The Healthcare industry is arguably the most regulated industry segment in the world. This market includes all products which directly or indirectly impact the health and well-being of individuals, including pharmaceuticals, medical equipment and devices as well as services such as insurance and hospitals/staff.

Here are some ‘must-know’ Healthcare Statistics for 2020

  • The global health industry was worth $8.45 trillion in 2018 with an annual growth rate of 7.3%
  • Global healthcare spending could reach over $10 trillion by 2022.
  • The US has the greatest healthcare spending, sitting at $10,224 per capita.
  • There are 784,626 companies in the US healthcare sector.
  • The internet of things (IoT) can lower the costs of operational and clinical inefficiencies by $100 billion per year.
  • 40% of all IoT technology will be health-related by 2020.

We’ll focus today on the products within this segment; specifically, pharmaceuticals. Pharmaceutical manufacturing is a highly controlled process. It is governed by regulatory bodies present in almost every country and continent which determine the efficacy of these products, determine the minimum process and quality parameters and place the requirements in terms of standards to be followed across the supply chain. Their oversight enables manufacturers to safely develop, produce and distribute healthcare products.

The Role of the FDA

The US’s FDA is the leading regulatory authority in the world, placing strict requirements and enforcement for the supply chain participants who serve the US healthcare market.

The FDA created regulations that companies in the pharmaceutical segment must follow: the Current Good Manufacturing Practice (CGMPs) for human pharmaceuticals. This is 21CFR Part 210. The CGMP regulations for drugs contain minimum requirements for the methods, facilities and controls used in the manufacturing, processing and packaging of a drug product. The regulations make sure that the product is safe for use, and has the ingredients and strength it claims to have.

As Pharmaceutical manufacturing companies fall under FDA oversight, each and every step of their R&D and manufacturing process must be validated, their production process fully documented, actual production standardized (primarily through automation), every batch produced fully traceable from supplier to distributor, every operator properly trained and every single pill/capsule/syrup/injectable manufactured meet the quality standards set by the producer.

To meet the strenuous requirements of CGMP, if there were ever an industry segment which needs Industry 4.0 implementation, it would be the pharma industry. Let’s examine how a modern MES is able to help manufacturers in the pharma segment better manage their production and their supply chain to unleash Industry 4.0 benefits.

Understanding the Pharma Manufacturing Process

First things first, let’s briefly understand the pharmaceutical manufacturing process. Any drug which is manufactured aims to deliver an API (active pharmaceutical ingredient) to the intended biological system (body) and illicit a positive response against a particular ailment or issue with said biological system.

The process begins when a particular ailment or condition is targeted. The discovery to manufacture process is an arduous one– only one out of every 5,000 drugs researched and developed for a particular ailment makes it to the market with full approval from regulatory authorities—and this is a 12 year cycle time.

Here is a high level overview of the pharmaceutical drug manufacturing process:

Manufacturing process in the pharmaceutical industry
Manufacturing process in the pharmaceutical industry

The manufacturing validation methodology includes being able to replicate and standardize the process followed in the laboratory at a larger scale. The process depends on the type of product being manufactured and has various complex and precise steps; for example, if the API is being delivered in the form of a tablet, a minimum viable production process would involve at least the following steps: dispensing of raw materials, blending of materials in exact proportion as required for successful delivery of the API, dosage formation via compression for tablets or filling for capsules, coating and polishing the finished product and finally packaging.

While the process itself may resemble other manufacturing processes, it is the need for precision at each and every step, while keeping track of yield and other process metrics that distinguishes pharma manufacturing and makes it so complex.

Imagine a scenario in which a biological medical drug being manufactured and due to an error in the production process it now has double the active agent it was intended to have. The drug which might have been lifesaving may very well become life threatening. This implies the margin for error here is ‘zero’ and any mistake made in any of the manufacturing steps can prove lethal. This is the reason for oversight and why pharmaceutical manufacturers are subjected to extremely strict regulations, quality standards and mandated to keep detailed process documentation.

Drug manufacturers are required to have records of all drugs in development, starting at the R&D stage. The development process itself is validated.

Once a drug passes Discovery, Development and Research, and enters into Manufacturing, production has clear requirements to validate each and every step of the process and the exact output of each individual process step. Actual production genealogy mandates the recording of every movement of the material, from separate ingredients to being mixed in a batch and formed into the final product.

The pharma industry potential is for very high automation (68%) based on medium skill levels for their labor and moderate product complexity, according to McKinsey. Nearly 50 percent of pharmaceutical and medical device companies have line automation integration underway and will be tracking overall equipment effectiveness (OEE), according to the 2017 PMMI report, The Evolution of Automation.

As part of the GMP, only qualified and trained personnel may access the equipment. The operator’s duties include equipment maintenance (ensuring that the equipment is performing at the optimum level); material movements and quality checks. Yield is recorded at each step; in the early days of pharma manufacturing, this was done using paper-based forms.

Lastly, the product is tracked as it leaves the packaging station and is either warehoused or shipped to the end user or distributor, again with the requirement for full and extensive recordkeeping. In North America, the deadlines imposed for meeting the Drug Quality and Security Act (DQSA) of 2013 came into force in 2018 with later deadlines for re-packagers and wholesalers. The regulation requires a transaction document and serialization of all prescription products, enabling the electronic transfer of specified transaction information and complete supply chain history.

The Role of the Contract Manufacturer

To scale operations without the capital outlay, pharmaceutical manufacturers have turned to ‘contract manufacturers’—basically, outsourcing the final product manufacture to a third party. Results Healthcare, a consulting firm that takes a close look at the pharma industry, expects outsourced pharmaceutical manufacturing to increase, especially for small-molecule formulations. According to its Pharma & Biotech 2017 — Review of Outsourced Manufacturing, “Overall, the level of outsourcing is 24.6% [in 2017] and this is expected to grow,” predicting that outsourcing will rise to just over 26% by 2021.

The use of contract manufacturing does not negate the need for an overarching control system like MES. Rather, it extends the use deeper into the pharma manufacturer’s supply chain; a contract manufacturer is another site or area where manufacturing occurs, and requires the oversight as if it were within the manufacturer’s four walls.

Pharma Needs MES

The preciseness, the demand for safety and data-intensive nature of pharmaceutical manufacturing has driven the need for having an MES at the center of the pharma supply chain. The healthcare and pharmaceuticals sectors held a significant share of ~20% of the global manufacturing operations management software market in 2018 and is forecasted to grow to 23% by 2027.

Manufacturing Operations Management (MOM) Software Market Size (US$ Mn) Forecast, by Functionality, 2017 - 2027
Manufacturing Operations Management (MOM) Software Market Size (US$ Mn) Forecast, by Functionality, 2017 – 2027

We know that the pharma sector is highly regulated, which means there are requisite compliance steps to be maintained at each and every step of R&D and production, including the process, the equipment and the people involved with the manufacturing. Critical control points must be captured and preserved in records; there is a mandatory track and trace requirement for raw material and WIP through the stage where the final product is ready and packed, which means lot genealogy and recipe management are critical. Personnel must be trained and validated; and the entire supply chain, starting with raw material and ending with shipped product, requires oversight, documentation and adherence to standards.

Currently though, a large percentage of the industry still handles data using paper-based methods, either manually or through spreadsheets, which is then converted to requisite compliance documents. From a supply chain visibility perspective, since the main manufacturer and the suppliers operate as separate entities, and due to lack of connectivity in the IT landscape, communication of issues and resolution of these issues is marred with delays. All this points to the need of fine-tuning the pharma supply chain and understanding how it can be ready for the benefits industry 4.0 has to offer.

This is where the modern MES comes into the picture. The very role of an MES is to create an information infrastructure for manufacturing with a data platform which provides end-to-end connectivity and visibility across the supply chain. This is the basic requirement of a modern pharma supply chain.

A manufacturing data platform implies that data from the production process is captured at each transaction pertaining to every batch and every lot, and then the data is enriched, using real-time, historical and legacy data and information that is being fed to and from the supply chain IT applications.

Modern MES’s are the foundation for the manufacturing data platform, integrating with real-time equipment, IT applications which run the business processes (ERP, CRM) and operations applications (such as data historians or PLCs) which run the production processes. The critical aspect here is not just integration, but the ability to accept data in various forms and formats and then convert and deliver it in the form of intelligent information to the requisite personnel and supply chain partners at the requisite time.

An MES application which is IIoT-enabled expands its ability to bring data into the platform, starting with edge devices and extending it into the IT and OT applications. This allows for constant data capture from the process and supply chain, and records it in requisite formats to ensure compliance as an activity remains automated.

The MES, via local or internet connection, constantly communicates with process equipment, operator devices, material pallets and relays captured data to higher level applications, where it can be reviewed, analyzed and actions taken to ensure process parameters remain well within the established limits.

The modern MES also ensures that each and every operator gaining access to the process is qualified to do so. It provides details of when an operator was last certified, when the certification/training is due and may even restrict access if the person accessing a particular device or its data isn’t qualified to do so.

The MES application also automates the entire R&D to production process by creating a virtual (digital) twin of the actual physical production process, which allows process owners to execute the process as intended and trace each and every lot being produced, while ensuring the recipes are being followed precisely. Any variation detected is reported and over a period of time from implementation, the MES through AI-enabled machine learning is also able to highlight data patterns which may lead to process improvements, enhanced equipment maintenance, operator skill upgrades and/or process re-engineering.

Higher level applications like ERP and SCM are another source of information for the MES. Typically, ERP will contain the quality standards, inventory levels, material specifications and shipping information required by the MES for accurate execution. The MES uses data it collects from the operation (yields, material consumption, inventory movements, etc.) to feedback results to the ERP, providing a real-time view of order or product/lot status at each critical manufacturing stage. 

The level of enterprise integration and overall visibility of operations offered by the MES is unmatched in any other application. It gives personnel the ability to better understand the data coming out of the shop floor processes to make better decisions on production, quality, packaging and shipping. The sheer cost of compliance, traceability, coordination and reporting using paper-based systems quickly becomes unmanageable, making a company less competitive vis-à-vis a competitor who uses the modern MES to reduce said costs.

For pharma manufacturers, a MES is a major boost towards Industry 4.0. It not only helps meet, but exceed all regulatory requirements with traceability, electronic documentation, operator certification and process oversight. It is the foundation for any GMP. The ability of an MES to create a fully-connected data platform enables at a high level overall supply chain visibility and in the plant, real-time decision making. Most importantly, a modern MES will scale and grow with your needs; so as you add lines, people, or products, your MES, if chosen correctly, will continue to provide you with the critical infrastructure you need for compliant Industry 4.0-ready operations.