Pfizer's Accent on security: An Interview with Peggy Staver
Sean Murphy -- Supply Chain Management Review, 1/1/2009
In recent years, problems with counterfeit drugs have motivated the pharmaceutical industry to keep better track of its products. Most notably, the state of California passed legislation in 2004 that will eventually require e-pedigrees, an electronic record that documents the change of ownership of a product. The drug manufacturer would be required to initiate the pedigree for all pharmaceuticals distributed, right down to the pharmacy level. While this law only pertains to drugs sold in California, it's been reported that the pharmaceutical industry is moving as a whole toward a national tracking system to, among other goals, protect against counterfeit drugs.
Pfizer Inc, known for such popular brand-name prescription drugs as the anti-impotence drug Viagra, the arthritis treatment medication Celebrex, and the cholesterol control drug Lipitor, was one of the first companies to explore how it could use RFID technology to further secure the U.S. supply chain from the threat of counterfeit drugs. The company now is in the process of employing a complex new system that utilizes, among other technologies, RFID tagging on the item level.
Peggy Staver, director of product integrity for Pfizer's U.S. Trade Group, was involved in that effort from the start. A 27-year veteran in the pharmaceutical industry in a variety of roles, she is now responsible for Pfizer's e-pedigree testing and implementation and is a member of Pfizer's Product Integrity Work Group. She also works with the company's global security organization on investigations of suspected counterfeit or adulterated Pfizer products. Here, she talks with Supply Chain Management Review Associate Editor Sean Murphy about what her company is doing now, how it got to this point, and what she sees in the future for Pfizer, RFID, e-pedigree and the pharmaceutical industry.
Q: What is the status of your RFID program? Have you deployed it now?
A: We have implemented RFID in the U.S. on all of our Viagra packaging at the bottle, case, and pallet level, and that's been in place since December, 2005. In addition, we've implemented RFID at the case and pallet level on all of our Celebrex for the U.S. market. Those who have chosen to invest in the technology (such as our trading partners) can read either the RFID tag or the redundant 2D bar code and are able to authenticate the serialized information.
Q: What do you mean by “serialized” information?
A: The reason we're looking at RFID and 2D bar codes is that they are data carriers for the unique serial numbers we are applying to our product packaging. You're able to read several items at once without having to scan individual items, and the data carrier enables us to include a unique number. That unique serial number is written to both the RFID tag and the 2D bar code and allows us then to track the items by the serial number from the manufacturer to the pharmacy for each individual package. That's what I mean by serialization.
Q: And how do you define an individual package?
A: Individual stock packages are saleable units that Pfizer would sell to the market. Many of our products are then put into a vial, at the pharmacy level, and there is no serialization applied to that level. We are utilizing serialization in the supply chain to track from the point of first commercial sale by a pharmaceutical manufacturer through to the point that it's received at a dispensing location, such as a pharmacy. For example, Viagra 100mg 30-count tablet bottles all have a National Drug Code (NDC) number on them. That number is printed, as well as encoded in a linear bar code on our packaging. So all Viagra 100mg 30-tablet bottles have that same number on them. There's nothing that distinguishes one bottle from another other than they may be from different lots. With similar bottles from similar lots, you wouldn't be able to distinguish between two bottles. With serialization, what we're talking about is putting a unique number on each of these 30-count bottles of 100mg Viagra so we can track each individual bottle through the supply chain.
Q: So any place where there's a serial number on a product, whether we're talking about a pallet, or a case, or an individual package, that's where RFID comes in?
A: We're utilizing both RFID and 2D bar codes, and they have the same serial number on both of these data carriers.
Q:So they're redundant on purpose to help track them?
A: Yes, exactly.
Q:From a technical perspective, is your serialization program something that's been added on to existing software and management systems, or did you build everything from the ground up?
A: At this point, we have not yet integrated serialization extensively into our existing systems, but we also didn't build everything from the ground up. Basically, we've implemented a new application to provision serial numbers to our packaging lines and then we commission those serial numbers when they are utilized on a packaging run. We then store that information so it can be accessed by anyone else in the supply chain who is trying to validate the serial number found on the packaging of Viagra or Celebrex. That is all stand-alone right now. We implemented this serialization management process using products that are on the market today, and then integrated that into our packaging line so that we could actually print the 2D bar code and write the serial number to the RFID tag as the bottles are moving across our packaging lines. We also had to implement technology in our distribution centers so that we could capture the serialized information before it's actually shipped to customers. We associate the serialized numbers with our customer shipments so we know which serialized products we ship to which customers.
Q: Do you manage and store the data collected through serialization in house, or do you use software as a service or other third-party applications or services?
A: We are using a third party to host our serialized information and help us enable authentication and our pedigree implementation. We have integrated the serialized information into some of our legacy systems, but not to a large degree. So there's some integration internally and there's some information that's being hosted externally by a third party that enables our authentication capability and our ability to be able to generate pedigree to share with those trading partners who are interested in beginning to implement these solutions.
Q:And how much of your serialized data is involved in actual day-to-day operations?
A: We have fully implemented serialization in a production mode with a limited number of trading partners, but most of the work that's being done with the extended supply chain is in a test environment and on a limited scale.
Q: What barriers did you encounter with implementation?
A: Our initial focus was on ensuring we could actually properly record and read the RFID tags and manage the serialized information. More recently we have concentrated on testing the interoperability of our systems with our trading partners and exchanging serialized information. Of course, you can imagine there are multiple solution providers who offer pedigree solutions and authentication capabilities. Trying to ensure that we can exchange information between these various solution providers' products is a significant challenge that requires a great deal of time to do the necessary testing. Again, ensuring we can secure the data and exchange it in an efficient manner across all of our trading partners—when there are thousands of trading partners in our supply chain—is significant. The time and cost and complexity involved in doing the necessary testing and implementation across the entire supply chain is also a barrier.
Q: You mentioned having RFID tagging on the bottle, case and pallet level for Viagra. How long did it take you to put that in place?
A: Once we made the decision that we were going to serialize Viagra and kicked off our project team, it took us one year to implement the serialization. But actually prior to that time, we were working with industry though cross-functional and cross-industry initiatives such as the Accenture Jumpstart project. In 2003 and 2004, the industry effort led by Accenture brought together supply chain participants—manufacturers, wholesalers, retailers and the industry trade association—to assess the potential of technology such as RFID, to enable serialization and to help us further secure the supply chain. So we've actually been engaged, since late 2003/early 2004, with several industry initiatives, the Jumpstart project being the first one.
Q:Are you employing serialization just on products being distributed in the U.S., or is this worldwide?
A: My involvement in serialization is specific to the U.S. There are other countries also looking to implement serialization, however to my knowledge we are not using RFID in any other countries.
Q: Was the California legislation requiring e-pedigree the impetus for actually starting the serialization program, or did you have other reasons?
A: The reason we initiated the program was because of concerns for counterfeit product in the U.S. supply chain. Shortly after we had the counterfeit Lipitor experience in the U.S. in 2003, we began to pursue technology solutions we could utilize to help us prevent or deter counterfeiting in the U.S. market. The pharmaceutical industry as a whole also began to assess then, how could we try to prevent counterfeiting through the use of serialization and other technology. We also looked at changes required to business practices, enforcement efforts, and laws or regulations that might help us further secure our supply chain. From our experience with counterfeit Lipitor, we knew that a number of areas needed to be addressed in the U.S. supply chain, and that's what drove us to start looking at these options. Technology was only one of those.
Q: Was there ever any discussion about whether or not Pfizer anticipated a kind of ROI in using serialization? Was that even a factor or were you just worrying about security?
A: From the beginning, our driver for this has been supply chain security and patient safety, period. In fact, with our first two projects, Viagra and Celebrex, we did not approach these from an ROI perspective—we approached it from the patient safety channel security perspective. Now, as we look at the implications of implementing potentially across our entire product portfolio, we're trying to understand better the potential business value, or the cost-benefit profile of implementing across all of our products. Pfizer has supported a risk-based approach to serialization—we believe our initial efforts should focus on serializing those products we feel most susceptible to counterfeiting, theft and diversion. As a manufacturer, we know what those items are, because we're aware of what has been targeted in the past by counterfeiters. Our strategy has been to try and gain acceptance for a risk-based approach to serialization, and then assess the potential of the technology to further secure the supply chain. We also need to assess the impact of serialization on the supply chain in terms of cost, efficiency, the impact on health care expenditures and other factors before we decide whether or not it's imperative to serialize all products.
Q: Were there any benefits you discovered that you didn't expect to see in implementing this technology?
A: We believe that there are some potential benefits down the road, however, many of those are largely dependent on supply chain-wide engagement in this process. Pfizer putting a serial number on a package of Viagra doesn't really accomplish a whole lot unless others in the supply chain are actually utilizing that information. It's important that we have supply chain-wide engagement—from manufacturer through to pharmacy—for us to realize the majority of the benefits. Of course there are some potential internal benefits in terms of more efficiently being able to receive product in our facilities that are RFID-enabled, so there's some opportunity there for us. But typically as a pharmaceutical manufacturer, we've had to have pretty well-grounded inventory management systems in place long before we started talking about serializing products with unique numbers, because of the expiration dating on our products and the need to be able to facilitate recalls, for example. So we know very well as a manufacturer, where the lots that we produce have been shipped once they leave our facility. What we don't know is what happens to them after they leave the wholesale distributor, and that's what we're promoting in terms of the value of lot-level tracking with pedigrees.
Q: So you've discovered that using RFID on the bottle level for Viagra has been useful. Are you planning to use it with some of your other products down the road?
A: Our investment so far in RFID has been largely a part of our commitment to understanding what is involved in implementing serialization with either RFID or 2D bar codes. Back in late 2004 and early 2005, in conjunction with the FDA, we actually made a commitment to implement RFID on Viagra and work to assess the implications of having serialized information on bottles, cases, and pallets of products moving through the supply chain. Our goal was to understand process implications, exception handling issues, data exchange, and other factors. As we go forward, our decisions about whether we invest in additional products will be driven by what products we feel are most susceptible to counterfeiting, theft and diversion, the operating implications and federal and/or state legal requirements.
Q: How much of a barrier to the RFID implementation was the price per tag?
A: It's much more than the price per tag. There are many issues or barriers to adoption today the most significant being the lack of industry alignment and a clear vision of what the end-state will be. We've got many different state requirements out there today for pedigree. Only one state, California, has a serialization requirement today, and even that requirement has been pushed out to 2015 and 2016. And, to my knowledge, all laws are technology neutral. In other words, no state or federal law requires the use of RFID or any other specific data carrier for that matter. We support this neutral position on the technology to be used and believe the market and industry will ultimately determine which technology prevails. So varying state requirements and uncertainty around potential federal requirements regarding pedigree, serialization, track and trace, and the data carriers to be used has become a barrier.
What we will be required to do, by either state or federal regulation, and what we will decide as an industry we should do to further secure the supply chain, have yet to be determined. Will we ultimately decide we should serialize all products down to the unit level so we can track every individual product through the U.S. supply chain? Will the market dictate what technology should be used, be it RFID or 2D bar codes? Right now, many in the industry are pursuing 2D bar code solutions and not RFID because it's consistent with what's happening in certain European countries. Other companies are looking at a combination of RFID and 2D.
So, as you can imagine, with more than one solution, potentially, for the data carrier in the pharmaceutical industry, that creates challenges for our trading partners to know what they need to invest in and implement. Is it RFID? Is it 2D? Is it both? Is it linear bar codes? What are the standards that will exist around that technology? We need to know that, so we can encode our serial numbers in a standard way and facilitate the efficient exchange of information about those products across the supply chain.
I think also getting the industry to move en masse to implement is a significant challenge for many reasons. Cost is only one of those reasons. There are competing priorities in organizations across the entire supply chain and there are a lot of issues to be addressed before we can feel confident that not only manufacturers, but wholesale distributors and retailers can move forward with a clear vision of what we are implementing. With limited supply chain engagement, we aren't able to achieve all of our objectives in terms of enhanced supply chain security, and that is our primary driver—supply chain security and patient safety.
Q: What other barriers do you see to widespread RFID/serialization implementation?
A: There are standards that are still required for us to know as an industry, what type of standard solutions we should be implementing. It is also extremely costly, time consuming and complex to implement serialization, not only from a manufacturer's perspective, but across the entire supply chain, because as you can imagine, from a manufacturer's perspective, just getting a unique serial number on every unit we produce is a significant task. We appreciate that we were one of the early adopters, and that implementation time and cost will eventually decrease. But it's still a very significant effort to implement serialization, and probably more importantly, to have all of our trading partners—and all of our trading partners' trading partners—implement the technology necessary for us to exchange information and efficiently move product through the supply chain. It's a huge undertaking, and one we believe will take several years to implement.
Q: When you say standards, are you talking about your company specifically, the pharmaceutical industry, or industrial standards in general?
A: I'm referring to global standards, because many of the manufacturers who are selling products in the U.S. have plants around the world where product is manufactured. Serialization is being implemented not only for the U.S. market but for other world markets; therefore there's a need for a standard way in which we serialize our product, and also standards around things such as frequencies for the RFID tags, and standards around how we will generate pedigrees and populate those pedigrees and exchange serialized information. So the standards area is a very broad one and there's a great deal of work currently going on within the GS1 standards-setting organization. They were the group that was initially involved with the linear bar code standards and they are now working to help industry establish the standards necessary to support the use of RFID and 2D bar codes.
Q: Do you consider the pharmaceutical industry to be a leader in RFID adoption compared to other industries?
A: No.
Q: Who do you think is leading the way?
A: I don't know who the “leader” is outside of the pharmaceutical industry, but there have been many RFID applications for years by the defense department in terms of asset tracking. It's widely used in fast-moving, high-value consumer goods. Wal-Mart's been a leader in that regard. I can definitively say the pharmaceutical industry is not leading the way in terms of RFID implementation. In fact, I still think for several years to come, many manufacturers will be serializing with 2D bar codes rather than RFID, because there are many issues yet to be addressed around RFID implementation. There are limits in terms of which products RFID can be used on, because the necessary testing hasn't been done to ensure that there is no impact on the quality of certain types of products. For products like what we're using it on, we have done the testing to know there isn't an adverse impact on solid oral dosage forms in a plastic bottle. But when you start talking about biologic products and other liquid products or those packaged in foils, there's a great deal of work that still needs to be done. Because of that, I believe 2D bar codes will exist for many years to come, and for some products, may be necessary for an extended period of time. Even if all the other cost and standards issues and process implications were all addressed, the industry still may be limited with certain products and devices, in our ability to use RFID.
Q: Is the next step to pursue fuller integration of RFID in Pfizer's supply chain?
A: We will continue to work with our trading partners in 2009 to further test the technology, but most of our focus is on process. We need to see if the technology develops sufficiently on a cost and performance basis to meet the industry requirements, and further evaluate the process implications of implementing a tracking process for serialized items in the supply chain. As you can imagine, there are pretty significant implications of being able to do that, and so that's what we've been trying to engage with our trading partners on—what's required to implement serialization and pedigree. We have been testing, with some of our trading partners, our ability to successfully exchange pedigree and serialized information; the interoperability of our solution between what we have implemented, as well as what our trading partners have implemented to ensure that works. We're also addressing how we handle exceptions to this process.
Q: What advice do you offer to supply chain managers looking to get on board with RFID?
A: The primary thing I would say is that there is no substitute for hands-on experience. There's a great deal you can learn from literature and others' experiences, but even with our own implementation, each implementation seems to be unique. Some of the factors that might impact the technology could vary between facilities. The line automation equipment, if you are encoding your serial numbers on your packaging line, the line speeds, facility constraints… all these factors can vary by site and will impact the time and cost that it takes to implement RFID on your packaging line. If you are considering it, it would be important to do some initial pilot work and begin to gain that hands-on experience with the technology as well as to identify some trading partners who might be willing to work with you so that you can understand implications beyond your own four walls in terms of the technology.
Q: Does a person need an extensive background in any particular field before plunging into something like RFID or serialization? What skills are more helpful to have than others?
A: I don't think it's necessary to have an extensive background because this is still relatively new in pharmaceuticals. What I think is most helpful is to have a strong cross-functional team. That's been the primary reason we've been successful internally is that we've had committed colleagues from across the organization; IT, our distribution centers, regulatory, our manufacturing and packaging colleagues, supply chain managers, and our trade organizations have all worked very closely together.
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