Logistics Warehousing in the Pharmaceutical Supply Chain

When it comes to the pharmaceutical supply chain, safety is the name of the game. And perhaps no element of the supply chain is more integral to the safety of pharmaceutical products than the warehouse. In this article, we’ll look at the ins and outs of pharmaceutical warehousing and tell you what you should look for in a third-party logistics (3PL) provider before entrusting your goods to its warehouse.

About Pharmaceutical Warehousing

Pharmaceuticals are stringently regulated by the Food and Drug Administration (FDA) and the Drug Enforcement Administration (DEA). The FDA’s regulatory standards for the industry are referred to as Current Good Manufacturing Practice (CGMPs; also known as “Good Manufacturing Practice” [GMP]) standards. These standards apply to pharmaceutical warehouses, processes, and to the drugs themselves.

CGMPs related to warehousing include:

• Drugs must be stored to prevent contamination and be positioned to allow for inspection and cleaning of the area.
• Each lot of drug products must be identified with a distinctive (and traceable) code, and the lot’s status must be identified (approved, quarantined, rejected).
• Written procedures must describe the distribution process for each drug. This includes procedures for recalls.
• Written procedures must describe the appropriate storage conditions for each drug.

Temperature and climate-controlled warehousing

A major pharmaceutical warehousing challenge involves these “appropriate storage conditions.” Different drugs can have vastly different requirements in terms of temperature, humidity, and lighting. The warehousing provider must ensure that the storage of each drug is in line with its specific requirements as defined by the manufacturer. This can involve temperature-controlled warehousing and/or climate-controlled warehousing space – both of which require state-of-the-art control and monitoring equipment to keep the space within specific environmental parameters.

• Temperature-controlled storage. A warehouse that has temperature-controlled space utilizes cooling (and/or heating) units to keep the temperature within a set range. These units are strategically placed to ensure that the area stays in range.  A variety of factors will affect the quantity and placement of cooling units, including the season of the year (i.e., more units may be needed during the summer), ceiling height, density of insulation, and warehouse building materials.
• Climate-controlled storage. While many people use this term interchangeably with temperature-controlled storage, there are key differences between the two. With climate-controlled storage, the humidity of the space is regulated in addition to temperature. Commercial humidifiers/de-humidifiers are used along with other equipment to ensure that humidity stays within required ranges for products.
• Temperature mapping. This process utilizes sensors to measure temperature in different areas of the warehouse. Most 3PLs will go through a temperature mapping process several times a year and adjust cooling or heating equipment based on the results. For example, if mapping shows that an area is too warm, the placement of cooling equipment will be adjusted.
• Temperature monitoring. While temperature mapping is a proactive method of ensuring optimal temperature coverage, temperature monitoring is the day-to-day observation and management of those temperatures. 3PLs like Kanban partner with external monitoring companies to track temperatures in real time and alert key personnel of any significant changes immediately.

Lot Control

Items that have common characteristics important to the manufacturer (e.g., the same expiration date) are given a lot number by the manufacturer and/or by a 3PL’s warehouse management system (WMS) as they are received by the warehouse. This lot number allows 3PLs to quickly identify batches of items in the event of a recall. It also enables the 3PL to perform inventory management protocols like FIFO (first in first out; the oldest lots of items will be distributed first) and FEFO (first expired first out; the products closest to their expiration dates will be distributed first).

Preventing Cross Contact

Pharmaceutical products are sensitive items that don’t always play nice with other products. The efficacy of some pharmaceuticals can be severely impacted if exposed to other products. The prevention of cross contact (i.e., exposure of one product to another) is therefore paramount at pharmaceutical storage facilities such as 3PL warehouses.

Cross-contact-prevention measures include:

• Separation of materials. Products in the pharmaceutical warehouse must be separated – and kept separate – from each other. This includes movement of products through unauthorized areas. For example, at Kanban’s warehouses, certain products can only be unloaded, stored, or transported within a designated section of the warehouse by authorized personnel.
• Education of associates. Warehouse staff must be adequately trained to recognize potential allergens at the facility, the opportunities for cross contact, and the facility’s policies and procedures.
• Designation of facility sections. Areas of the warehouse containing sensitive items must be clearly identified; unapproved equipment and unauthorized personnel must be prevented from entering.
• Sanitation efforts. Associates must wash hands with soap and water after handling any pharma product.  Appropriate clothing must be worn and changed or cleaned as needed. Equipment and storage areas must be maintained and cleaned in accordance with facility and/or regulatory requirements.
• Designation of supplies. Supplies such as stretch-wrap and pallets can be designated for a specific product type and their use will be solely limited to that product type.
• Quarantine of rejected items. Rejected pharmaceutical items must be appropriately identified and quarantined in order to prevent their use. Similarly, incomplete or incorrect packaging for any item should result in removal of that product from the product pool until it can be repackaged or discarded.

Recalls and Mock Recalls

Common recall occurrences involve products that are damaged or at-or-near expiration, recalled for safety concerns, or otherwise designated for removal from circulation by the manufacturer.  As all products are scanned upon initial entry into the warehouse, the 3PL should be able to quickly identify the item’s location and segregate the items in question using its WMS. The items are placed on hold pending further instructions. Typically, the customer will either pick up the items to have them destroyed, or the 3PL will be instructed to destroy them and provide documentation of the destruction to the customer.

Before you find out whether your 3PL can handle a real recall, you should find out if it can handle fake ones. “Mock recalls” are an important part of food and pharmaceutical warehouse management provided by your 3PL. These mock recalls are “practice runs” for real recall events. Importantly, they should be orchestrated just as carefully and extensively as the real thing.

A mock recall typically proceeds as follows.

1. The customer and 3PL coordinate details of the event, including the product being ‘recalled’ and key related information (e.g., lot numbers).
2. Items are flagged by the warehouse management system (WMS) which assigns the products a segregated hold location and prevents them from being distributed.  In the event the recalled product was shipped, the WMS can determine which lots were shipped and to where.
3. Warehouse personnel are notified and associates each follow specific protocols.
4. ‘Recalled’ items are taken from the main warehouse floor and placed in the segregated hold location.
5. The WMS is updated as the products enter the hold location and all warehouse staff is notified of the location, and appropriate signage is displayed.
6. The customer is updated and the 3PL provider awaits further direction (e.g., whether to hold, arrange destruction of items, etc.).

When a “real” recall is instituted, the process…well, the process is the same as it is during a mock recall. When systems and staff have been through effective practice runs, the real thing should run like a well-oiled machine.

5 things to look for in pharmaceutical supply chain 3PL

When you begin your search for a 3PL to handle key pharmaceutical supply chain responsibilities such as warehousing, the following five questions are a great place to start.

Can the 3PL segregate products appropriately? Many pharmaceutical products have specific segregation requirements. For instance, a product’s appropriate storage conditions may dictate that it needs to be stored away from foods, other pharma products, and even items that emit strong odors (e.g., tires or coffee). Your 3PL should demonstrate the ability to meet these requirements.  Importantly, it is not enough to simply segregate products – your 3PL must commit to taking additional steps to avoid cross contact as described above.

Can the 3PL warehouse meet your product’s climate needs? A pharmaceutical product’s appropriate storage conditions may require that it be kept within a specific temperature and/or humidity range at all times. You will need to make sure that your chosen 3PL can adhere to these requirements – and that it has safeguards in place should temperature or humidity fall out of range.

Can you audit your 3PL provider? Just about every 3PL that stores pharmaceutical products will welcome regular audits by the products’ owners – announced or unannounced. Such audits can include a review of storage conditions, product placement, potential hazards, facility cleanliness, records and training protocols, and other factors.

The FDA may also periodically audit warehouses that store pharmaceutical products. The best 3PLs operate in a constant state of ‘audit-readiness’ and are always prepared for an impromptu visit by the FDA or any other auditing agency.

Can your 3PL flex space? In the wake of COVID-19 and resultant supply chain disruptions, many companies have begun to rethink their inventory management strategies. For some, this may involve having more product on-hand at pharmaceutical distribution centers. If you anticipate fluctuations in your inventory volumes – whether up or down – you will want to make sure that your 3PL has the space and resources to accommodate this flexibility.  Your costs will also flex up and down to match your space and service requirements.

Is your 3PL ISO-certified? When it comes to managing elements of the pharmaceutical supply chain, it’s critical that your 3PL has a stringent set of protocols to follow. It doesn’t get much more buttoned up than being ISO-9001-certified. ISO-certified companies have conformed their procedures to rigorous international standards to ensure quality and consistency.

For example, there are a variety of exacting ISO-9001 standards related to product recalls, including standards to identify and control “nonconforming outputs” (products that are damaged, expired, or otherwise fall short of requirements). In order to become ISO certified, companies must be able to demonstrate consistent compliance to every letter of these standards.

Additional considerations

• The 3PL warehouse facility should be clean and have adequate space for storage that also allows for maintenance, and inspection. It should have adequate lighting, ventilation, and environmental conditions for the drugs being stored. There should also be a quarantine area for drugs that have expired or otherwise can no longer be used.
• The facility’s security systems and processes – both inside and outside – must be able to prevent unauthorized entry and protect against theft.
• Drugs without specific storage requirements should be stored at “controlled room temperature” (according to the FDA).
• The provider’s inventory and WMS systems must be able to provide visibility into product location.
• The 3PL must be able to provide written documentation of policies and procedures as well as inventories and distribution.

Lean on Kanban Logistics for Your Pharmaceutical Supply Chain Needs

If your company can benefit from the services of a pharmaceutical warehousing provider that is ISO-certified and has expertise in performing recalls, then look no further than Kanban Logistics. Kanban is a North Carolina 3PL with over one million square feet of warehousing space centrally located exactly between Boston and Miami  And, when it comes to managing that space for our customers, we adhere to the most rigorous standards for quality and compliance, enabling us to be a trusted partner to pharmaceutical companies throughout the region. To learn more about our services, contact Kanban today.