Pharmaceutical and ICT: A Needed Partnership
Friday, April 23rd, 2010This piece was commissed by ITWeb/Brainstorm for April 2010. Original Title is “Regulation is the Name of the Game.” Hilton Tarrant co-wrote the article.
Pharmaceutical players need to be able to track everything.
Regulatory and legislative requirements are top of mind in the pharmaceutical sector.
“Our customers are coming under a demanding set of regulations,” says Keith Fenner, sales director at Softline Accpac. “This is a highly regulated industry.”
Ironically, Accpac hasn’t traditionally targeted the sector, largely because of the “complexities around the process or batch manufacturing, formulation management, weight calculation, potencies…”
Jane Thomson, MD of Softworx, says that “validation is very important”. Companies operating in “markets covered by the [US] FDA approval and the MCC regulations in Europe” have a lot of complexity added to their business, she adds. “When they do implementations, they have to have everything validated, right from the software to the processes in their business.”
There are also challenges around traceability, believes Fenner. “Everything from full-lot traceability and control to quality assurance” needs to be managed.
“At any point in time, you have to manage inspections and these things have to be process-driven.”
“It can’t be about ‘we decided to inspect this batch and not that one’,” he adds. “And it can’t be done on an Excel spreadsheet somewhere! Even the distributors have to be stamped and approved,” says Fenner.
A number of pharmaceutical players have made the decision to outsource their distribution function. Fenner says the split is about 50/50 among his clients.
Most of the manufacturing of pharmaceuticals takes place offshore, and Fenner explains that Accpac has mostly been “asked to help with complying in a warehouse world”.
“I’ve been reading in the market about guys starting to rationalise and focussing on what they are good at,” says Fenner.
His clients are saying things like: “My job is to get product into the country at the lowest cost possible to make the highest margin. How we push that out into distribution, we’ll leave other guys to figure out. Everyone is trying to streamline that process … but you cannot get around the complexities of the legislation and the regulations,” says Fenner.
“Our clients need to still have visibility into that supply chain … whether their stock is on consignment or sitting in a warehouse. They still have to manage the expiry dates.”
And for this, you need a collaborative supply chain.
Thomson says Softworx’s biggest client in the space, Aspen Pharmacare, has – like its peers – expanded rapidly over the past few years. The manufacturing and distributing of products in other territories adds “huge complexity into their supply chain”.
“Their business needs to be extremely responsive and flexible,” because of this growth, she says.
“They’re doing rollouts of their ERP systems in four to six weeks in some of their territories. So in terms of their ICT requirements, there needs to be a rapid response.”
Fenner agrees, saying: “The questions that are coming at us are around being responsive.”
Thomson also says that clients in the sector are looking to move some of their systems into the SOA space.
“We’re seeing on-use, on-demand type of software emerging now.”
And she says this is being driven by “local business in their desire to remain competitive and to grow market share.” Like other sectors, there is a lot of consolidation taking place in the industry. This is being driven by market forces.
Both Fenner and Thomson haven’t seen the recession having a major impact on ICT spend in the pharmaceutical sector.
“The companies that we deal with are very cost-conscious,” says Thomson. “They don’t have huge IT budgets, so they are always looking for cleverer, cheaper ways of doing things.”
A new approach
The global pharmaceutical industry generates most of its revenue from developed countries. In addition, 14 out of 15 top global firms are in the US or Europe. The global growth of the pharmaceutical market is expected to be positive as a large population in Western countries age.
Developing countries also have potential as their economies strengthen and appropriate protection for patented products exists. In fact, the market in developing countries is growing faster overall than in developed countries.
According to the Middle East and Africa Pharma Sector Forecast to 2012 by RNCOS, the Middle East/Africa market will grow 11 percent from 2010 to 2012.
Africa’s challenges, like high cases of disease and booming populations, are actually huge market opportunities for pharmaceutical firms. This also presents huge opportunities for the technology sector.
For example, Cipla, an Indian pharmaceutical firm, produces generic drugs. African countries import many generic drugs from India, but a change in international patent laws disrupted some of this market. So, Cipla entered a public/private partnership with the Ugandan government to produce generic antiretrovirals (ARVs) locally. The lab, Quality Chemical Industries, will help resolve the problems of availability and cost of ARVs in the local Ugandan market while allowing Cipla to continue doing business in Uganda.
In another African region, Sproxil is tackling the problem of counterfeit drugs. While difficult to peg, the Transnational Trafficking Report 2009 by the United Nations Office on Drugs and Crime says that 50 to 60 percent of drugs circulating in Africa are counterfeit.
Sproxil has innovated so that consumers can verify the authenticity of drugs. The strength of the model is the use of an existing platform, which a broad consumer base understands and uses – the mobile phone. A consumer transmits a code attached to the drug package via SMS. Then, the consumer receives a return SMS, indicating whether or not the drug is okay.
This alone can improve the health and safety of many Africans. But Sproxil also provides information, e.g. warnings and instructions, to consumers. And consumers have access to a customer contact centre for additional assistance.
Ashifi Gogo, the CEO, says that these additional aspects “can drive consumer, education, and feedback. It will help Nigeria’s National Agency for Food and Drug Administration (NAFDAC) tackle some key issues in a market where there is little consumer interaction.”
In a broader context, Gogo believes Sproxil’s form of consumer interaction, based on crowdsourcing, may inform government policy one day.
There is an upside for governments and pharmaceutical firms that engage the Sproxil service. It helps them strengthen their brands by promoting quality and concern for customers. In addition, it reduces the potential for counterfeit drugs to be passed off as those provided by the government or pharmaceutical firms.
And finally, Sproxil’s approach helps the firm create and grow its own market. As consumers use the service, they will come to expect it as a service for more of the drugs they use. And, pharmaceutical firms responding to consumer demand will seek the Sproxil solution.
