I’ve seen some interesting news lately about the use of ID codes in the pharmaceutical supply chain. As expected, they are being used to fight counterfeiting. However, the codes also are being used to improve supply chain performance.
First, SecuringPharma reports that a task force set up to recommend strategies to the Indian government to protect the public from exposure to counterfeit medicines has recommended the adoption of unique identification codes on drug packs, coupled with authentication via a short message service. Use of unique IDs in a human-readable format will allow consumers to self-authenticate their medicines by sending the code via text message to a central phone number.
Another story, also running on Securing Pharma, reports that the participants in the German medicines traceability pilot SecurPharm recently decided to use GS1-compliant codes when the project gets underway next year, according to the European Compliance Academy (ECA). The pilot will involve placing unique, serialized codes on medicines at the point of manufacture so they may be scanned and authenticated by pharmacists when they are dispensing medicine, creating what ECA calls an “end-to-end” system.
But the story I was most interested in recently ran on RFIDjournal, and explains how Hanmi Pharmaceutical, Korea’s largest pharmaceutical company, is using a radio frequency identification system at five of its wholesalers, as well as at five retailer locations throughout the nation. Since the company’s Hanmi IT division installed the technology two years ago at two factories, the drug manufacturer has tracked 60 million product units annually within 500 different product categories. Essentially, it creates an automated process from an order’s receipt to the shipment of a packed carton to a wholesaler.
This year, however, the system provided an additional benefit, Hanmi reports. When the Korean government identified several products requiring a mandatory 30 percent price reduction, Hanmi was able to resolve the situation quickly, the RFID Journal story explains.
For most companies, this is a significant challenge, RFID Journal explains, because it requires immediately changing the pricing for any unsold goods that are anywhere within the supply chain, or at retail locations, and then requires adjusting invoicing accordingly. So, without an RFID system in place, a drug supplier must manually locate and count each item at thousands of pharmacies and wholesale locations. For Hanmi, however, this process was made much simpler due to the use of RFID. The company assigned approximately 400 staff members throughout the pharmacies, as well as to any wholesale locations not equipped with RFID readers. The Hanmi team used handheld readers to perform an inventory count to determine how many of each specific product facing price reduction were on the shelves. The company then used that data to adjust invoicing for those particular goods. I was surprised to see that it took Hanmi less than five days to get a total count at more than 20,000 pharmacies.
I started the story expecting one thing, but was surprised to see how RFID technology is being leveraged. I look forward to other stories—across other industries—explaining similar applications that have an impact on performance as well as the bottom line.