Due to higher lot sizes and lower initial shelf-life, inventory obsolescence poses a substantial risk to the pharmaceutical drug supply.
In order to plan pharmaceutical products, it’s crucial to know how long they have left on the shelf and when they’ll expire. If the remaining shelf life of a product is shorter than a specific number of days, it cannot be distributed to wholesalers or pharmacies. The product’s initial shelf-life, at the time of FDA clearance, could be as short as 18 to 24 months. However, due to the time necessary for shipping, packaging, and validation processes, some of the shelf life has already been spent.
Due to higher lot sizes and lower initial shelf-life, inventory obsolescence poses a substantial risk to the pharmaceutical drug supply. As a result, if market demand is significantly lower than the lot size, the full drug product batch may not be useable, and the leftover quantity may expire or have a shorter shelf life than required.
Manufacturers of pharmaceuticals must keep batches in good condition and undergo regular stability tests. As a result, the shelf-life will be extended as new stability research data becomes available or as extrapolated data from the accelerated stability study becomes available.
The typical stability study is based on three factors – temperature, humidity, and exposure to light.
- Temperature affects stability because heat can break down the chemical compounds in the drug.
- Humidity affects stability because water molecules will react with the drugs in your medicine cabinet.
- Light exposure can cause oxidation reactions that change how strong a drug is over time.
Supply Planning Challenges
The supply chain planning of drug products is made more difficult by the instability of shelf-life data.
Planners require real-time visibility into remaining shelf life and forthcoming expiration dates, as well as the ability to eliminate batch quantities from planning calculations if the remaining shelf life is insufficient. However, based on the probable effective date for a shelf-life extension, continue to assess the same batch for future demand.
Supply planners must keep track of all drug product batches’ remaining shelf life and expiration dates. They should be able to plan requirements based on potential expiration date extensions or exclude lots with a limited shelf-life that will not be extended using the system they are utilizing. The planning systems should not simply combine and net off the available stocks without taking into account the risks of expiration.
If the ERP or planning systems do not have shelf-life tracking capabilities, the planners will have to put in a lot of manual work, which could lead to substantial obsolescence risks or unforeseen shortages.
SCmple provides full supply planning capabilities to solve these critical shelf-life expiration issues. Contact us to learn how SCmple can help you improve your supply planning.