Rx REPORT

Pharmaceutical Supply Chain Security Risk Assessment for Shipping Lanes

With the publication of the European Good Distribution Practices (GDP) guideline, to better protect the pharmaceutical supply chain – referencing EMA Guidelines in 2013 – all actors in the pharmaceutical supply chain are obliged to perform a full review of all associated Quality Systems to determine current compliance status, as well as address gaps, thus ensuring compliance in accordance with the guideline.

GDP compliance ensures that the quality of medicinal products is maintained throughout all stages of the supply chain, from the site of the manufacturer to the pharmacy or person authorized or entitled to supply medicinal products directly to the end user, the patient. Its purpose:

  • To safeguard product quality and integrity to avoid patient safety impact;
  • As well as prevent unnecessary product loss or scrap to ensure availability of medicinal products to patients;

Within the referenced EU GDP guideline, supply chain security requirements are described with a significant level of importance. However, to date, pharmaceutical industry standards for preventive supply chain in-transit security measures have yet to be universally defined and accepted.

Introduction

Cargo theft is a significant concern in the pharmaceutical supply chain as unnecessary product loss may result in (restricted) unavailability of medicinal products to patients. To safeguard product quality, efficacy, safety and security of all pharmaceutical goods to the patient, Supply Chain Security Risk Assessments towards in-transit activities are essential. In this article, we outline a comprehensive ‘Shipping Lane Security Risk Assessment Model’ and important ‘Shipping Lane Security Risk Assessment Criteria’. This is followed by listing preventive measures in order to increase the level of security. It supports global harmonization for in-transit supply chain security requirements, as well as to offer risk assessment guidance with focus on road transportation security.

Regulations

Transporting pharmaceutical products and production materials, throughout the manufacturing, packaging, warehousing, and distribution processes is recognized as an integral part of the Supply Chain. This includes the movement of materials at all the various stages of a product’s life cycle: acquisition of ingredients, manufacturing the product, packaging the product, storage and distribution of the product, as well as recovery of unused or recalled product for destruction, and would encompass all the transit and storage occurring in-between these events.

The transportation processes must be in compliance with all applicable regulatory requirements and be performed in a manner that ensures the safety, identity, strength, purity, and quality of the products are maintained during the transit activities. Additionally, those activities must include appropriate security measures to minimize the potential for theft, diversion, loss, tampering, etc.

Pharmaceutical manufacturers have a responsibility to ensure product quality safety and efficacy in accordance with GMP/GDP regulations. For larger pharmaceutical manufacturers, their Quality Management System (QMS) have a global reach to ensure compliance with Good Distribution Practices, based on local market needs. The EU GDP guideline1 can be used as a solid basis for this QMS. However, with increasing focus on supply chain security requirements during transportation, dovetailed with increasingly complex supply chains, it is important to assess and document the transportation risk2 within the supply chain.

Cargo Theft

The trading and the use of falsified (counterfeited) medicinal products, which can be potentially toxic or simply ineffective, is one of the major threats to global health and safety, involving both developing countries as well as industrialized ones.

Cargo theft is one of the critical risks pharmaceutical manufactures and their associated supply chains must face, since it could lead to unlawful product diversion, adulteration and counterfeiting, which could have a direct impact on patient safety as well as damage the brand and company reputation. These types of incidents can also have a significant

financial impact – from product loss resulting in potential revenue loss. Several studies have recently been conducted on pharmaceutical product losses due to theft, in an attempt to identify the total cost of such a loss. One such study published by the University of Texas’ College of Pharmacy3surveyed a broad group of professionals in the pharmaceutical space and placed this cost at between three and five times the product value when indirect and potential recall costs are factored in.

Rx-360’s Supply Chain Security Working Group has also looked at the total cost of loss seeking to justify a positive return on investment to offset program costs. As part of that work they have created a worksheet that can be used as a tool to help determine this cost.4

Recent statistical analysis has shown that, due to significant improvements in facility security, the vast majority of thefts of pharmaceutical products occur when shipments are in-transit. A number of captured cargo cargo thieves have been in the past, apprehended either during or after a pharmaceutical in-transit theft. Those individuals have indicated the profits from selling stolen pharmaceutical goods is highly attractive to sophisticated criminals.

According to Sensitech Inc. and its risk-management services group, SensiGuard,5 approximately 75% of all cargo thefts in EMEA are related to freight transported by road. The market value of all types of goods stolen from road transport in the European Union (EU) was approximately €11.6 billion in 2013. Of that 11.6 billion at least 1% was believed to have involved pharmaceutical products. That being said, one must also keep in mind that the reporting of pharmaceutical thefts, by those victimized, is notoriously underreported.6

According to Transported Asset Protection Association (TAPA), a nonprofit organization, and their recently published TAPA EMEA Incident Information Service (IIS) data7 for the first six months of 2017 the statistics generated reinforce the need for more secure parking for vehicles transporting high risk/high value commodities, such as pharmaceuticals. Of the 950 cargo crimes reported for the period from 1 January – 30 June 2017, 694 or 73% of theft incidents occurred in unsecured parking places, at a rate of 4.5 a day. Latest intelligence7 shows 75% of all newly-recorded incidents took place in such parking locations.

Over 93% of cargo thefts involved trucks in May-June 2017

A total of 160 cargo crimes in May and 188 in June were reported to TAPA EMEA. The number of these crimes reinforces the need to improve security for trucks and drivers. The top five incidents are all vehiclerelated: (1) Theft from Vehicle, 77% (2) Theft of Vehicle, 5%, (3) Hijacking, 4%, (4) Theft from Trailer, 4% and (5) Theft of Trailer, 3%. In comparison, there were only three cases reported in May involving Theft from Facility.

Particularly alarming is that these cargo crimes seem to be on the rise. The SensiGuard Supply Chain Intelligence Center (SCIC) recorded a total of 2,240 incidents in 20168 which entailed an increase of 270 additional incidents in Europe, the Middle East, and Africa (EMEA) region as compared to 2015. Of those thefts, approximately 75% took place in areas with unsecured truck parking. This particular statistic indicates that a critical aspect of securing one’s supply chain should include performing a thorough risk assessment of all shipment lanes – particularly ones long enough require stops in-between destinations.

Also of note, in the analysis of SensiGuard data, was that several pharmaceutical cargo thefts involved “hijacking” activity. There were approximately 99 hijacking incidents in 2016, according to the SensiGuard SCIC, most of which occurred while in-transit. One location where these types incidents are also regularly being seem to be rising is in the country of South Africa.

In Brazil, there were about 22,550 cargo thefts in 2016 (according to Rio de Janeiro State Industries Federation), an increase of 22% as compared to 2015. The States of São Paulo and Rio de Janeiro were responsible for 87% of cargo thefts of the country.

Underreporting continues to be an acute problem in Mexico, however, reported thefts increased 62%. The states of Guanajuato, Queretaro, Estado de Mexico, Puebla and Veracruz represented 60% of all recorded thefts.

For the year 2016, the SensiGuard SCIC recorded 857 cargo thefts throughout the United States and Canada. Although the total number of incidents rose only marginally, the threat of cargo theft continues to grow in the United States due to increased organization and innovation on the part of cargo thieves as they broaden their geographical areas of operation and improve their methods to avoid detection and capture.

Underreporting

Elsewhere in Europe, the true picture of thefts from supply chains is far less clear as TAPA continues to seek reliable and regular sources of intelligence. The number of recorded crimes in the other countries, therefore, should not be seen to imply they are any more, or less, secure for high value, targeted goods in-transit.

The high risk areas in Europe more or less are assumed to be equal to the heatmap (see Figure 1) showing Europe’s most desirable logistics locations. This is aligned with the basic principle of supply chain security: cargo at rest = cargo at risk.

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