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Pharma Business SIDEBAR 2: BRAND-PROTECTION FINANCIAL AVOIDANCE ACTIVITIES 1. New products introduced include anticounterfeiting technologies. Calculate the revenue loss avoided by using estimates of predicted levels of fake goods present in the market. Make assumptions based upon the general product category (e.g. lifestyle or oncology drugs), market risk (channels and countries of sale), and unit price. 2. Implement and adopt supply chain best practices. A market value is assigned to implementation of each practice with appropriate lag times for old inventory flow-through. 3. Reduce insurance premiums via installation of facility or cargo security upgrades. 4. Realize operational efficiency gains by improving the transparency and control of finished goods. These include documented improvements in: • supply/demand balancing • expiry date management • returns processing/integrity • recalls and market retrieval effectiveness • new-product tracking • in-transit and storage theft avoidance • chargebacks/rebates: reduced labor and reconciliation time cept that the legitimate supply chain is being violated, in part, due to the limited visibility and control of the manufacturer via downstream supply chain transactions. Beyond wholesalers, the pharmaceutical supply chain (which is more of a network than a linear chain) lacks real-time tracking of doses, i.e. electronic pedigree. Typically, when supply integrity practices are applied to routine supply chain functions, there is a fundamental increase in awareness of transactions and more control over inventory. The resulting operational effectiveness and efficiency gains can be allocated, in part, to investments in brand protection. Some examples of activities which generate brand-protection avoidance results are shown in sidebar 2. REPORTING/ VALIDATION PROCESS The governance of the financial scorecard results should be 48 LifeScienceLeader.com November 2013 managed by the finance/accounting department with buy-in from marketing and supply chain management. Results will be accumulated within the brand-protection team on an ongoing basis, tabulated monthly, and reported by finance/accounting quarterly to minimize reversals of entries due to premature or overzealous recording of information. To secure credibility in the use of these metrics over time, it is important to use conservative approaches for reporting results. Keep in mind that the value of "scorecarding" your brand-protection performance results lies in a) tracking macro measures of return on investment, b) showing trends in performance over time and, most importantly c) rallying the organization to become more accountable for supply integrity. In summary, encouraged by globalization of commerce, broader manufacturing footprints in high-risk markets, and the profitability of popular brands in a sluggish economy, counterfeiters are experiencing unprecedented success in falsifying prescription medicines. It is incumbent upon brand owners to incorporate brand-protection practices into their commercial strategies. It is equally important for supply chain executives to seek additional operational gains from increased transparency and control of downstream transactions. Together, these goals can be realized by selective investments in brand-protection programs and technologies. The immeasurable value of increasing patient safety notwithstanding, life science leaders should adopt objective metrics to gauge the effectiveness of investments in anticounterfeiting activities. These metrics will galvanize your organization around the value of brand-protection safeguards and help fulfill the trust mark of your brands. Your patients will thank you. A brand-protection financial scorecard is a valuable tool in your continuing efforts to fulfill your company's promise to your patients to deliver safe medicines. About the Author Ron Guido is the president of Lifecare Services, LLC, a management-consulting firm specializing in healthcare marketing, brand protection, and strategic planning. He has more than 36 years of experience in the healthcare industry and is the former vice president of brand protection at Johnson & Johnson.