Supply Chain and Technology

¶ … anti-counterfeit technology be used to yield economic benefit to the company and mitigate any negative social impact on society? The Sustainability Challenge Business Case Analysis Emerging Trends, Policy Frameworks, Literature and Strategy Case Studies Critical Analysis Interview Guide Interviews Conducted The organization, Cure Pharmaceutical (Cure), belongs to the pharmaceutical industry's drug delivery technology sector. Cure is considered a small size pharmaceutical company with revenues of one hundred and fifty million. A technique, designed by the firm, enables patients to take medications without water.

This patented Oral Thin Film Technology (OTF) is small, light and occupies much less space after packaging. The technology can be shipped in single dose form or in bulk rolls to the site of patient care. Cure's core business integrates generic drugs that are an effective treatment for a multitude of diseases into its proprietary OTF technology. Cure's main emphasis is to expand its distribution channel into emerging markets particularly in Latin America, India, and Africa for the treatment of Malaria, HIV and other infectious diseases.

These markets are known for the highest incidence in counterfeit drug infiltration (WHO, 2011). Since Cure has a unique delivery system, it distributes OTF both in bulk form and in individual dosing units utilizing authorized and private brokers, the implementation of anti-counterfeit technology becomes a greater challenge. In addition, since some product is cut into dose form from bulk rolls at the site of patient care, simple tracking devices in packaging may not suffice.

Furthermore Cure is a small size company with not much redundancy in its manufacturing process, thus finding a solution to protecting against counterfeit drugs without disrupting in its operations so that it can continue to supply medicines to the needy is crucial. It is also pertinent to adapt a strategy that allows for Cure's mission in keeping medicines affordable for everyone in need. Counterfeit drugs have a tremendous impact on not only business sustainability but social sustainability as well.

When patients do not receive the appropriate medications, it can result in secondary infections, loss of work and increase risk in death. According to the Western Australia Council of Social Services (WACOSS) "Social sustainability occurs when the formal and informal processes; systems; structures; and relationships actively support the capacity of current and future generations to create healthy and livable communities"(AUSPA, 2012).

As Chief Executive Officer (CEO) of Cure Pharmaceutical, I believe that it is the company's responsibility to address these social sustainability issues that potentially impact our stakeholders and the communities we serve. As CEO of Cure, I have been tasked to research how implementing anti-counterfeit technology can protect our products as well as how it may help our overall mission of delivering affordable quality therapeutics for life threatening diseases thereby creating a socially responsible sustainable value chain within our organization.

I will report my findings to the board of directors representing all stakeholders within our organization and later present a proposal to facilitate the appropriate plan of action. The Sustainability Challenge The company has had numerous internal debates on social sustainability and how it relates to protecting our value chain, especially in the fight against counterfeit products in the pharmaceutical sector. The fight against counterfeit medicine is not only a business sustainability issue; it is an inherent social sustainability issue.

Counterfeit medicine not only can cause death and prolonged illness in a patient population, but also can have a severe impact on the economy due to loss of work, increased health cost because of secondary illness and increased morbidity (WHO 2011). Stakeholders can lose faith in medicines and the company's brands that have been counterfeited. As such, the need for more steadfast approaches or initiatives to tackle the issue of counterfeits has led to the need for the development of stringent and effective measures (Robson and Mccartan 2016).

It may seem obvious at first that the company should integrate anti-counterfeit technology to its process, but there are some key challenges for the company such as costs associated with the implementation of the technology and the ability to maintain our social goal of affordable medicines for all. In addition, certain anti-counterfeit technologies require modifications in existing production processes and present operational challenges to the manufacturers.

Some of these operational challenges can cause disruption in the supply chain and create a shortage in some of these essential medicines for the population in need. This can have a grave impact on the overall goal of our social sustainability program and have wide negative implications on the population we serve. Amid some of the concerns about the entry cost associated with the implementation, there are additional concerns about overall effectiveness. The effects of counterfeiting are hard to measure, in both human impact and financial loss.

Unless baseline data are established the effects of an anti-counterfeiting program are therefore often difficult to demonstrate and it is impossible for a company to develop a successful and coherent anti-counterfeiting strategy (Davison, 2010). As we continue to grow in these emerging markets, the threat of counterfeit infiltration of our brand and value-chain increases. For Cure to continue to grow in these markets, the company must use independent brokers and secondary wholesalers often controlled by small private entities with little security and control over their distribution chain.

Since entering the emerging market sector, Cure has seen a five percent increase in counterfeit products infiltrating its distribution channels over the last eighteen-month period. Despite the risk, the emerging markets offer strong growth potential and it is critical to Cure's overall mission of distribution of affordable essential medicines to populations in need. Figure 1 below depicts the future growth in the emerging markets. FIGURE 1.

Future Growth in Emerging Markets Although the company has taken many measures to create a sustainable value chain such as auditing our suppliers, validating material, green packaging, and efficient energy use during manufacturing process, water use reduction and testing all components, we have not yet addressed the issue of counterfeit infiltration into our supply chain. Multiple options exist -- from RFID, coding/printing, holograms, security-labels to track and trace, tamper evidence features and end-use design (Markets & Markets 2016).

As discussed, Cure faces extreme vulnerability in its distribution chain due to the heavy reliance on private or independent brokers and secondary wholesalers to help effectuate distribution into the emerging markets, specifically the rural hospitals and clinics.

In an interview with Wayne Nasby the Chief Operating officer and head of logistics for Cure he pointed out that, "most independent brokers and wholesalers have no way of determining if a product in the distribution chain is counterfeit and in fact some of the brokers are bad actors themselves." Figure 2 below depicts Cure's current distribution component of its value chain utilizing private brokers and secondary wholesalers without any anti-counterfeit technology.

The flow from secondary wholesaler to private brokers is the most vulnerable component for counterfeit infiltration into Cures distribution chain. Figure 2. Cure Pharmaceutical Distribution Arm of Value Chain Business Case Analysis Emerging Trends, Policy Frameworks, Literature and Strategy The challenge of overcoming counterfeiting in the pharmaceutical industry has wider sustainability relevance due to the degree to which counterfeiting impacts all sectors of markets all around the world, undermining the social order, causing consumers to feel insecure in their purchases, loss of work for poor treatment and possibly death (Hamid, Ramish 2014).

Just as Norton Guarantee in conjunction with Symantec technology has become popular for eCommerce firms in recent years (promoting the concept of secure Web transactions), the pharmaceutical industry stands to benefit from addressing the issue of security when it comes to delivering an authentic product to consumers wherever they may be in the world. Firms like Cure must be creative in combating activities that are hard to root out. One way to do that is to implement anti-counterfeit technology in the delivery and distribution process.

Bringing positive change for sustainable development is the key factor here, and anti-counterfeit technology is a variable that can make an enormous difference in the way that firms control their products during the shipping process. It is in the company's, and the client's interest that these protections be implemented as the firm is responsible for not only producing a product that works but also for getting it to the shelves and into consumers' hands untouched and uncontaminated in the exchange (Hamid, Ramish 2014).

It is true that counterfeiters can duplicate measures usually within 12-18 months of implementation, which requires deliverers to implement a rotation strategy; however, the overall assessment of researchers is that this strategy is imperative because without it there is no guarantee that products are arriving as advertised on the box (Bansal, Malla, Gudala, Tiwari 2013). Abel (2010) reports that anti-counterfeiting measures are on the rise in the pharmaceutical industry, which is actively engaged in reducing counterfeit drug cases.

Estimates given by the World Health Organization show that "10% of all pharmaceuticals in the global supply chain today are counterfeit and that sometimes the fake drugs contain toxic substances and chemicals that could cause death" (Abel 2010:1). The risk of not addressing this issue, therefore, is that consumers face a 1 in 10 chance of purchasing a product that is not only not what is declared on the box but that can actually pose a severe health risk to them (Hamid, Ramish 2014). Castka et al.

(2005:vii) report that corporate social responsibility programs allow management within a firm to employ both direct and indirect positive and beneficial impact on "social, environmental and economic" areas where the firms do business efficiently and effectively. The overall goal of these programs is to effect a "better world" where ethical practices serve to guide all aspects of a business's relationship with consumers, the community where it does business, its workers, its culture, and its business objectives (Friedman, Miles 2002:1).

In addressing social sustainability within the firm, Cure should consider what Anyangoooko (2014) identifies as the environmental factors that impact its business model: environmental factors in this case refer to the risk environment in which third party entities are actively engaged in counterfeiting at least 10% of the pharmaceuticals on the market today -- a factor which raises a serious and legitimate threat to the safety and security not only of Cure's business model but also of Cure's clientele.

Sound corporate social responsibility practices are such that the firm puts the interests of the community ahead of interest in profits, thus signaling that its aims are aligned with the health-related goals of the community it seeks to serve.

Without this alignment there can be no fundamental ethical support or foundation for the firm going forward -- no reason for the public to place its trust in the firm's activities -- and no reason for the firm's achievements in technology to not be undermined by a failure in the firm's response to the legitimate threat that is counterfeiting of pharmaceuticals. Sharad (2014) locates the emergence of the problem of counterfeiting in the "expansion of international free trade" combined with "inadequate drug regulation" in markets around the world.

Sharad examines the different ways in which pharmaceuticals can be protected using anti-counterfeiting technology, from overt technologies that employ visible features to covert technologies that use hidden markers to forensic techniques. Each method has its own particular value and helps in its own way to alert brand owners/developers, distributors, marketers and retailers to identify when a seal has been tampered with, or when a product has been counterfeited. Sharad's (2014) assessment supports by Sword's earlier (2010) analysis.

Sword, of Thermo Fisher Scientific, also asserts that anti-counterfeiting technology is a viable solution to combating the problem of counterfeiting pharmaceuticals in today's unregulated markets. Finally, Davison (2011), author of Pharmaceutical Anti-Counterfeiting: Combating the Real Danger from Fake Drugs, asserts that authentication is imperative in reducing the risk faced by counterfeiters within the market place. Authentication is the only means available to assure consumers that the product they receive is the one advertised and intended.

By using authentication measure such as tracking technology, RFID, or other measures available to producers, distribution can be accomplished more safely and effectively and allay consumer fears about being hurt by taking a drug that is something other than what it should be, can be put to rest in a more systemic manner than any other way available. Thus, the research on this subject is clear: anti-counterfeiting technology works, it is effective, and it should be implemented in order to protect both producers and consumers from potentially fatal counterfeit substitutes.

Case Studies The business case studies section of this report looks at two individual firms that have implemented anti-counterfeit technology in recent years. Representatives of these firms were interviewed and data recorded for thematic analysis. What emerges from an examination of these interviews is a common theme that centers on reducing negative social impacts related to counterfeit drug usage. Anti-counterfeit technology, such as Radio Frequency Identifier (RFID) and Thin Layer Technology (TLC), are methods that the firms' representatives believed mitigated the risk of counterfeiting taking place.

The review of the data follows in the Critical Analysis section. Here, an overview of the methods and case studies are provided for contextual purposes. Research Design and Methods Informed by a thorough literature review of the trends and framework of counterfeiting in the pharmaceutical industry, the research aims to explore primary research using two real-world pharmaceutical company case studies through interviews. This research study incorporates a qualitative approach with the acquisition of both primary and secondary data.

It is also acknowledged that research is an iterative rather than linear process; a qualitative method is hence preferred in order to understand and explain how and why things happen, and give in-depth insight into complex phenomena and processes (Silverman, 2010). Case studies provide in-depth information about specific anti-counterfeit technologies and trends, which can then be drawn upon to generate insights. Primary data was collected through semi-structured interviews, discussions and participatory methods.

Semi-structure interviews were chosen as they provide reliable, comparable qualitative data and allow individuals the freedom to express their views and thoughts more openly (Silverman, 2010). Case Study 1: Shire Inc. is a mid size biotechnology company that is focused on serving individuals who are suffering from rare diseases and highly specialized conditions. Shire has expanded into several emerging markets and has recently introduced Radio Frequency Identification (RFID) anti-counterfeit technology into their product.

Interviews were conducted with four key supply chain managers whom have direct knowledge of the implementation of the anti-counterfeit technology and how it affects their company. Case Study 2: BluePharma is a mid size pharmaceutical company that is focused on the development and distribution of generic drugs to the underserved market. Blue Pharma has distributed product into emerging markets for the last seven years.

Bluepharma is not only dedicated to the safety and quality of their pharmaceutical products but also recognizes the importance of social sustainability and their responsibility to implement it. Bluepharma has incorporated an anti-counterfeit technology known as Thin Layer Technology (TLC). TLC is a small minilab that test for active ingredient accuracy and fits in a small suitcase. Interviews were conducted with four individuals including the CEO whom are directly involved in insuring the quality of Bluepharma's supply chain.

Critical Analysis To the question of whether the company had seen economic benefit to the organization and mitigation of negative societal impact through its sustainability approach, both Shire Pharmaceutical and Bluepharma replied, "Yes." The reasons for the affirmation were similar: Shire reported that through RFID implementation, the company had been able to increase distribution by 15% via independent distributors and hospitals; the implication for Cure here is that new markets are aware of contingencies and risks associated with counterfeiting and want to work with companies that are prepared to mitigate these risks: this can open up new doors in terms of exposure to new markets and territories as well as offset the cost of anti-counterfeit implementation, as Shire stated in the interview.

Thus, allowing Cure to both, expand its distribution to individuals in need, as well as increase its sales revenue from the expansion offsetting the cost of anti-counterfeit technology implementation. Shire was able to implement RFID tagging without disruption in their manufacturing process or augmenting process flow by bifurcating manufacturing batches into developed and emerging markets. To begin with, the emerging markets batches were tagged as a beta test, once satisfied with results, tagging was implemented throughout all batch destinations.

During the Beta test period, Shire spent time to educate its stakeholders and end users on how to implement the RFID system. Shire was quick to point out that educating the hospitals, clinics and distribution channels should be a perpetual program. Similarly, It is pertinent for Cure to choose a technology and strategy that allows for gradual implementation as well as beta testing too avoid disruption in their supply chain.

A common theme uncovered in the interview was that RFID tagging does not necessarily stop bad actors from removing real product from the tagged package and replacing it with counterfeits. RFID typically is a tracking label that is placed on the primary or secondary packaging of the product. The take away for Cure from this common theme is that multiple strategies may be needed to further mitigate the threat. BluePharma, in essence.

gave the same response when explaining its affirmation: it was able to ensure new markets (hospitals, clinics and pharmacies) that the products they were receiving from the company were legitimate and had been tracked entirely from shipping point A to receiving point B; this serves as a kind of Norton Guarantee in the pharmaceutical world and opens up the company to doing new business with clients that want to be assured of protection of products that they will in turn be using or selling.

Bluepharma did express that they had difficulties in the logistics and the ability to educate and train the hospitals, clinics and pharmacies to operate Thin Layer Technology. The CEO said, "there was a learning curve involved and we experienced some hiccups in the process." Thin Layer Technology is a portable lab that test for accuracy in the active product ingredients; trained individuals must conduct testing by following specific protocols.

Once Bluepharma designed a better operating training program and online tutorial training programs, they were able to create a more seamless approach. Cure's take-away from this is the importance of education and training program prior to choosing a strategy. Bluepharma chose TLC because it is implemented at the end-point of the distribution process with little or no interruption in manufacturing process. Both companies also affirmed that mitigation of counterfeiting results in social benefits. Shire explained that anti-counterfeiting technology helps to build brand trust with distributors and clients.

Bluepharma expressed the same sense -- that the technology enabled the company to build trust with clients. Likewise, both companies agreed that using this technology enables them to maintain a sustainable value chain and protect the health of the end user/patient. Shire explained that the implementation of RFID tracking had resulted in a 14% reduction of counterfeiting in the firm's supply chain along with a decrease in pharmaceutical theft.

This reduction thus boosted the overall sustainable value chain in terms of ensuring that the most effective product is reaching its intended designation. Bluepharma indicated that its own exposure to counterfeiting had been reduced by nearly half -- 45% over the past 2 years. Both companies similarly agreed that the value chain and their company's integrity were supported by anti-counterfeiting technology, with the results being extremely important, positive, and valuable to their respective firms.

Comment by GL:? confusion over meaning In the final analysis of these two companies, the use of anti-counterfeiting technology posits as a strong indicator of a solid corporate social responsibility program deployed with effective and efficient results in terms of value chain management, brand loyalty building, and securing community trust. The conclusion reached here is that in order for Cure to.