (testing, etc.)
• Suspect raw materials batch(s)
• Supplier identified
The Business Impact of Serialization and Item Attributes
CAPA Support and Item Attributes
CEBOS
CAPA Process
• Root cause analysis
• Take Action
• Document
Data
Data from various sources
• Supplier history (QAD Item Attributes)
• Quality attribute history (QAD Item Attributes)
• Statistical analysis
• Additional testing, etc.
Investigation
• Product history
• Material/Supplier
• Analysis
• Supplier
Documentation
FDA Effectiveness Check
• Review entire recall process
• Reasonable removal/correction effort?
• Product destroyed/recondition?
• Investigate cause of defect
Action
• Disqualify supplier
• Destroy remaining product
• Destroy quarantined
materials
• Replace with new supplier
Meeting the Complex Needs of the Life Sciences Industry
QAD Functionality
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Trade Management Functionality
Demand Planning 7.0
Item level serialization
Lot trace Work Bench
Item Attributes for Quality Control
CEBOS – QMS Software
Building the
Effective Enterprise
Join us in San Antonio, TX
May 6-9, 2013
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