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From tactical to strategic: tracking the evolution of global clinical supply chain management.
The role of clinical supply chain management is changing dramatically. While often managed after the clinical operational strategy has been established, clinical supply professionals are now playing a more active role in development and study planning, managing mission critical activities, forecasting, and mitigating operating risk. A number of factors have contributed to this role transformation.
The rising volume of clinical trial activity combined with the difficulty of recruiting patients in mature markets (e.g., the United States and Western Europe) has prompted sponsor companies to engage larger numbers of investigative sites worldwide. Clinical supply chain managers face operational complexities introduced by the globalization of clinical research including producing and distributing supplies to remote regions around the world under a wide range of regulatory requirements on time. In addition, pharmaceutical and biotech companies conducting trials have more service providers handling all aspects of clinical operations than in the past, presenting increased logistical challenges for clinical supply managers.
Tighter drug development budgets have pushed clinical supply managers to seek more efficient and lower cost solutions. In addition, more complex protocols, including those for adaptive trials and targeted therapies, have made forecasting dosage and quantity of investigational product more difficult.1 The trend towards targeted products has made the drug itself more expensive to produce. As a way of addressing the limited availability and higher costs of biologics and comparators, clinical supply professionals have looked to more tightly manage quantities of investigational drug and minimize overages.2 Additionally, as the proportion of biologics in company pipelines has grown, more investigational drug products have required cold-chain storage throughout the clinical supply chain.3
There is more pressure to start-up and perform studies faster. The push to move quickly into clinical testing leads to less time for active pharmaceutical ingredient production and stability testing before the product must be sent to the investigative sites.4 Supply chain professionals must be informed of local import and export regulations in an increasing number of countries and must ensure that supplies arrive at each location on time, taking into account potential shipment delays.1 Finally, competitive trial enrollment affects forecasting; clinical supply professionals are less able to predict which sites will need study supplies at what time.
As drugs are currently being shipped to many different global markets with the demands of time zones, various climates, and multiple carriers, there is a need for companies to adopt new strategies. It becomes critical to integrate an organization's supply chain into overall clinical strategy. While adoption of new forecasting tools and technology can assist with simulation or forecasting, many of these resources require both staff and resources to implement properly. As pharmaceutical and biotech companies are faced with reducing their operating costs, they are now less able to invest in the resources that would allow for effective implementation.
In response to factors challenging their function, clinical supply professionals have implemented sophisticated forecasting methods1 and trial simulation techniques5 to better predict when and where clinical supplies will be needed. Some clinical supply managers have been using just-in-time or on-demand packaging and labeling2 or regional depots to address changes in the clinical supply chain strategy or forecasting during a trial.3 Newer technology solutions including integrated systems for clinical supply management6 and interactive response technology (IRT)3 which includes interactive voice and web response services (IVRS/IWRS) are being utilized. Sponsor companies have also turned to outsourcing their clinical supply needs, beyond packaging and labeling, to contract service providers to leverage their expertise, experience, and scale efficiencies.7
In order to track this unfolding transformation and to project the future role of the clinical supply management function, the Tufts Center for the Study of Drug Development (CSDD) conducted a study to assess the global clinical supply chain market. The study was supported by an unrestricted grant from Fisher Clinical Services. The results of this study offer insights for sponsors and CROs looking to more effectively manage the clinical supply function.
The Tufts CSDD study used a mixed methodology comprised of a survey and a roundtable discussion. This approach provided Tufts researchers with the opportunity to collect both quantitative and qualitative data about the current and future state of supply chain management. It also built on the survey results through information provided by senior managers in a broader discussion. An online survey was sent to senior-level clinical supply chain professionals and then a roundtable discussion was held with 12 industry professionals from nine pharmaceutical and biotech companies. Tufts CSDD also sent invitations to roundtable participants to complete the survey prior to the meeting. In the roundtable meeting, Tufts CSDD shared the survey data and facilitated a discussion around key topics to gain additional insight into the survey findings and current market trends.
Tufts CSDD developed the online survey of multiple choice and free response questions for senior-level managers in collaboration with clinical supply experts from industry and provider organizations. The survey link was distributed to Tufts CSDD contacts and commercial mailing lists by e-mail during January and February 2011. Participants were assured that responses were anonymous and confidential and that responses would be reported only in aggregate form.
The survey examined clinical supply professionals' experiences and perceptions about the global supply chain and explored current trends, strategies, and practices. Survey questions focused on the following key areas: background and experience of the clinical supply manager; roles and responsibilities; management challenges and strategy; communication; technology and use of resources; outsourcing approaches; global regulatory issues; metrics used to measure quality and success; and future outlook. The roundtable participants explored many of the topics covered in the survey but also discussed other critical areas within the global clinical supply chain.
Tufts CSDD collected 20 completed surveys from respondent organizations across large- and mid-sized pharmaceutical and biotech companies. Respondents were an experienced group with a median of 20 years of experience in the industry and 3.5 years in their current position; 80% were either vice president or director level staff. Respondents were also asked to identify the top three therapeutic areas in which their company conducts trials. The primary areas were oncology (n=13); CNS or neuroscience (n=9); cardiovascular (n=8); and metabolics/endocrine (n=7).
An overwhelming majority of survey respondents (80%) indicated that their companies had a centralized supply chain and the remainder reported it was decentralized. Respondents reported to various departments including R&D, global clinical operations, development manufacturing, global pharmaceutical sciences, and technical services. Participants within the roundtable discussion indicated that the supply chain organizational structure had become more complex. Some participants reported that their supply chain was divided into two separate functions: a supply chain function responsible for drug supply activities and a manufacturing function which oversees execution.
A senior-level supply chain manager's primary responsibilities included forecasting; managing supplier relationships; and tracking supplier performance metrics. Managers reported they were also responsible for selection and assessment of suppliers; developing outsourcing strategy; developing contracts; and negotiating contracts (Table 1). The survey also focused on identifying tools used for evaluating the accuracy of forecasting. Given that accurate forecasting has become the foremost responsibility of clinical supply professionals, it was surprising that many respondents still forecast manually. Seven in 10 respondents reported using manual approaches (i.e., Excel spreadsheets or mathematical modeling); 75% used forecasting programs; while 55% reported using web-based approaches (Table 2).
The most widely discussed technology in the roundtable meeting was IVRS/IWRS for managing global studies. A few group members indicated using IVRS/IWRS for 90% to 95% of their studies with a few companies having internal IRT systems and others outsourcing this activity. Many participants reported within their clinical supply function they have staff resources to run predictive algorithms in IVRS/IWRS. However, IRT also has limitations as it was traditionally used to support inventory management and randomization but now is being used for other functions beyond its original purpose (e.g, forecasting and estimating overage). Use of this technology may not represent the best strategy for optimizing supply chain management as other technologies are available which have been specifically designed for forecasting.
In addition to the new challenges of traditional clinical supply tasks, roundtable participants related that supply management has evolved into a more demanding and complex role that includes a diverse range of responsibilities. The role requires increased cross-collaboration and cross-functional coordination with input from various departments including clinical, QA, finance, IT, regulatory, and site staff.
In particular, as responsibilities of forecasting and risk management have moved to the forefront, clinical supply professionals viewed these tasks as requirements for study success. Survey respondents identified forecasting supplies as the most demanding resource requirement area. Roundtable members indicated that cost pressures have led to a decrease in study drug overproduction; therefore, accurate forecasting was essential to having the study drug available for patients.
Roundtable participants identified sourcing comparator drugs as a critical component of their role, and the comparator could require as much consideration as an investigational drug. Managers encountered a number of challenges in sourcing a comparator drug for a clinical trial. One key challenge can be seen in managing costs; as with investigational drugs, fluctuation in the demand for comparators as trial recruitment varies impacts global sites and numbers of patients involved. The unpredictability of enrollment may cause managers to over-source comparators. Given that the cost of comparators is spiraling and the demand for studies using comparators increases with the need for proof of efficacy of new drug therapies, the costs can be prohibitive for companies.
Clinical supply participants acknowledged other demands placed upon them when purchasing comparators; certain global markets require that local comparators be purchased and prices vary widely. There may also be import and export restrictions and different GDP/GMP requirements. Comparator drugs may need re-packaging or re-labeling, and there are often local regulations that must be met in completing these activities. Given the difficulties in comparator sourcing and the limited control the sponsor has over other companies' production and distribution, roundtable participants were interested in the establishment of a comparator sourcing coalition. They felt that a forum to discuss the availability of drugs and establishing cooperative strategies for providing them would reduce many of the difficulties in purchasing and distributing comparators.
Regulatory compliance is also a key function of the clinical supply role. This role includes managing the required documentation and labeling requirements of different countries as well as their translation. These responsibilities require keeping-up-to-date with changing regulatory requirements. Approximately two-thirds of survey respondents indicated that their organization is responsible for keeping current on regulatory requirements while 11% reported that a provider is responsible. The remainder (22%) reported that regulatory activities may be handled by either their Âcompany or the provider depending on the study. ÂRespondents indicated that they most frequently monitor the FDA, EMA, and Japanese regulatory agencies. Other agencies that respondents track are the State Food and Drug Administration in China and the Drug Controller General of India.
Nearly 60% of managers who responded to the Tufts CSDD survey indicated that they outsourced individual services for each trial. More than half of survey respondents reported that kit destruction was their most frequently outsourced activity, closely followed by returns, and then distribution and cold chain logistics (Figure 1). Nearly two-thirds of respondents indicated that establishing regional hubs would facilitate management of their supply chain, and 60% reported using functional and tactical/study-specific approaches to outsourcing. Roundtable participants reported variation in the degree of supply chain outsourcing. Some outsourced one or more activities individually (e.g., manufacturing; distribution; and IRT), while few companies outsourced their entire supply chain. A major theme, however, was the belief that supply chain outsourcing will increase based on their company focus on cost containment which includes decreasing internal headcount while increasing the individual level of responsibility among current staff.
Clinical supply professionals ranked their foremost management challenges as short lead times, operations-supply team communication, protocol readiness/accuracy, the need for better forecasting, and a lack of visibility of their supply chain (Table 3).
Participants in the roundtable discussion indicated a key challenge was minimizing waste and planning for minimum overage across studies. Although many of the participants used manual approaches to forecasting, some use of more sophisticated methods, such as Monte Carlo simulation, have become part of risk-mitigation planning. These methods allow managers to simulate situations that may occur before a study is actually conducted and allow for quick adjustments to variation in supply operations.
Survey respondents acknowledged the potential benefits of new technologies, but they reported that the barriers to implementing them included cost, both in funding and resources, the difficulty of integrating new and existing systems, and also the lack of standards between systems. One survey respondent noted that top barriers included "the ability to justify new systems and the resources needed to dedicate to implementation," while another cited hurdles of "costs and integration with legacy systems."
Clinical supply professionals also perceived that communication channels within their organizations could be strengthened. They noted that supply chain communication with clinical teams and study investigators was exceptionally weak. Survey respondents felt that communication could be improved with organizational changes such as improving the structure or alignment between functions within their companies, and that some partnering has already taken place.
In addition to internal communication efforts, roundtable participants believed that establishing strategic partnerships could improve sponsor-provider communication. Presently, roundtable group members acknowledged more partnering with their outsourcing providers, including CROs, distributors, and suppliers. Some in the group noted the lengthy process of building trust and fostering a strong working relationship, especially between supply and clinical experts result in better communication between the groups.
According to respondents, the top factors that influence the success of clinical supply chain management were study start-up timelines, location of study sites, number of study subjects, and development timelines. Roundtable Âparticipants indicated that shortened timelines, both in terms of lead times and turnaround time of supplies to global sites; required a flexible approach and readiness to support any last-minute changes.
Survey respondents also indicated that the key factors impacting clinical supply chain strategy were the number of trials being conducted, location of trial sites and regulatory requirements. Growing globalization and the need to comply with increasing global and legal regulations add to the complexity of the supply chain. Roundtable participants reported that regulations in Brazil, France, and the Ukraine are particularly problematic. They noted that standardizing their internal processes to deal with country/regulatory issues could potentially be beneficial to their efficiency. Also, having staff in the field increased knowledge of local regulations of clinical supply imports and exports as well as drug labeling.
Respondents' priorities for the future included forming provider partnerships, reducing operating costs, and investing in technology. Company strategies will include developing partnerships with internal and outside providers as well as promoting collaborative work among providers to maximize efficiency. Additionally, integrating clinical supply Âmanagement outsourcing into clinical operations, particularly when this involves use of multiple CROs, may ultimately drive more integration of clinical supply management outsourcing. As new challenges emerge and the clinical supply professionals' role evolves, companies are continuously exploring new supply chain solutions. At this point, however, these solutions are not yet fully integrated into their supply chain management strategies.
Given that companies are faced with spending constraints, we will most likely see more of the clinical supply chain being outsourced through multiple partnerships with providers as companies seek ways to maximize efficiency. The demand for highly skilled clinical supply professionals will possibly also increase, given the larger number of global trials and the added complexity of trials. While the application of technology will help resolve some of these issues, additional expertise will be required on the user end to manage and implement this technology.
Editor's Note: The authors would like to thank Rachael Zuckerman for her contribution to this article.
Mary Jo Lamberti,* PhD, is Senior Project Manager, e-mail: email@example.com, and Kenneth Getz, MBA, is Senior Research Fellow both at Tufts Center for the Study of Drug Development. Mary Costello, BA, is Global Director, Strategic Marketing at Fisher Clinical Services.
*To whom all correspondence should be addressed.
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