Handling complexity

Planning ahead

Keep it cool

Through the desert

The last mile

Reaching the patient

Continuing the cycle

Chain reaction

As simple as it sounds, supplying quality medicine on time every time is an exacting task. Defying long distances, harsh climates and responding to fast-changing market needs are just some of the daily challenges that are tackled by the Pharma Supply Chain Operations team in Basel, which processes around 5000 deliveries every month to over 120 countries. live magazine tracked the supply chain route from Basel to the United Arab Emirates, experiencing first-hand that collaboration, quality and integrity are fundamental in making sure the right drug gets to the right patient at the right time.

Text by Goran Mijuk and Michael Mildner

From the production in Switzerland to the distributor in the United Arab Emirates – the supply chain entails hundreds of professionals around the world working hand in hand.

Table of contents

Handling complexity

Planning ahead

Keep it cool

Through the desert

The last mile

Reaching the patient

Continuing the cycle

This article was originally published in June 2015.
Published on 12/06/2020

Diab Kurdi remembers that, when he started his career as a pharmacist in the United Arab Emirates more than a decade ago, medicines would run out of stock regularly in the region, which depends heavily on imports due to limited drug production facilities in the Persian Gulf.

“In the past it was not unusual that medicines were in short supply,” he told live magazine last March at his office in Abu Dhabi, where he now runs the hospital pharmacy of Al Noor’s Medical Group, one of the largest healthcare providers here. “Patients had either to find alternative treatments or wait until the drug was available again. It was often a very difficult situation.”

Novartis was not affected by these interruptions. But others have struggled to provide drugs in time. According to a survey by the Abu Dhabi Health Authorities, around one quarter of the more than 7000 registered drugs in the region were hit by shortages in 2008. In rare instances, regulators found that even life-saving medicines were off the shelves.

Amid press reports that some patients had died as vital medicines could not be organized quickly enough, regulators initiated a series of reforms, making it incumbent on hospitals and pharmacies to keep close track of their stock. They also required healthcare intermediaries such as distributors and warehouse facilitators to inform regulators routinely about their stockpiles.

The moves helped improve the situation markedly. Even though the United Arab Emirates are experiencing spectacular economic growth and have seen sharply rising healthcare demand, concerns about supply shortages seem like a distant memory. Today, more than 2500 patients frequent the Al Noor’s hospital pharmacy daily, unaware of the efforts that are necessary to safeguard the timely arrival of high-quality medicines, including a medicine against neurodegenerative disease, which live tracked from Basel to Dubai through the Arabian Desert to Abu Dhabi.

Handling complexity

As we sit in Diab Kurdi’s office looking at the busy scene behind the frosted glass that allows a commanding view of the pharmacy, our journey draws to its seemingly trivial end when the pharmacist hands the medicine to the patient. But what seems like a simple, everyday gesture is in fact the culmination of a highly complex process.

“Hardly anyone is aware of what it takes to deliver a drug at the right time at the highest quality,” says Abderrahim Maghfour, Head of Supply Chain Management in the United Arab Emirates. Maghfour is responsible for collecting local orders and monitors the end phase of the distribution. “But this ignorance is actually the best thing that can happen. Because it means that we have done our job well, doctors and pharmacists can concentrate on their work and patients can be treated in the best way.”

The supply chain process starts with a simple call or an e-mail from a customer to a country representative such as Abderrahim Maghfour, who feeds the orders into an automated software system. That sets off a chain reaction which snowballs into a powerful avalanche of activity. It encompasses hundreds of Novartis associates and external partners who work hand in hand to safeguard the high-quality production and delivery of medicines.

In a diligently orchestrated fashion, the Basel-based Pharma Supply Chain Operations team processes the orders from around the world and keeps a watchful eye on the medicines until they arrive at their final destination. Comprising five distinct units with around 40 associates – among them specialists who handle the planning and legal documentation of the deliveries – the group is part of the divisional Supply Chain Organization that spans the globe and is headed by Jesus Corchero.

Planning ahead

“Distribution management is essentially a planning task,” says Heike Maenner, Head of the Logistics Experts unit, which is responsible for transportation, invoicing and documentation of the orders and works in tandem with Pharmaceutical Operations, local supply chain representatives as well as logistics specialists around the world.

“Once we receive the orders, the planning process begins, requiring coordination between various teams within different functions and countries but also with third parties such as customs officials and regulators,” she explains.

But even though the process is well-structured, managing the supply chain is a delicate task, requiring diligence, a penchant for big num-bers and a talent for multitasking. While it normally takes around 48 hours to prepare the documents for delivery from Basel to the destination in question, the sheer amount of work involved is breathtaking: Every month, the Supply Chain Operations team in Basel needs to process and monitor around 5000 deliveries to more than 120 countries. This corresponds to more than 23 000 transport orders a year, each of which is made up of several individual deliveries. In total, these shipments have an annual net worth of more than 30 billion Swiss francs, equaling around 15 percent of all Swiss exports.

“Usually we can expect the process to run relatively smoothly,” says Heike Maenner. “But there can be instances when an issue may prompt us to seek alternatives. Then fast action is required because we need to safeguard the timely arrival of many life-saving drugs that are needed by thousands of patients worldwide.”

Such a critical episode happened in 2010 when the eruption of Iceland’s Eyjafjallajökull volcano brought air travel in Europe to a virtual standstill. More than 100 000 flights had to be grounded due to the ash cloud that built up across the continent, leaving only a few airports in Southern Europe operational.

“We were already preparing to fly the goods that were scheduled for overseas destinations from a small Spanish airport, when after eight days the ash cloud settled and flights resumed from Basel,” recalls Heike Maenner.

Keep it cool

Seeking alternatives to air freight is often not an option for overseas exports because even though Novartis is working towards reducing cargo flights amid efforts to cut carbon dioxide emissions and costs, delivering goods by air remains a vital element in ensuring that medicines reach patients on time and in the best quality.

“Especially highly complex biological drugs that must be kept at consistently cool temperatures have to be transported by air,” said Daniel Thoma from the Logistics Experts unit as he stood on the tarmac of the EuroAirport Basel-Mulhouse on a Sunday afternoon in early March, watching how several pallets with Novartis medicines, alongside drugs from other companies, were being loaded onto a Boeing 777 that had arrived from Amsterdam.

“It’s essential that the drug’s temperature is controlled all the time because it has a substantial effect on its efficacy,” Thoma said. “If we exceed the temperature limit, the drugs will not be delivered to our customers under any circumstances.”

Most drugs have to be kept at room temperature, while many biotech drugs need to be stored at between two to eight degrees. To guarantee that they are kept under stable conditions, Novartis monitors the entire supply chain through so-called data loggers. These small microchips gather temperature data which are checked at every transfer point where goods are repackaged for further distribution.

The temperature control starts immediately following production of the medicines in Stein or elsewhere. From there, the medicines are first transported to the central hub of Swiss logistics specialist Planzer in Prat-teln, near Basel. When transported by air to overseas destinations they are delivered to the EuroAirport warehouse. From there they depart directly on a cargo flight or connect by truck to another European airport.

One of these flights is the weekly cargo trip to Dubai that is operated by Emirates Airline. The carrier has designed special containers that allow for permanent temperature control until the medicines are unloaded at Al Maktoum Airport, says Nathalie Picaud, cargo manager at Emirates SkyCargo. From there, the goods are transported by truck to the regional warehouses and later to the distributors. After that, they reach the individual pharmacies and hospitals, a process that is monitored locally by the supply managers from the Country Pharma Organizations such as Abderrahim Maghfour, who are usually in close contact with Basel and receive support from headquarters when needed.

Through the desert

While temperature control can be handled relatively well in the US or Europe with its moderate climate, good roads and warehouse infrastructure, the transportation of medicines in Africa, the Middle East or Asia can be challenging.

One initial hurdle is customs control, where unnecessary delays need to be avoided to reduce the risk of drugs being damaged. Standing too long on the airport tarmac, which can become baking hot on a summer’s day, or border police who require drug packages to be opened due to a lack of documentation are just some of the serious consequences if documents are faulty or incomplete.

“The ability to get goods across borders quickly and efficiently is crucial,” says Global Trade Compliance Manager Elizabeth Foster. “Compliance with trade laws ensures a smooth supply chain and avoids the risk of fines, penalties and potential damage to the company.”

Beyond efficient customs clearance, supply chain managers also need to make sure that warehouse and distribution partners in the individual countries maintain high standards, irrespective of how challenging the situation on the ground might be.

“Winning for the patient means we ensure that the entire chain from production to the customer is seamless,” says Jesus Corchero, who as Head of Pharma Supply Chain manages the global distribution network, which has more than 600 associates in about 70 countries.

Besides overseeing a network of around 60 warehouses and juggling coordination between the different distributors, the Pharma Supply Chain is also increasingly collaborating with Alcon and Sandoz to leverage the network of the three divisions. “A strong focus on integrity and quality is crucial for our success, as is our ability to collaborate both across functions and divisions as well as with external partners, who are required to share our values regarding quality, integrity and performance,” Jesus Corchero said.

One such partner is Hellmann Caliper, a joint venture firm created by Germany-based logistics specialist Hellmann and Caliper Integrated Logistics of India. Just a few minutes’ drive from Al Maktoum Airport the logistics experts have built the first specialized healthcare warehouse in the region, where medical products from the world’s main healthcare players are collected and then transported by truck throughout the Persian Gulf.

Only shortly after its inception in 2010, the warehouse had to be expanded as the need for storage increased rapidly amid strong demand for healthcare products in the region, which currently stands at about 40 billion US dollars. According to Alpen Capital, a consultancy, this strong growth momentum is set to continue given the economic expansion in the Gulf, with the healthcare market expected to grow at an annual rate of 12 percent to 69.4 billion US dollars by 2018.

“Demand for healthcare is rising sharply and so is our need to increase capacity,” says Eric ten Kate, director of Hellmann Caliper in the United Arab Emirates. He walks us through the halls of his warehouse, which feels like a gigantic Ikea store. Innumerable shelves are so brim-full of huge cartons with medical products in the air-conditioned halls that one almost forgets the warehouse actually stands in the desert.

“While outside temperatures can rise above 55 degrees Celsius in summer, we have moderate temperatures here,” ten Kate says, adding with a smile that many of his colleagues from the United Arab Emirates or India need time to adapt to this specific room climate and usually put on heavy winter clothing when they work in the special storage rooms, some of which are cooled down to minus 20 degrees.

“We have to make sure the temperature is kept constant at all times and that, if something goes wrong, we have the right emergency plan in place,” ten Kate says, remembering an instance when one of the deep-freeze storage facilities suffered a power outage after a rare day of rainfall. “It was one of those days when Murphy’s Law becomes reality. But thanks to our experience and dedicated workforce, we were able to solve the problem within a few hours.”

The last mile

From Hellmann Caliper’s warehouse, trucks pour out in all directions to the individual distributors. One such is Alphamed Pharma, a unit of Al Khayyat Investments, which executes the final distribution to hospitals and pharmacies and takes responsibility for the delivery of medicines.

Compared to the warehouses of Planzer and Hellmann Caliper, which handle bulk deliveries that usually consist of uniform cartons stacked up on heavy pallets, the scene at Alphamed is bustling with human activity.

When the trucks arrive at Alphamed, associates first check the data logger to see whether the medicines were handled correctly during transport. Then dozens of associates unpack the huge cartons and prepare the individual deliveries on long tables, which are divided into sections for each customer. Before repacking the goods in small boxes, the associates check off each of the thousands of colorful packages against the customer order. Then the medicines are delivered in mini-trucks to the individual pharmacies and hospitals in Dubai and Abu Dhabi, including Al Noor.

“Every day we handle about 200 to 300 individual deliveries, comprising thousands of products,” says Lokman Ahmad Moussa, distribution center manager at Alphamed, which besides medicines also handles the delivery of cosmetic products. “We monitor our stock regularly too and are in close contact with regulators and our clients to avoid any potential supply chain disruption.”

“Also,” he says, as we walk past two workers who are replacing the sealing rings and sun shields on the windows, “we have a permanent maintenance in place, ensuring that the climate conditions of our distribution center and our trucks meet all the standards. And on top of that we train our associates regularly to familiarize them with the high quality requirements of our clients.”

Reaching the patient

As the trucks of Alphamed prepare for the final stretch of the long distribution journey, which started weeks earlier and thousands of kilometers away, we follow their route to Abu Dhabi. We leave behind the noise and bustle of the warehouse to meet Iyad Khoudeir, consultant neurologist at Al Noor Hospital, in his office.

Khoudeir, who studied medicine at the University of Bordeaux, is one of the region’s leading neurologists, treating hundreds of patients suffering from multiple sclerosis, epilepsy and other brain-related conditions in this city of more than 2 million people. Taking a short break in his busy daily schedule, Khoudeir says that in the years since prescribing innovative neurological drugs to some of his patients, he has never experienced any supply issues with the drug, highlighting the importance of a flawless supply chain that works so well nobody actually notices it. “Doctors and patients alike need to trust the medicine in every respect, especially when it comes to the treatment of difficult diseases such as multiple sclerosis,” he says. For patients to change their regimen and stick to it means they have to be certain that the drug will be permanently available. Any disruption would severely undermine their trust, even if a drug is more effective, easier to use and has good tolerability,” Iyad Khoudeir explains.

“Only if we stay open and work towards providing the best possible treatments to patients can we expect to win the trust of our customers,” said Ahmed Samir, Production Specialist in Abu Dhabi and Al Ain. “Having the backing of a flawless supply chain is a key element in these efforts.”

Continuing the cycle

Meanwhile, as we return to Basel, the Supply Chain Operations team, which shares its offices at the Klybeck site with other distribution functions, is working to prepare the next deliveries which will arrive to thousands of patients worldwide over the coming weeks and months.

“Our main priority here is to ensure that we keep up the quality and speed of delivery and stay on top of international and local standards,” says Lukas Fischer, now Head of Supply Chain Region Europe, who until mid-April was leading the Supply Chain Operations team that is now headed by José Simo.

Besides complying with strict global trade laws and specific country regulations, Fischer says, the unit also needs to stay prepared for eventual calamities that could disrupt the supply chain. While emergency plans in the event of an earthquake in Basel or a strike in central Europe are being discussed, the team is also assessing other potential risk factors such as the breakdown of the IT system that could undermine business continuity. “Whatever happens, we need to make sure that our medicines reach the right patient on time, every time. Although this might feel like a very technical task, it is vital to those who depend on our medicines. This makes our work difficult but at the same time extremely satisfying.”

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