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Can compliance in pharmaceutical logistics by air be reached through industry collaboration?

Can compliance in pharmaceutical logistics by air be reached through industry collaboration?

Pharmaceuticals makeup 1.9% of all air cargo and generate revenues of $1.4 billion per year – 2.6% of total air cargo. In the next three years (2018-2020), growth in pharmaceuticals being transported by air is expected to increase 3.7%. Despite lower than overall air cargo volume growth, the higher yield premiums of pharmaceutical shipments mean that they will still contribute to generating an increasing share of air cargo revenues.

The transport of temperature controlled pharmaceutical products requires a lot of attention and the air cargo industry is facing multiple challenges. For goods originating from the healthcare sector, the associated risks generate costs for the industry stakeholders. Shippers of specialized drugs, vaccines and emergency aid rely on air cargo to get their products where they are needed quickly while maintaining the products integrity and quality. The air cargo supply chain stakeholders are urged to adopt and embrace quality measures and industry standards as demand for more predictable logistics supply chains continues to grow due to increasing complexity of treatments and pharmaceutical products and a greater focus on patient safety.

Background

The International Air Transport Association (IATA) is the industry’s global trade association and represents some 290 airlines comprising 82% of global air traffic. Its mission is to represent, lead and serve the air transport industry and its responsibility is to develop and deliver standards and solutions to ensure safe and harmonized air transport. In Cargo, IATA has a long standing tradition of working closely with industry in all its initiatives to address their needs and ensure regulatory compliance and quality services. The aim is to benefit all parties (airlines, forwarders, governments, handlers and shippers).

To address the challenges in transporting and handling pharmaceuticals and healthcare products, IATA adopted a supply chain approach and set up a dedicated working group, the IATA Time and Temperature Task Force (TTTF) now renamed as the IATA Time and Temperature Working Group (TTWG) composed of industry supply chain subject matter experts. The TTWG recommends standards, best practices and requirements in the pharmaceutical/healthcare areas that are endorsed by the IATA Live Animals and Perishables Board (LAPB), a governance body comprised of 12 airline members. The healthcare standards are then included into the Temperature Control Regulations (TCR), to become industry standards. These Regulations are not only binding to IATA airline members but they mandated requirements down the supply chain all the way to the shipper.

The standards that have been developed, such as the Time and Temperature Sensitive Label for Healthcare Products and the Acceptance Checklist for Time and Temperature Sensitive Healthcare Shipments, have been disseminated to the industry but are still not widely complied with. As such the need to continue raising awareness is essential among all stakeholders across the supply chain to ensure compliance with the Regulations.

Compliance

Customers are demanding that adequate facilities, equipment, handling procedures and trained staff are in place to ensure the temperature range is maintained to protect the integrity and quality of their products throughout the journey. Because of the sensitivity nature of the products being shipped, the procedures, practices and requirements of the healthcare industry must be understood and applied by all those involved in the supply chain.

Understanding the challenging business environment many airlines, freight forwarders and ground handlers have invested heavily in temperature controlled supply chain solutions. Until recently however, there was no global standardized certification for the handling of pharmaceutical products. To recognize the effort made by the industry to address the pharmaceutical manufacturers’ needs and to help foster air cargo’s competitiveness in this growing industry, IATA developed with the industry the Centre of Excellence for Independent Validators in Pharmaceutical Logistics (CEV Pharma).

CEIV pharma is a globally consistent, recognized and standardized certification for pharma shipments in air freight. It ensures that the right processes, people and infrastructure are in place to handle and transport of sensitive shipments in compliance with existing international and national regulatory requirements. CEIV pharma was introduced as an example of air cargo’s commitment to certify the high quality transportation of critical commodities and to address the concerns identified in the supply chain, especially those of pharmaceutical shippers.

The pharmaceutical industry is heavily regulated and today there is an increasing number of countries issuing their own regulations and guidance around the world to implement and comply with. There are different levels of compliance in the industry depending on the scope of the operation and required regulatory requirements. There is the Wholesale Distribution Authorization (WDA), the Commercial Certificate and CEIV Pharma Certification. Each stakeholder involved in the transport or handling of pharmaceuticals has to implement the regulatory requirements (e.g. internal quality management system, qualified personnel, well designed processes and equipped premises using a risk based approach) but it all depends on the level of recognition desired or required as well as on the activity of the company (e.g. national, international or global) as to which certification is most suited to their needs.

Nevertheless, compliance, standardization, accountability and transparency across the supply chain is needed. This is why IATA developed CEIV Pharma – as a standardized global certification program training and assessing organizations against standards and regulations that encompasses various regulations and standards (including e.g. IATA TCR, National GDPs, WHO).

CEIV Pharma is one way to address industry’s concern but what is more important to emphasize is that it was developed by the industry for the industry with a greater focus on the operational aspect of the companies’ activities.

In addition, supply chain excellence is achieved as a result of applying procedures that are effective, efficient and meet the needs of customers. Training is paramount to effective implementation. The training of staff handling sensitive cargo is crucial to ensure that the integrity of the temperature controlled supply chain is maintained, therefore training for stakeholders involved in the transport by air of temperature controlled healthcare products is a prerequisite of the IATA Temperature Control Regulations. It is essential that each member of the supply chain understands what the specific requirements for compliance are, as well as those of others in the supply chain. This allows for a greater understanding of the entire supply chain process and smoother process integration.

Next steps

The feedback received from the industry is positive. Such a certification is conducted on a voluntary basis, therefore IATA will continue to respond to the industry’s demand to become CEIV certified. There has been a growing expectation to see standardization and transparency across the supply chain. As a result CEIV Pharma is expanding globally.

Stakeholders across the supply chain are now embarking on the program. They recognize the added value and benefit brought forward by the certified entities such as being given the means and tools to enhance their quality services and being recognized as meeting the regulatory requirements as well as the standards in term of operations, adequate facilities and trained staff. Today there are more than 200 entities that are certified and more than 70 that are in the progress of certification.

Continuous improvement is also key in such a quality driven strategy therefore, IATA will ensure with the supply chain stakeholders that the program is always up-to-date in terms of standards and regulatory requirements. In addition, IATA will follow and work closely the different industry initiatives such as Pharma.aero that involves CEIV certified entities to seek industry feedback and best practices. The best recognition of the effectiveness of a standard is when it is adopted by the industry. In the framework of continuous improvement aimed at having global certified trade lanes, CEIV Pharma has taken the industry and moved it to another level. Pharma.aero for example is a good example that focuses on improving pharma handling and quality in the air cargo industry worldwide focusing on pharmaceutical shippers and all industry stakeholders who embrace the IATA CEIV program.

Policy implications

The industry has seen that less costly sensor technology for monitoring cargo shipments has created new possibilities in improving information flow across the supply chain. This offers an opportunity for improving the quality of the air cargo product and by doing so creating new growth prospects. Industry and technology providers are encouraged to work collaboratively on certification processes and data usage.

However, risks to growth prospects exist, particularly if seamless flows of high-value pharmaceuticals across borders are impeded, for example, if Brexit arrangements are restrictive. UK and EU governments are encouraged to ensure effective agreements remain in place post Brexit to facilitate this critical health supply chain continuing.

Finally regulations and standards, such as EU GDP and IATA CEIV Pharma, have served to shore up confidence among shippers to rely on air cargo. However, further harmonized efforts are needed to diagnose and bridge gaps in capabilities across the logistics supply chain given increasingly specialized shipper needs. Governments and shippers are encouraged to enhance dialogue with operators to ensure continual improvements in air cargo processes align with regulatory and shipper demands.

*(The temperature indicated on the lower half of the label must match the approved transportation temperature range, e.g. +15ºC to +25ºC) +15ºC to +25ºC *

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