3 Uncomfortable Ways Personalized Medicine Affects the Supply Chain

The emergence of a new healthcare consumer

Making the scene are newly empowered healthcare consumers, who demand a better quality of personalized care, lower cost, greater transparency, and don’t mind playing a role in managing the overall value of their care. This consumer is creating a new paradigm in contemporary healthcare supply chain as we not only “fill the hands that heal”, but we are filling the hands the hands of those yearning for healing. Not only do we have a new healthcare consumer, but we also have a new supply chain professional playing a more direct role in caregiving.

Roles are also changing online, with telemedicine, and physical brick and mortar clinics and primary care practices.  Personalized medicine is an evolution, and while the transformation takes place there exists a ‘mash-up’ of logistics to manage. One example of this effect is how clinics and primary care locations are finding it hard to refer patients to DME centers since a great number of them have closed their storefronts in favor of direct-to-patient online services. Inventories of light DME products have to be increased while other logistics-based services pick up the treatment plan from there to ship products directly to the consumer.

What we see evolving from a supply chain and logistics perspective, might be thought of as extreme decentralization, as we pursue the benefits of personalized healthcare. The decisive distribution of medical treatment products is demanding that drugs and supplies arrive whenever and wherever they are needed for individual patients. More products – more service – to more people – at more locations.

Answering the call

How do the life sciences and healthcare supply chain tool up for personalized healthcare/medicine? Start by getting comfortable with three REALLY UNCOMFORTABLE areas for most healthcare supply chain leaders.

DISCOMFORT #1: DIRECT TO PATIENT

Think Cologuard from Madison Wisconsin. The service is ordered and coded by the provider, sent to the patient’s home, the test is screened at a central lab, and results are returned to the provider. It is worth noting that their last-mile logistics and reverse supply chain needs are served by United Parcel Service.

DISCOMFORT #2: COLD CHAIN AND TRACEABILITY

An old concept, but undoubtedly one that may not be as familiar in healthcare supply chain logistics, cold chain – or cool chain are simply unbroken logistic hand-offs of temperature controlled products. Logistics are handled by employing temperature-monitored transport services or in temperature-engineered containers.

You may be thinking that cold chain just ain’t that important – it certainly isn’t knocking loudly on your strategic door. Nor is it on the minds of your patients… Think Again! According to The Walker Sands Future of Retail 2016 Study, 79% of consumers say that they would be very – or somewhat likely to request delivery by drone if it meant that they would get the products they need in the most pristine condition. AND Amazon is applying for whole pharmacy licenses in nearly every market and can act as a wholesale pharmaceutical distributor in 12 US states – so far. All while the pharma industry is still struggling to find a good foothold in traceability, and healthcare delivery network supply chain lags behind in adopting even the most parochial GS1 standards. We desperately need to catch up to the trends of cold chain and traceability. While we have been busy ignoring GS1, there has already been a crypto-digitalization movement playing a world-class game of leapfrog… Blockchain.

DISCOMFORT #3: BLOCKCHAIN

The blockchain is likely another concept that has not been our cup of tea in healthcare and life sciences supply chain. With the emergence of cryptocurrency there was a need for a distributed ledger for security reasons and to disintermediate banks from the currency exchange process. Today blockchain technologies are solving healthcare supply chain problems from cold chain verification to chain of custody regulatory demands. The new generation of blockchain tech is becoming the norm for connecting new provider-to-consumer relationships in an “Internet of Value” (as coined by the Blockchain Research Institute – www.blockchainresearchinstitute.org). Next generation cryptographic techniques and decentralized networks will build upon these trusted relationships to include providers, suppliers, partners, manufacturers, and patients. Also, the “Internet of Value” will digitally meet “Chained Finance” to manage payments and solve a number of integration issues that will skip past the current reliance on many of our foundational logistics and contracting players. How does this affect us?

• No sales reps.
• No accounts payable.
• No accounts receivable.
• No check runs – no AFT – no P Card processing (maybe no bank – that is where blockchain cut its teeth after all).

Am I cutting close enough yet? How about…

• No group purchasing organizations.
• No warehousing – 3PL.
• No med/surg or pharma distributor.
• Pricing based on live utilization data – NO CONTRACT

All of the above are overhead and value drainers that drive the cost of medical products and pharmaceuticals up while terminally fogging consumer-demanded healthcare finance transparency.

Colleagues – blockchain is here… We may as well make our peace with crypto supply chain now, and embrace it as a part of our advanced supply chain strategy. (Shameless plug: this road to the future takes right through global data standards… ‘Gotta make a stop there as well.)

These disruptive areas serve to underscore the importance of ever our increasing focus on efficiency in logistics systems that are already facing extreme financial pressures. We simply need to get our collective heads in the game. This is a great and high calling for any supply chain technocrat– to fill the hands that heal – or better yet –  fill the yearning hands WITH healing.

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