Why wholesalers need to run a tight ship

1 February 2012

With the growing threat of falsified drugs, especially online, stricter supervision is needed across the pharmaceutical industry. Katrin Nodop of the European Medicines Agency talks to Rod James about the way distribution practices have evolved over time and the importance of new regulatory guidelines.

The European Medicines Agency (EMA) last revised its guidance on good distribution practice (GDP) back in 1994. In the ensuing 18 years, a lot has changed. Technical advances in storage and distribution, new EU regulations, and the growing speed and coverage of the internet have opened up new opportunities. But they have also exposed areas of supply chain weakness.

These vulnerabilities have been exacerbated by changing business models. Companies today are increasingly specialist and have to keep track of a huge number of outsourced contracts for operations considered 'non-core'. At the same time, the growing profitability of lifestyle drugs such as Viagra has attracted the attention of criminal elements tired of diminishing returns and harsher punishments on the illicit market.

Nearly two decades on from the first round of amendments, the EMA has decided to act. Towards the end of 2011, it published a draft of the revised guidelines on GDP for medicinal products to come into force some time this year. According to Dr Katrin Nodop, leader of the team charged with drafting the new guidelines, some worrying holes were starting to form.

Gaps in legislation

"The whole emphasis is on securing the legal supply chain, from the manufacturer through to the wholesaler and then to the patient," she says. "So much has changed over the past two decades that we've begun to notice gaps in legislation, particularly with regard to exporting medicines. Some exported medicines were actually re-entering the European market when they shouldn't. We also had a number of players - for example, brokers - whose dealings were not properly supervised. Most were very good, but there was the occasional black sheep."

"In the past, there was no requirement to check whether the people you were buying from were genuine. There soon will be."

Nodop has been a fixture in the EMA's compliance and inspections arm for 15 years, so has a clear understanding of how the industry has evolved. In her view, the most significant amendments in the current batch are those to do with supervision. Brokers, responsible for bringing wholesalers together to help them negotiate a good price, are now obliged to check that any party they deal with is registered. The wholesalers, in turn, are required to notify the authorities if they receive any pharmaceutical packages that they suspect of being fraudulent.

"In the past, a wholesaler might have received a number of medicines at a very good price, but probably too good a price," Nodop explains. "A good wholesaler, suspecting that the product might be false, would refuse to buy it. A bad wholesaler might just have bought it and sold it on. Now they are obliged to tell the authorities. Also, wholesalers now have to document the way in which they operate - guidance, protocols and the responsibilities of staff. The management has to monitor this system, and all key players must be knowledgeable and keep their qualifications up to date."

Wholesalers also have to more closely scrutinise the parties they deal with. In the past, there was no requirement to check whether the people you were buying from or selling to were genuine. There soon will be - and it will be strictly enforced.

"To make this as painless as possible, the legislators have released this information into the public space," Nodop says. "The EMA will host a database containing all the authorisations and GDP certificates. It's not enough, though, just to check the database. It is expected that you carry out audits, particularly as storage is generally outsourced, and you need to ensure that the warehouse is compliant in terms of temperature monitoring, safety and security. You have to have real knowledge of the people you are dealing with."

Growing threat of falsified drugs

The main reason for tighter supervision is the growing threat of falsified drugs. While still a much bigger problem in the developing world, the increased popularity of lifestyle drugs and the coming to market of very valuable biotech products has made Europe a fruitful target market. At the heart of this lies broadened public access to the internet.

"The number of unlicensed online pharmacies has risen considerably. The majority of medicines they sell are falsified."

"The number of unlicensed online pharmacies has risen considerably," Nodop explains. "And the people who run these are very clever. They have a good logo and a picture of a nice man that looks like a doctor you can have confidence in. None of them are real and the majority of medicines they sell are falsified. The difficulty is that any mail order package of below 2kg is very difficult to capture."

In Nodop's view, the continuing popularity of illegal online pharmacies is partly down to the consumer not knowing and in some cases not caring. A number of measures have been introduced to try and dry out the market. "This ranges from collecting much more information about these websites, to awareness campaigns and taking these sites down completely, although this can be difficult when they are rerouted through so many ISP providers in countries that are hard to get to," she says, "The new legislation will also provide a white list of pharmacies that a patient can be sure are authorised to help make buying medicines safer. This is all part of one big package. It has and will change the requirements of GDP."

Keep the warehouse in order

Increasingly sophisticated computer technology has also had an impact in other areas. Europe's warehouses, particularly the 600 or so with public service obligations, are now almost entirely computerised, with forklift trucks being directed to the right packet or pallet from a central control system. Although more efficient, computer operations need to be carefully monitored.

"In the new guidance there is a section on what is expected of these new systems," Nodop explains. "A computer can check what is available, take it off the shelf, send it to the customer and check it out once it's been sold. Mix-ups in the warehouse are now much less likely to happen, but you still need to ensure that the products that go in first are the first out and that you are not selling products that have expired or are defective."

Consequently, a stringent system of record-keeping has been put in place. Wholesalers will have to know the history of their products and the precise location within the warehouse in which they are stored.

"You have to know for sure where you got something from and to whom you have sold it," Nodop explains. "This comes into play if you have a defect and the product has to be taken off the market. As this normally happens before the product reaches the patient, all wholesalers need to know if they have handled it and where it is stored. Information regarding strength, batch number... this has all been made more robust through the new legislation."

New distribution guidelines

The current guidelines have been shaped by numerous stages of revision involving many regulators and industry figures. A series of regulatory meetings results in the drafting of a concept paper, in which the reasons for a change to a guideline are laid out. Once an internal agreement has been reached, the proposal is put into the public domain.

"Wholesalers will have to know the history of their products and the precise location within the warehouse in which they are stored."

"The document went for review in July for a period of six months," adds Nodop. "The Commission tried to limit this period to three months, but because the document underwent quite considerable change, we thought six would be more appropriate. Altogether we have received 80 contributions from industry. Assessing this is a lot of work, a little more than we were anticipating."

Further changes are likely in around three years' time. Prescription medicines considered to be easily falsified will soon be given a unique identifier. At the moment, it is unknown what this identifier will look like and how often it will be checked, but when introduced it is sure to have a significant impact on distribution practice. Other than that, Nodop is pretty happy with the progress made.

"We have worked with a number of experts to develop these guidelines, we've kept it lean and have consulted existing distribution guidelines from the WHO and other partners," she says. "Guidance isn't explicitly written - it's just a description of how to do things. But we are confident this will last for quite some time."

Katrin Nodop joined the compliance and inspection sector at the European Medicines Agency in 1997. She is currently focused on coordinating the implementation of the new European legislation on falsified medicines within the agency and with EU member states.

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