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2012

     When you think of supply chain excellence, which companies leap to mind as leaders? PR Newswire reports that according to a global poll of over 1,000 executives, Amazon is more admired than Apple for supply chain excellence—including across all major supply chain attributes other than innovation.

    

     SCM World conducted a poll of 1,136 executives, and 58 percent said they admired Amazon most overall for the way it operates its supply chain, compared with 37 percent who picked Apple. Five percent of the respondents picked neither company. Those results, by the way, are a reversal of Gartner’s Supply Chain Top 25 for 2012, which placed Apple first and Amazon second. However, that ranking was based on the votes of 173 practitioners and with half of the
total score determined by companies’ financial performance.

 

Apple is a force to be reckoned with, to be sure. Look no further than the lines of people snaking around Apple stores overnight waiting for stores to begin sales of eagerly anticipated devices, and it’s easy to see Apple’s following.

 

     Interestingly, in a show of supply chain strength, Japan’s earthquake, tsunami, and aftershocks last year halted or slowed production of hundreds of components that are found in consumer electronics devices, including Apple’s iPhone and iPad. Memory chips, touch screens, image sensors, batteries, and the special resins used to hold chipsets together were all in scarce supply. Nevertheless, Apple suffered no real setbacks, which can’t be said of its competitors.

 

     That’s because Apple’s products are hot, the company had more than $60 billion in cash, and it’s a big company, explained Brian White, supply chain and Apple analyst at Ticonderoga Securities, at the time. Those three factors allow it to get more of its fair share of components, and, ultimately, market share, he said.

 

So, for example, Apple was able to aggressively use its size and vast array of resources—including its very deep pockets—to get the deals it needed from component makers. The company sent executives to its Japanese suppliers literally with cash in-hand to make sure supply remained adequate, White said.

 

But that was last year. This year, Amazon emerged to become locked in a high-profile battle with Apple in the market for tablet devices and the digital content—music, movies, apps, and books—consumed on them. The companies’ rival products, the Kindle Fire and iPad, are among the most sought-after gifts this holiday season. 

 

Tellingly, in SCM’s survey, Amazon came out on top in three of the four supply chain attributes that survey participants were asked to rate the two companies on: agility, collaboration, and execution. Regarding agility (defined as the ability to quickly and cost-effectively shift amounts and/or types of production and delivery to improve operational performance in volatile conditions), 62 percent of the survey participants named Amazon as the leader, compared with 33 percent who named Apple.

 

Furthermore, regarding collaboration (defined as the ability to work across organizational boundaries to solve systemic operational problems and create new value for both customers and partners), 59 percent of the survey participants named Amazon as leader, compared with 31 percent of the respondents who cited Apple. For execution (the consistent and reliable delivery against commitments and within budgeted expenses), 57 percent of the respondents named Amazon while 38 percent cited Apple.

 

The last characteristic of supply chain excellence, innovation, was—of course—a different story. In this case, as would logically be expected, Apple won hands down on the fourth key characteristic of supply chain excellence: innovation. In this case, 78 percent of the survey respondents named Apple as the supply chain leader.

 

     What I’d like to know, is whether or not you agree with the results of the survey. For that matter, do you think agility, collaboration, execution, and innovation are the cornerstones of supply chain excellence?

 

 

 

     As government agencies worldwide impose tougher regulations, and the amount of revenue lost due to counterfeit pharmaceuticals continues to grow, much attention now centers on how RFID can be applied to the pharmaceutical supply chain.

 

     For instance, the U.S. Food and Drug Administration (FDA) recently announced that it—in partnership with international regulatory and law enforcement
agencies—took action against more than 4,100 Internet pharmacies that illegally sell potentially dangerous, unapproved drugs to consumers. There’s big business in those counterfeits too. Indeed,
according to The Center for Medicine in the Public Interest, in 2010 $75 billion of revenue was lost due to counterfeits in the U.S. alone.


     Ann Grackin, chief executive officer, ChainLink Research, recently wrote in a report titled “Report RFID in Pharmaceuticals—An Idea Whose Time Has Come,” that early RFID projects at many companies have centered on implementation of packaging lines. But for e-Pedigree, with its inherent supply chain requirement, cross-enterprise solutions have been created that are often now part of the pharmaceutical industry’s projects. These inter-enterprise solutions hold the key to moving from merely a compliance project to one with significant additional benefits in cost reduction, increased sales and, of course, patient safety, she wrote.

 

     Consequently, the discussion has moved from if, to how, for many major pharmaceutical manufacturers, Grackin wrote. Those who have not had a fresh look at RFID in the last year or two may not be aware how far the industry has come. The barriers to adoption are down and the benefits are up, she continued.

 

      With that in mind, I was interested to read about a pilot study that offers a key endorsement of the use of serialization to support track-and-trace of medicines in the U.S. supply chain. A Securing Industry article reports that the pilot—involving Abbott Laboratories, wholesaler McKesson, and the Veteran’s Health Administration (VHA) along with the support of healthcare supply chain specialist GHX—demonstrated that unique serial numbers on medicine packs could allow end-to-end tracking of drugs from the manufacturer, to the distributor, customer, and dispensing pharmacy.


     The key here is a central data repository set up to authenticate pharmaceutical products using serialized GS1-compliant 2D datamatrix codes containing global trade item numbers (GTINs) at the item- and case-level as they flowed through the supply chain. In addition to the serial numbers, the datamatrix also included lot numbers, expiry dates, and case quantities, with transaction information recorded in an external data repository.

 

     Abbott placed the codes on medicine bottles and cases at the point of manufacture, with McKesson scanning the cases in and out of its distribution facility, the article explains. The VHA’s Mid-South facility, which receives approximately $1.5m-worth of pharmaceuticals daily, scanned the cases on entry and the
individual medicine bottles as they were dispatched to patients via its mail-order pharmacy operations.

 

     The ultimate aim of the project was to gauge whether the system could feasibly be scaled up to take in the entire U.S. supply chain, and the pilot demonstrated that the transactional data could be used to make sure that the shipped product was legitimate, the article notes.

 

     By using a central repository built by GHX, the VHA gained visibility into where products were located after being shipped from Abbott, and the repository also notified the organization of a sample recall while the product was still mid-shipment so the “recalled” product wasn’t distributed to patients, said a
spokesperson for the project.


     It’s worth noting that the pilot does not go as far as the impending ePedigree system for California because the latter demands recording of every transaction—up and down the supply chain—via a full chain-of-custody model. However, the pilot does include unit-level traceability. On the other hand, not including the level of complexity required for ePedigree does decrease the difficulty—and corresponding cost—of implementing a traceability system.

 

     How is your company using RFID to track-and-track through the supply chain?

Some news in recent weeks has me thinking about manufacturing in China. For starters, China has seen 11 consecutive months of falling foreign direct investment. What’s more, the 10 months through October showed a steep drop in foreign investments, down 3.5 percent to $91.7 billion, according to an article in BusinessWeek.

One obvious factor, of course, is the shaky global economy, which makes spending money abroad seem less-attractive to companies. It’s no surprise that hardest-hit Europe, still struggling to get out from under its debt crisis, pulled back the most in China: Investment from the European Union was down 5 percent year-to-date, to $5.24 billion, the article explains.

Investment from Japan also slowed in October, which also was notable. That investment grew 10.9 percent, to $6.08 billion, in the first 10 months of the year, but that was much slower than the 17 percent growth recorded through September—that’s when an ongoing island dispute set off violent anti-Japan protests across China. Some of the results, the BusinessWeek article notes, include that Toyota’s supplier of headlights, Koito Manufacturing, has suspended a plan to triple its output in China. Furthermore, wiring-harness maker Sumitomo Electric Industries and Toyo Tire & Rubber are now planning to expand in Thailand, Vietnam, Myanmar, Indonesia, and Cambodia instead of in China.

Perhaps the largest issue for foreign manufacturers is rising labor costs in China because they make China-based production less competitive. Cambodian workers are paid around $90 for a 60-hour work week, while Chinese workers—depending on location—earn between $336 to $552 for a 48-hour work week. Other countries offer a similar tale.

Nevertheless, it can be argued that this is only a short-term blip, and that long-term, foreign investments in Chinese manufacturing will rise again. In an article that ran on Supply Chain Management Review, Rosemary Coates, president of Blue Silk Consulting, wrote that she has seen a shift in companies’ China strategies over the past two to three years, and that most companies are expanding operations in China. That’s because China offers a growing market for, well, almost everything.

China already has the largest middle class of any nation on earth; about 350 million, Coates wrote. Within 10 years, the predictions say that number will balloon to over 800 million. As China industrializes, more people are lifted out of poverty and demand what middle-class citizens around the world demand: cars, personal care products, electronics, and houses. Industry demands infrastructure, component parts, and automation, which makes China the most attractive market for companies selling just about every kind of product, Coates writes.

There is a hitch, however. To sell industrial products to industries or to any Chinese government agency or state-owned enterprise, products are required to be produced locally or have local content, Coates explains. This means that sellers will have to manufacture inside of China, not just ship there. Interestingly, this local-content requirement is not much different than the “Buy America Act” requiring U.S. Government agencies to buy American goods when possible.

The result then is that companies are building manufacturing capability in China to take advantage of the growing market as well as to comply with the “Buy Chinese” policies, which makes sense. Companies may be examining whether or not it’s best to re-shore, or whether it makes sense to near-shore by moving some operations closer to the U.S. to be cost effective for some markets. At the same time, China does have a rapidly growing middle class and it certainly makes sense to increase manufacturing in China to target that market.

What do you think? Is your company increasing or decreasing its presence in China?

 

 

The problem with Black Friday sales at retail stores is, well, everything. Growing fears of boisterous crowds, jammed parking lots, and extremely limited supplies of so-called “door buster” sale items can keep even the most dedicated consumer away. Retailers, of course, are well aware of those concerns, and in attempts to draw those consumers into their stores, are already offering “sneak peaks” at their Black Friday sales circulars and also have been promoting extended Black Friday—and now, Thanksgiving night—store hours. Kmart, Sears, and Walmart for instance, have all announced their stores will open at 8:00 pm on Thanksgiving. Target will open stores one hour later, at 9:00 pm.

Interestingly, that approach has drawn a growing, and quite vocal, backlash. The problem is that workers are expected to report to work at 3:00pm or so on Thanksgiving, which of course, cuts into time with their families.

MarketWatch reported earlier this week that while in recent years shoppers have increasingly complained about how Black Friday keeps creeping into Thanksgiving Day, it’s shareholders who are now giving Target grief over store hours. On Wednesday, in a coordinated effort to rally support for waiting until Black Friday to open their doors, a group of Target customers, employees, and shareholders signed a petition with nearly 212,000 signatures on the site Change.org. The for-profit social change advocate, which earns money from providing services to nonprofits, says “dozens of shareholders” have left comments, arguing that the store’s decision encourages people to work and/or shop on Thanksgiving when they could be at home with their families.

It isn’t just small shareholders who have complained either. The story goes on to note that larger investors have also accused Target of stealing Thanksgiving from family members. Harrington Investments, an investment firm that owns 16,635 shares of Target stock, sent a letter to Target CEO Gregg W. Steinhafel on Wednesday asking him to reverse his decision.

“This will inevitably put our employees in a situation where they must choose between keeping their jobs or spending quality time with their families,” Harrington writes.

Today, an article in Business Week reports that, protesting low wages, spiking health care premiums, and alleged retaliation from management, Walmart workers have started to walk off the job. First, on Wednesday, about a dozen workers in Walmart’s distribution warehouses in Southern California walked out, followed the next day by 30 more workers from six stores in the Seattle area.

The workers, part of a union-backed employee coalition called Making Change at Wal-Mart, say this is the beginning of a wave of protests and strikes leading up to Black Friday. A thousand store protests are planned in Chicago, Dallas, Miami, Oklahoma, Louisiana, Milwaukee, Los Angeles, Minnesota, and Washington, D.C., the group says. They say their goal is not to shame the company, but to improve conditions.

Yet the strikes—timed to coincide with the holiday shopping rush—are clearly intended to put pressure on the company during the busiest time of the year, when Wal-Mart most needs its employees. And as the Business Week article notes, holiday cheer is a tough sell if your workers are picketing in the parking lot.

Nevertheless, retailers expect the holiday shopping season to account for as much as 40 percent of their annual sales. Furthermore, to compete with on-line rivals, brick-and-mortars must generate excitement somehow to make consumers think it’s worth visiting the retail location—either in the pre-dawn hours on Black Friday or Thanksgiving evening.

Still, the question then becomes: will the strikes or growing backlash have any tangible impact?  An article that ran in the LA Times explains that analysts say most Black Friday shoppers, eager for discounts, won't be fazed by upset workers with petitions.

“As long as it doesn’t affect them directly, shoppers probably don’t think too much about it,” says Ken Perkins, president of Retail Metrics.

I think there’s too much sales revenue at stake for retail stores to change their hours. What’s more, while some consumers may grouse that stores shouldn’t be open on Thanksgiving day, I suspect many more will flock to grab those deals and “door busters.” Some may even welcome the chance to get away from their families for a few hours.

It isn’t a few abnormally cold mornings that have us thinking of Thanksgiving but rather instead, those thoughts are prompted by the plans of retailers, the U.S. Postal Service, and courier companies for Black Friday and the holiday season.

So, for example, the U.S. Postal Service announced it expects to deliver 365 million packages this holiday season, which is a 20 percent increase over 2011. The Postal Service projects the record-breaking increase in its competitive package business due to consumers’ growing fondness for shopping online. In total, nearly 18 billion cards, letters, and packages will be delivered between Thanksgiving and New Year’s Eve, says Patrick Donahoe, Postmaster General and chief executive officer.

I was also interested to see in a Supply Chain Digital article that with a dwindling number of weeks until Christmas, courier companies are ramping up plans to ensure packages are delivered on time. Specifically, plans for the holidays have begun for all courier companies that offer services through online parcel delivery specialist Parcel2Go. UPS, which offers a range of standard, saver, and express parcel services through Parcel2Go, has predicted it will deliver 527 million parcels globally between late November and Christmas—a 10 percent increase over 2011. FedEx expects to handle about 280 million packages over the same period—up 13 percent over last year.

Admittedly, at this time of year, it wasn’t much of a surprise to see that Walmart has already unveiled its Black Friday sales circular, and that the company will open its stores’ doors beginning at 8:00 p.m. on Thanksgiving. However, the supply chain implications for a second announcement were something different. That is, Walmart will take steps to ensure wishlist items like the Apple iPad 2 are available for customers during a special one-hour event on Thanksgiving.

“We know it’s frustrating for customers to shop on Black Friday and not get the items they want,” says Duncan Mac Naughton, chief merchandising and marketing officer, Walmart U.S.  “This year, for the first time ever, customers who shop during Walmart’s one-hour event will be guaranteed to have three of the most popular items under their tree at a great low price.”

Here’s how Walmart explains the One-Hour Guarantee: Due to the large quantity of product already secured, Walmart guarantees that customers who are inside the store and in the queue line between 10 p.m. and 11 p.m. local time on November 22 can purchase the Apple iPad 2, Emerson 32” LCD TV, and LG Blu-ray Player at advertised prices. If any of these items happen to sell out before 11 p.m. local time, Walmart will offer a Guarantee Card for the item which must be paid for by midnight and registered online. The product will then be shipped to the store where it was purchased for the customer to pick up.

I am certainly looking forward to learning more about the success of the program after Black Friday. Determining just how many items to have on-shelf at the store level and committing to honoring the advertised price is a mammoth undertaking.

Finally, the other issue is just how much of an impact the aftermath of Hurricane Sandy will have on retail supply chains along the northeast coast. Chris Merritt, vice president and general manager, retail supply chain solutions for Ryder, wrote in Chain Store Age that while most retailers should have enough inventory for their regular replenishment items, they expect to see out of stock situations up and down the east coast for promotional items retailers have ordered and advertised for Black Friday. The situation could have been much worse, However, because as Merritt further writes, Ryder collaborated with many of its retail customers in the days leading up to the storm, repositioning inventory, pulling inventory forward, and even expediting advanced shipments of fast selling goods consumers needed for storm preparedness.

From port damage and gasoline shortages to new consumer electronics and longer store hours, the next few weeks will tell a great deal about companies’ ability to manage supply and demand, as well as transportation. I’m looking forward to learning how companies perform. Are you?

It comes as no surprise that states and localities have deferred spending on roads and bridges in recent years due to fiscal constraints. To the experts who follow this, that deferral, however, has been to our national detriment.

An article that ran in the San Francisco Chronicle this week points out that the American Society of Civil Engineers (ASCE) gave an overall grade of D to the nation’s infrastructure in 2009, ranging from a D-minus for roads, waterways and levees, to D-plus for energy transmission and C for bridges. Bringing those grades up to a more acceptable level would—the group estimated at the time—require a five-year investment of $2.2 trillion.

That report card further noted that, at the time, Americans spend 4.2 billion hours a year stuck in traffic at a cost to the economy of $78.2 billion, or $710 per motorist. Poor road conditions cost motorists $67 billion a year in repairs and operating costs. At the time, one-third of America’s major roads were observed to be in poor or mediocre condition and 36 percent of major urban highways were congested.

Last year, ASCE announced that according to its latest research, the nation’s deteriorating surface transportation infrastructure will cost the American economy more than 876,000 jobs, and suppress the growth of the country’s Gross Domestic Product by $897 billion by 2020. The report, conducted by the Economic Development Research Group, showed that in 2010, deficiencies in America’s roads, bridges, and transit systems cost American households and businesses roughly $130 billion, including approximately $97 billion in vehicle operating costs, $32 billion in delays in travel time, $1.2 billion in safety costs, and $590 million in environmental costs.

If investments in surface transportation infrastructure are not made soon, those costs are expected to grow exponentially. Within 10 years, U.S. businesses would pay an added $430 billion in transportation costs, household incomes would fall by more than $7,000, and U.S. exports will fall by $28 billion per year, the ASCE research notes.

“Clearly, failing to invest in our roads, bridges, and transit systems has a dramatic negative impact on America’s economy,” says Kathy J. Caldwell, P.E., F.ASCE, president of ASCE.

With President Obama’s re-election this week, however, some transportation officials and executives throughout the freight transport sector now hope to see greater spending on the nation’s infrastructure. Indeed, while it might be tough to get such spending through a new Congress that convenes in January, and must deal immediately with the fiscal cliff, the president often mentioned as much during his campaign. What’s more, during his victory speech on election night in Chicago, President Obama sounded optimistic, saying that he is “more determined and more inspired than ever” about the work that needs to get done for the country. Some of that could include greater infrastructure spending—including billions of dollars in transport spending.

How soon that could happen is anyone’s guess. The pending end-of-year fiscal cliff could include trillions of dollars in automatic tax increases for the wealthy and others, as well as spending cuts. But the San Francisco Chronicle article notes that President Obama’s American Jobs Act, which got blocked in Congress, sets aside $85 billion for school building improvements; road, rail, mass transit, and airport upgrades; and $10 billion for an infrastructure bank, leveraging private and public capital.

Most of the money would come from ending the wars in Iraq and Afghanistan, according to his recently issued economic plan. In July, Obama signed a transportation bill, sponsored by Sens. Barbara Boxer (D-Calif.) and James Inhofe (R-Okla.), providing $105 billion for road, rail, mass transit, and bridge building projects that would save or create almost 3 million jobs per year through 2014, according to sponsors.

Even with the spending, it would take years to upgrade infrastructure such as highways and bridges. But ultimately, it needs to be done. It will be interesting to see, not only if the spending does come to pass, but also what impact it will have on supply chains.

Seeing the long lines at makeshift polling places today reminds us of the resilience of New Yorkers, those in New Jersey, and other places heavily impacted last week by Hurricane Sandy—now also called a “superstorm.” Just as life moves on, so too, does the supply chain, albeit slowly.

Air Cargo World reported last week that Hurricane Sandy, which earned “superstorm” status due to the unprecedented havoc it caused, disrupted supply chains worldwide. The storm, which is projected to cost the economy as much as $20 billion, hit the sea freight industry the hardest, but also caused the cancellation of more than 12,000 flights and numerous airport closures. With the closure of New York’s John F. Kennedy International and LaGuardia airports, as well as Newark Liberty International Airport and Teterboro Airport, for example, UPS was forced to reroute flights to other areas such as Louisville.

The New York Times reported on Sunday that in addition to shutting down shipping terminals and submerging warehouses, the storm also tangled up deliveries because of downed power lines, closed roads, and scarce gasoline in parts of New York and New Jersey. The supply chain is backing up at a crucial time, just as retailers normally bring their final shipments into stores for the holiday shopping season, the article points out.

FedEx, for example, has rented fuel tankers to supply its delivery trucks as commercial gas stations run dry, while Ryder has been hunting down rental trucks to add capacity, the article explains. CSX, the major railroad company, was continuing to advise customers to expect delays of at least 72 hours on shipments. And retailers ranging from Amazon to Diane von Furstenberg have told customers to expect delays on shipments.

Last week, the Port Authority of New York and New Jersey reported that all of its major marine terminals were closed by the storm. Furthermore, as a result of the closings, delays may continue to ripple through the holiday season, according to Paul Tsui, chairman of the Hong Kong Association of Freight Forwarding and Logistics, says in the NYT article.

Several customers with facilities in the New York area told him their warehouses are totally damaged, and they presume the merchandise inside will have to be reported lost to insurance companies, Tsui says. We’re now coming into the cutoff for seasonal orders for the Thanksgiving and Christmas holidays, he says in the NYT article, adding that companies which missed shipment deadlines must now either send products by expensive air freight, pay a penalty to retailers for late shipments, or face canceled orders.

In some good news, however, Supply Chain Management Review reported yesterday that officials at the Port of New York and New Jersey announced cargo operations are being restored. Indeed, two terminals in Port Elizabeth, N.J. started receiving inbound vessels on Sunday. The Port Authority and two more terminals—Port Newark Container Terminal and Global Terminal—were scheduled to reopen yesterday. Port Newark Container Terminal also is expecting vessel traffic to resume soon.

The damage incurred by the huge tidal surge could have been much worse, says Aaron Ellis, a spokesman for the American Association of Port Authorities (AAPA), in the SCMR article. Each port has a hurricane preparedness and business recovery plan that they put in place in advance of potential approaching hurricanes, like Sandy. These measures are designed to first protect lives and worker safety, and then to secure equipment and facilities to minimize potential damage to cargo and/or facilities, he says.

But in an interesting twist, there are those who believe storms like Sandy will become the norm, rather than the exception. Princeton University professor Michael Oppenheimer told CNN that Sandy is an example of storms to come. Bigger storms and higher sea levels will pile on to create what Oppenheimer calls a “growing threat” in coming decades. Furthermore, New York is highly vulnerable, he says.

With that in mind, I am interested to hear more about the ports’ disaster plan, as well as how supply chains are coping with the disruption. What is your company doing differently in the wake of Sandy?

 

As details continue to emerge about the deadly meningitis outbreak stemming from poor manufacturing practices at New England Compounding Center (NECC), the pharmacy at the center of the expanding scandal about contaminated dosages of a steroid, lawmakers have begun to assemble legislation that would give the Food and Drug Administration improved authority to regulate large pharmacies that mix customized drugs.

The Wall Street Journal now reports that Rep. Edward J. Markey (D., Mass.) plans to introduce a bill that would require large compounding pharmacies to meet the same sterility, manufacturing, and record-keeping standards as those required of large drug makers. Rep. Rosa DeLauro (D., Conn.) also plans to introduce legislation after the election to strengthen the agency’s regulatory authority.

Compounding is a traditional pharmacy practice in which a pharmacist alters, mixes, or recombines ingredients to make a drug that meets the special needs of a patient with a physician’s prescription. But in recent decades, officials say some compounding operations have grown to resemble that of full-scale manufacturing without meeting FDA standards.

So far, the outbreak has caused 28 deaths and 386 cases of fungal meningitis among patients in 20 states, according to the Centers for Disease Control and Prevention.

Rep. Markey has also issued a report, “Compounding Pharmacies, Compounding Risks,” which documents 23 deaths and at least 86 serious illnesses, since June 2001 involving compounding pharmacies nationally, which does not include the recent NECC case. Markey also says that the risks of allowing compounding pharmacies to go largely unregulated have been recognized for years, but a patchwork of state regulation, incomplete and often inaccessible information about serious health issues caused by compounding pharmacies, and industry efforts to thwart better government oversight have complicated efforts to understand the true scope of this problem.

I was also interested, as Reuters reports, to see the report drew an immediate response from FDA Commissioner Margaret Hamburg, who said the agency is committed to working with Congress and others to garner the authority needed by FDA to help prevent tragedies like the NECC case from happening again.

“Over the years, there has been substantial debate within Congress about the appropriate amount of FDA oversight and regulation of compounding pharmacies,” Hamburg said in a statement emailed to Reuters. “But unfortunately, there has been a lack of consensus and many challenges from industry.”

The congressman’s report, based partly on documents gathered by investigators in the House of Representatives, says the FDA has issued dozens of warning letters against compounding pharmacies since 2001. But the report says the agency has based its enforcement actions on relatively weak, nonbinding guidance documents since a 1997 law granting it oversight of “new drugs” was struck down in U.S. courts more than a decade ago in cases brought by compounders.

According to an article in Rollcall, Markey says his bill will address a “regulatory netherworld” of oversight by requiring pharmacies that sell compounded drugs across state lines to register with the FDA. It also would give the agency authority to thoroughly inspect pharmacy facilities and to tell patients that compounded drugs have not been approved by the FDA.

Markey isn’t alone in that line of thinking. In addition to Rep. DeLauro, the Senate Health, Education, Labor and Pensions Committee and the House Energy and Commerce Committee are conducting investigations into NECC. Lawmakers also have sought information on the pharmacy and its oversight, and some have called for hearings. All of which seems, at least to me, as if new legislation is imminent.

What do you think? Should large compounding pharmacies operate under the same standards as pharmaceutical manufacturers?