GDP Guidelines vs. Supply Chain Cost



Cold Chain IQ
03/28/2012

The new good distribution practices (GDP) guidelines released by the EU will make it "virtually impossible" for companies to operate at a profit with regards to big pharma logistics.

Under the new rules, which are designed to stop the flow of illegal fake drugs into the market, any place where drugs are stored for more than 24 hours would need to be classified as a specific storage site, and would need to obtain wholesale distribution authorisation, as they will now be seen to be partaking in a "regulated activity".

This rule would also be in place for any drugs in a refrigerated environment which are held at a site for any period of time, making it particularly problematic for cold-chain supply.

The EU said that these new regulations are important as the current guidelines, which were brought in in 2001 make it too easy for the integrity of the supply chain to be breached, with the ability for falsified drugs to make their way into the market.

Its report, entitled, Commission Guidelines on Good Distribution Practice of Medicinal Products for Human Use, said: "The quality and the integrity of medicinal products can be affected by a lack of adequate control over the numerous activities, which occur during distribution and it is also necessary to address the threat that falsified medicinal products pose to the distribution channel."

However, pharma logistics companies have reacted in a less than favourable way to the new guidelines, with delivery company UPS saying that it will become virtually impossible for it to operate with the cost increase that is likely to take place.

UPS said that the cost of logistics in the supply chain would rise significantly thanks to these new guidelines. Its position paper, outlining its view on the new guidelines, stated that the company feels the introduction of authorisation, which brings with it site-by-site inspections will only serve to greatly increase the cost of medicinal logistics.

It also highlighted the issue which exists with weekend stationary products. UPS said that many products which would previously not have needed to be regulated, even under the new guidelines will now need to be because of the fact that many products sent on a Friday will be stored over weekends.

It was also argued that this more stringent regulation would leave a shortfall in companies available to offer the service thanks to increased costs, while all airports in the EU would effectively need to become authorised at massive cost.

Staffing could also be an additional cost for companies which need to bring themselves up to speed with the new guidelines, due to the fact that personnel are required for a number of different tasks throughout the distribution of the medicines.

These tie in with the new guidelines also announced for the good manufacturing practices (GMP). This means that staff are needed to: ensure that medical products are authorised in accordance with EU guidelines, storage conditions are maintained and checked to ensure they adhere to regulations, contamination from other products is avoided, adequate turnover of products is achieved, and that products are stored safely and securely to avoid the risk of unregulated drugs getting into the supply chain.

However, because these staff are required to be permanently available, it will mean that there are significantly higher costs than in the past, making it far more difficult for companies to operate.

Another aspect of the GDP guidelines which have faced opposition on the grounds of cost relate to the segregation of certain categories of pharmaceutical products. This would mean that legitimate stock would need to be stored separately, while other categories would all need to be held elsewhere, like rejected stock, returns, suspected falsified stock and recalled items.

Global healthcare firm MSD said that this was completely impractical, due to the fact that combining this with the stricter segregation required for cold chain supply products would mean far greater costs in setting up storage sites, making it impossible to operate.

The company's regulatory affairs scientist Lisette Vromans said that the new guidelines are "excessive and not realistic".

This opinion was backed up by Dr Kerry Hawitt, associate director, quality compliance, at Shire, who said: "Why should medicinal products not intended for the union market be kept segregated from union market products when standard warehouse controls are sufficient to prevent mix up of products for different markets?"

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