A Conversation with Shabbir Dahod, TraceLink

The Drug Supply Chain Security Act (DSCSA) was passed in 2013 with a complex schedule of deadlines starting this year and continuing into the early 2020s. That mandate is generating a dramatic upswing in pharma industry capital investment and operational change. One of the service providers at the center of this transformation is TraceLink, which just moved into expanded headquarters in North Reading, MA, and is developing software tools and data services for both the US market and countries around the world that are also mandating traceability in pharma supply chains.

Shabbir Dahod, TraceLink president and CEO, has long been associated with the traceability subject, going back to his founding of an earlier company, SupplyScape, in the early 2000s. (That company was ultimately absorbed into TraceLink after its founding, in 2009.)

Pharmaceutical Commerce sat down with Dahod to talk about DSCSA, the pharma industry’s current supply chain management capabilities, and the future outlook of commercial IT management. Here’s what he had to say.

1) You’ve spent well over a decade focused on pharmaceutical supply chain integrity. How did you come to dedicate yourself to that topic, so early and for so long?

After I graduated college (Boston University, 1985, computer science), I had the opportunity to work in a variety of IT fields, including a company, Asymetrix, founded by Paul Allen after he left Microsoft. I worked on databases, natural language learning and multimedia, and early on was tagged for a management role. Later, I became familiar with the work going on at the Auto-ID Lab at MIT, which was one of the earliest developments in what has become known as “the Internet of Things (IoT)”—the concept that physical objects would have an identity and would communicate on the Internet.

Around this time, in the early 2000s, the efforts by FDA and the States of Florida and California to combat counterfeit drugs started to build up. I had hired some of the Auto-ID people, and we realized very quickly that we could marry IoT concepts with the problems of the pharma supply chain—it was an area where technology could have a big impact. That led to the founding of SupplyScape and the work we started on drug pedigrees and traceability. Along the way, a passion grew in us with the realization that people’s lives are at stake—thousands or hundreds of thousands can be affected by counterfeit drugs. It’s a silent killer; we’ve met people who have personally been impacted. We made it our mission to protect patients.

This has been very fulfilling work; I’ve been at it more than 13 years now, and through some tough times. When California postponed its e-pedigree plans in 2008 (at the time, a fairly rigorous track-and-trace system was being scheduled for use within the state; the postponement included a deferral to federal action, which eventually took place in 2013—ed.), we went from a growing company of more than 100 to a reduction to 15. Our core team restarted the effort as TraceLink in 2009.

2) The current march toward traceability started in the mid-2000s, and has many years yet to progress. Why is it taking so long?

The basic issue is, traceability and supply chain coordination is very, very hard and complex to manage. The US pharma supply chain is very complex, multi-tiered, and operates at high volumes. Combining all these complexities is challenging in and of itself. Placing serial numbers on pharma packages are not just a matter of getting the right printer; a manufacturer has to figure out how to manage the volume of data generated by the events associated with that number. When you operationalize this process, you have to think about conveying that serial number data into an inventory system, then into a picking, packing and shipping process—you have to move that data through an internal architecture.

What we’re observing is that it’s hard and complex to do all these things, and it’s taken longer than anyone had estimated initially. There is now a knowledge base and set of standards that has taken the industry 10 years to evolve. There are good technology providers and good technologies on the operational side, but now there’s a network problem in an industry where trading partners who are accustomed to phone, fax or email ordering have to deal with these volumes of data. Massive networks and massive databases are being created. Just the first step in the Drug Supply Chain and Security Act (DSCSA)—exchanging information at the lot-level—has been complex and challenging. On paper, it looks as if most transaction data flows through the three major wholesalers, but the reality is that there are hundreds of wholesalers shipping product to tens of thousands of pharmacies and doctors’ offices. There is a good framework to advance, but it’s going to take time.

3) You’ve been outspoken that the current traceability initiative will protect against counterfeit products entering the supply chain, but many experts note that traceability initiative will not be a bulletproof protection. What do your clients ask you about this?

The perspective I get from our clients is that serialization is happening because it’s a matter of compliance with the law. But they also realize that serialization will create the infrastructure to support the prevention of counterfeiting. And once that infrastructure is built, you will have an incredibly valuable information network that connects to the market, and has fidelity at the item level to track product movement. Now you can leverage that information to improve inventory levels, address market demand and overall supply chain management. There will be an improvement in financial relationships—being able to reconcile chargebacks, rebates and product returns—and to do that more quickly.

On top of those enhancements, companies will be able to improve their market effectiveness. There will be better market information, how you’re doing on a real-time basis and how you’re doing on a regional basis. If pharma companies invest in the right kinds of information layers, the benefits will encompass supply chain, commercial operations and marketing, as well as compliance. Our success is built on the fact that we position our technology to be part of a long-term solution, not a point solution for regulatory compliance. It’s going to be transformational.

4) Traceability is moving forward rapidly worldwide. How is TraceLink addressing this?

Some of our clients are the biggest pharma companies in the world; they are looking at traceability from a global perspective. They are evaluating their needs on an enterprise level not just for today, but for tomorrow’s emerging markets. They need a single platform to manage all their products, because you don’t want a porous aspect to the integrity of your supply network.

This brings in another complexity: While there are core capabilities to most national traceability programs, each country has its own local flavor. In China, serial numbers are obtained from the national government. Brazil has its own requirements, as does the EU and other European nations.

We’ve architected the TraceLink Serial Manager solution to have the same basic building blocks, then modules are added for each country’s unique requirements. It’s also a fact that some packaging lines handle production for multiple export markets—a line might be producing for the US on one day, then China or another country on another. The serialization management system needs to be able to support those local flavors in managing numbers according to each country’s requirements. This is also true for the reporting and data exchange requirements.

5) TraceLink isn’t the only cloud-based traceability system, but arguably no other company has made such an extensive commitment to cloud-based computing. How is this going over with pharma clients?

Today’s true cloud-based services are transformational for pharma companies. But first, you have to distinguish between true cloud-based computing, with an elastic computing framework, and what IT experts are calling “cloud washing,” or claiming to be cloud-based simply because data are stored remotely and delivered via an Internet connection. I’m old enough to remember the transition minicomputer networks to client server-based computing, and then what had been called software as a service. Today, the resources from vendors like Amazon Web Services (AWS), with whom we’re closely aligned, represent a real step change from the past. AWS is a massive infrastructure of more than 50 data centers around the globe, with massive redundancy that allows you to host and manage enormously large volumes of data.

With AWS cloud services, the concepts of “single-tenant” or “multi-tenant” hardware architectures are becoming outdated. Cloud services feature database tools like Amazon’s Dynamo, which stores databases across multiple servers, providing both fast database access and the capability for massive data storage. With these newer data storage methods, you have a network-based platform capable of sharing computing resources without sharing the same database. So the question becomes, not whether you’re single- or multi-tenant, but how distributed and scalable your data and computing resources are.

We’ve heard of instances where a company attempted to store 100,000 or so serial numbers in a single relational database. Even after taking hours and hours to load this database, the system falls over and dies because of the scale of numbers and events being stored.

Another question that comes up is data security. AWS, with its massive redundancy, and with the wide range of certifications and audits it goes through, actually provides better security than what any single pharma company can develop on its own. That’s why clients of AWS like the Nasdaq stock exchange, or even the US Dept. of Defense, use AWS.

Here’s another way to look at the question. A typical mid-tier pharma company might ship 125 million units of products in a given year. There are, at a minimum, five or so “events,” such as commissioning, storage in inventory, etc., that will accompany that unit. So now we’re talking about more than 600 million records that have to be stored and associated with each other. That data must be kept in an archive for up to 12 years, so now it’s nearly two billion records. The scaling issue becomes very important in this context.

We have a very interesting dialogue with pharma clients when we’re talking about cloud-based computing. They are already committed to cloud-based computing for IT needs; they are looking for business partners who can go with them to where they need to be.

6) TraceLink has published data on tens of thousands of “members;” how does that translate into actual customers?

We define customers as those who pay annual subscriptions for applications running on the Life Sciences Cloud. But here’s how it takes effect: We have more than 100 customers in the pharma industry—manufacturers, wholesale distributors and dispensers. In the case of manufacturers, they each might have 100 other distributors, and those distributors might have several thousand ship-to points, such as retail pharmacies or clinics. When our solutions are installed, our customer invites their trading partners to log into our network to be able to receive transaction history data electronically. Now the network efficiency comes in: Those end users (or customers of our customers), once they are logged in, are also recognizable to other suppliers—they don’t have to open another account. So a pharmacy might be receiving product from multiple distributors or manufacturers, and that pharmacy can access the transaction data from any of their suppliers that are using TraceLink.

TraceLink’s networking tools aren’t used solely for traceability data; we have multiple customers who are using it to exchange quality management data, supplier tracking and performance measures, such as would be seen between a pharma company and its contract manufacturers. We want to be part of a larger vision, that the supply chain can be monitored end-to-end, from raw materials to finished products delivered to patients.

Exchanging transaction data to comply with DSCSA is happening right now, every day. Our network count is more than 124,000 and growing every day. We’ve already processed more than two million transaction histories, representing about 100 million trade exchanges at the lot level. Some of these are already being tracked at the unit level, which is the industry requirement starting in 2017.

7) The full import of DSCSA isn’t scheduled until the early 2020s. What will today’s pharma supply chain look like by then?

I think the first thing to note is that counterfeit and diverted products will be greatly reduced, enhancing patient safety. That’s No. 1. On top of that, there will be a more efficient, responsive supply chain, and manufacturers will have greater visibility and less friction in their contractual relationships. Demand by regional levels will be better understood, so that production in one region might ramp up even as it scales down in another region. Sales and marketing effectiveness will be better monitored and better understood

Still, it’s worth mentioning that over the past few years, we’ve learned that there’s a lot of work to be done to build these systems. Some companies that waited until the last minute to begin recording lot-level transaction data are now scrambling to get into compliance—wholesalers have said that their products won’t be accepted without the regulatory information. Downstream customers, logistics partners and others still have to come onboard, and government agencies in the US and abroad need to be brought in. All this takes time, and not just a few months. Manufacturers need to start now to meet the 2017 deadlines.

8) How has TraceLink’s success affected you personally?

It’s been a long journey, but that passion I recognized early on about our work affecting patient safety is still there. Now my job is to manage the great people that we’ve hired, and empower them to be successful. On a personal note, my family has been involved in a variety of charities, and my wife is a board member for Global Smiles, a charitable organization that helps individuals suffering from cleft palate condition. I participate as much as I can; we’ve been on a trip assisting surgeons in their work. I was just a gofer on that trip, but it’s been very enlightening to see how healthcare is carried out around the world.