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Healthcare Value Chain: What It Is and Why It Is Important

In the healthcare sector, delayed, lost, and damaged products can cause grave danger, as patients might not receive the medicines they need on time and many items are susceptible to fluctuations in environmental conditions. That’s why it’s crucial to have a reliable and robust healthcare value chain.

Let’s examine the critical role that the healthcare value chain plays. Our technologies and solutions help pharmaceutical companies, hospitals, and other healthcare stakeholders streamline and manage their entire supply chain, from procurement to distribution.

Understanding the healthcare value chain

Most may believe that the value chain and supply chain are synonymous. However, they are two different terms describing different aspects of supply logistics. The supply chain refers to the movement of goods from suppliers to customers; the value chain encompasses all activities involved in creating and delivering a product or service.

In other words, the supply chain is more about the physical movement of goods and the value chain adds value to a product, including production, marketing, and customer support after the sale. So, the healthcare value chain allows medical institutions to provide patients with the best possible care by ensuring they have the supplies and treatments they need when they need them.

What happens in a healthcare value chain?

Understanding the activities involved in the healthcare value chain is the first step in managing and streamlining its processes. We’re talking about logistics, operations, marketing and sales, and service.

Inbound logistics. The value chain is not a product-driven process, so explaining inbound logistics can be challenging. Generally, inbound logistics in a value chain refers to the quality of inventory and the management of that inventory. Value-driven inbound logistics ensures that all inventory is accounted for and is of the highest quality. This includes checking that items are not expired or damaged and meet all necessary requirements (e.g., internal quality control, standard operating procedures).

Operations. The operations stage of the healthcare value chain is where the actual product or service is produced. In this value-driven scenario, product operations and/or manufacturing aim to reduce waste and create efficiencies. This might involve automating processes, changing production methods, and improving the quality of raw materials. In healthcare, the goal of operations might be to streamline the manufacturing of drugs or medical devices.

Outbound logistics. Like inbound logistics, outbound logistics in a value chain should strive to ensure that a product or service reaches the customer in the best possible condition and in a timely manner. In healthcare, this means making sure that patients receive their supplies and treatments when they need them, as well as ensuring products are safe and legitimate.

It’s also important to note that outbound logistics isn’t just about the distribution of supplies outside a warehouse. It also concerns how medical institutions distribute supplies internally. This is important to consider when managing a hospital or other medical facility.

Marketing and sales. Marketing and sales in the healthcare value chain focus on creating demand for a product or service. Traditionally, this includes advertising, promotions, and other marketing initiatives. In a value-driven context, marketing and sales are strategically designed to go beyond a one-time sale to create long-term relationships with customers. There are numerous ways to do this, ranging from creating educational materials for patients and promoting online services to partnering with insurance providers.

Service. The service stage of the healthcare value chain is where post-sales activities occur, such as continuing customer support, repairs, and maintenance. Value-driven service helps maintain customer satisfaction with the product or service and helps ensure their needs are being met. Customer loyalty programs, follow-up communications, and offering extended warranties are common examples.

The healthcare value chain in numbers

Now that we’ve summarized the different stages of the healthcare value chain, let’s look at some numbers that help illustrate why these processes are so vital to the healthcare industry.

One 2019 report found that clinicians devote about 17 percent of their time to logistics and storage management activities. This affects their productivity and the quality of care they can provide.

The report also found that more than 4,500 different medical devices and products are recalled every year — and 10 percent of these have the potential to cause harm or death. One study published by the well-known consulting outfit McKinsey & Company reported that the “costs of a single non-routine quality event, like a major recall, have been as high as $600 [million] in medical device companies.”

The long-term business benefits of an effective healthcare value chain

An effective healthcare value chain creates benefits beyond improving quality of care and securing patient safety and satisfaction. It creates business benefits, including:

Improved profitability. An effective healthcare value chain can boost a bottom line by improving supply systems, reducing waste, and creating efficiencies across healthcare systems.

Promoting innovation. Less waste and more efficient systems mean savvy companies can devote more resources to R&D that can lead to innovation in all realms, including the development of new treatments or therapies and better manufacturing and distribution schemes.

Helping meet business goals. An effective healthcare value chain contributes to business success by reducing waste, increasing efficiencies, and promoting innovation. It also helps businesses connect with customers and build brand loyalty.

Final thoughts

What’s the main takeaway from this overview of the healthcare value chain? Establishing an agile and robust value chain is essential to success in the healthcare industry — in every industry.

We’ve specialized in creating software solutions for the healthcare value chain (and the healthcare supply chain) for almost 20 years. Our No. 1 priority is to help businesses optimize their operations and improve the quality of the products they manufacture and deliver to consumers.

For the healthcare and pharmaceutical industries, this means providing a digital traceability platform that helps ensure your devices and medications are safe, are transported following proper protocols (e.g., routes and environmental parameters), are delivered on time, and meet all regulatory requirements. It means real-time data and visibility into every aspect of your operations from virtually any location in the world.

rfxcel and Antares Vision Group understand the healthcare value chain, its complexities, and how to optimize it for patient security, customer satisfaction, and business success. Contact us today to schedule a short demo of our solutions. Our experts will answer your questions and show you why major global healthcare and pharmaceutical companies rely on our technology to secure and improve their operations.

Brazil ANVISA Update: Manufacturers, Distributors, and Dispensers Must Meet April 2022 Serialization Deadline

The Brazilian Health Regulatory Agency (ANVISA) has approved its final Normative Instruction (NI 100), meaning the April 28, 2022, deadline for meeting serialization, reporting, and traceability requirements is officially set in stone. Let’s take a look at what supply chain stakeholders can expect with Brazil ANVISA when the law goes into effect just six months from now.

Key Brazil ANVISA requirements for April 28, 2022

The pharma industry has been aware of the Brazil ANVISA requirements since December 2016, when the National Medicine Control System (SNCM) was signed into law (Law No. 13.410/2016), establishing serialization requirements and timelines for Brazil’s pharmaceutical supply chain.

There are three key requirements for April 2022:

  1. All prescription medicines must be serialized.
  2. All manufacturers and importers must have a “serialization plan” in the SNCM portal.
  3. All supply chain stakeholders must submit product event reports to the SNCM.

To meet serialization requirements, all products must have a GS1 2D Data Matrix barcode that houses a Global Trade Item Number (GTIN), a 13-digit ANVISA Medicine Registry Number, a unique 13-digit serial number, an expiration date (in the MM/YY format for human-readable form), and a lot/batch number (up to 20 alphanumeric characters).

The ANVISA Medicine Registry Number, serial number, expiration date, and lot/batch number make up the Unique Medicine Identifier (Identificador Único de Medicamentos), or IUM, which must be printed on every product. Compliant labeling might look something like this:


For their serialization plans in the SNCM portal, manufacturers and importers must provide information about their relevant product lines and medicines. Furthermore, manufacturers must submit a serialization plan that includes all steps and actions they will take to become compliant by April 2022.

Final thoughts

What’s the most important takeaway for Brazil ANVISA? The clock is ticking and you have to be prepared. You should be coordinating with your supply chain partners. You should be registering your products with ANVISA. You should have access to the SNCM portal and be uploading the required reporting data.

You should also register for our “SNCM-ANVISA Serialization and Traceability Compliance” webinar on Wednesday, Nov. 17, 8:30 – 9:15 a.m. Eastern Time. Thiago Alegreti, director of our Latin American operations, will discuss the latest SNCM updates and let you know what you need to be doing to be ready for April 2022.

rfxcel has fine-tuned our traceability software to help manufacturers operating in the Brazilian market comply with the SNCM requirements, and we have an experienced team on the ground in Brazil that can help make sure you’re ready for the regulations. Register for the webinar and contact us today if you have any questions or want more information.

Russia Pharma Serialization Update: “Notification Mode” Expedites Product Circulation

Russia pharma serialization has been underway for a little more than three years. The country’s National Track and Trace Digital System, which is known as Chestny ZNAK and covers a dozen industries, has been continually tweaked and refined since it was created a little more than three years ago.

Some important updates to Russia pharma serialization were made public toward the end of 2020. Here’s a quick rundown of what the government announced.

“Notification mode” will simplify Russia pharma serialization processes

As we noted last year, Russia’s Drug Circulation Monitoring System (MDLP) was compelled to develop new reporting requirements after technical problems created serious issues in the pharma supply chain.

In late October, the MDLP moved into so-called “notification mode” to help supply chain actors continue importing, distributing, and selling medicines in the event of errors or failures in Chestny ZNAK’s reporting system. This applied to over-the-counter and prescription medicines manufactured in Russia or imported into the country, including from the Eurasian Economic Union (EAEU).

Then, in early November, Decree 1779, “On Amendments to the Regulation on the Monitoring System for the Movement of Medicines for Medical Use,” consolidated measures to simplify and expedite reporting. This is why notification mode has also been referred to as “simplification mode” for Russia pharma serialization.

In essence, stakeholders can proceed with distribution or dispensing 15 minutes after they submit the required product information to the Government Information System for Marking (GIS MT), which catalogs all marked goods, even if they do not receive confirmation that the information has been accepted/approved in the system. (The “product information” pertains to Russia pharma serialization requirements, such as serial numbers and Global Trade Item Numbers.) The decree also simplifies importation, giving custom officials a 2-hour window to request product information.

For now, these Russia pharma serialization rules are to remain in effect until July 1, 2021. After that, notification mode will stop.

Final thoughts

As the leader in Russia pharma serialization, rfxcel knows the regulations are stringent and challenging. To help, we offer useful resources online, like this refresher course and white papers and webinars that explain the regulations in easy-to-understand language.

These are great places to start, but the best way to ensure you’re prepared to comply with Russia pharma serialization laws is to talk with us directly. Consider our credentials:

  • We’re an official integration, software, and tested solution partner with the CRPT.
  • We’ve demonstrated that our solutions, including our signature rfxcel Traceability System (rTS) and Compliance Management (rCM), can meet the stringent Russia pharma serialization requirements and ensure you stay compliant.
  • rTS works seamlessly with Chestny ZNAK, including a Russian-language user interface that makes integration and startup much quicker.
  • We’ve prepared for Russia pharma serialization and Chestny ZNAK since 2018.
  • We’re one of the few providers with active pharma implementations in Russia.
  • We’ve tripled our workforce in Russia over the last year. Our team in Moscow provides our clients, which include major global pharmaceutical and consumer goods companies, the quickest time to market while fully automating their compliance reporting.

Contact us today learn more about how we can help you with Russia pharma serialization and Chestny ZNAK compliance. No matter how far along you are in your preparations to comply, you should talk to us — even if you’re already working with another provider. Our powerful software ensures you’ll be prepared and always be compliant with Russia’s complex regulations.