IPC Breezes Through FDA Requirements With iWay

Pharmaceutical Distributor Saves $1 Million Constructing World-Class E-Pedigree System

Last year, in an effort to curb pharmaceutical drug counterfeiting, the U.S. Food and Drug Administration (FDA) announced that drug wholesalers must track the pedigree of all pharmaceutical products dispensed in retail pharmacies. For companies like IPC, the nation's largest group purchasing organization for independent pharmacies, meeting this requirement appeared to be a massive undertaking, since it meant having to maintain a detailed tracking of each bottle of drugs that passes through its warehouses – and impacting on several other key information systems.

The FDA's requirement sent the pharmaceutical industry scrambling, as companies large and small struggled to comply with the new regulations. James Blake, vice president of Information Technology at IPC, sums up the business impact. "Except for manufacturers or authorized distributors, every person involved in the wholesale distribution of drugs is now required to provide patients with a pedigree for that particular bottle, from the point of sale all the way back to the pharmaceutical manufacturer, including dates, the names of parties involved, and the addresses of the transactions," he explains.

Fortunately, IPC had a secret weapon in its technology arsenal: a complete software integration platform from iWay Software. While other pharmaceutical distributors threw expensive packaged solutions at the problem, IPC leveraged the iWay environment to meet the drug tracking requirements in complete compliance with the new FDA standards – at a fraction of the cost and well in advance of the looming deadline. "Without iWay, we might have been forced to go out of business, or do business entirely differently," says Blake. "As it turns out, we probably spent 1/100th of the time and physical investment that other companies did to meet the drug pedigree requirements."

Blake acknowledges there are packaged solutions available to handle the e-pedigree requirements, but they are expensive, inflexible, and require extensive integration work to weave them into a company's existing information systems. "By contrast, iWay is an open platform that we own and control," he states. "We made it work with the systems we already have in place, at a substantially lower cost.

Rising to the FDA Challenge

Headquartered in Sun Prairie, Wisconsin, IPC represents 3,200 primary and 2,500 affiliate pharmacy members. In addition to serving as the distribution facility for these stores, IPC processes orders, tracks rebates, negotiates bulk-purchasing agreements, and supplies sales analytics to its members.

With its new e-pedigree system in place, IPC receives electronic documents from suppliers that detail the chain of custody for its pharmaceuticals. The FDA requires IPC to append relevant information to these documents and forward them to customers. There are many different protocols involved, such as FTP and AS2, and many different routing rules for the documents. According to Jonathan Boott, IPC's director of Database Development, it was easy to translate each routing rule into an iWay rule to streamline the information workflow.

Now, when pharmaceutical wholesalers such as McKesson send product data to IPC, the drug tracking system automatically ties it to a purchase order. iWay matches the purchase order with a shipping notice, then sends back an e-mail confirmation of the transaction. After McKesson verifies that the correct manufacturer is listed, IPC updates its pharmaceutical database. Thanks to this automated business flow, IPC knows the exact pedigrees of the drugs that it has purchased before the products even arrive at the shipping dock. In turn, they are able to provide this information to their individual pharmacies, fulfilling the FDA requirement.

According to Blake, another large drug wholesaler spent $2 million on a packaged drug pedigree application, and several million dollars implementing it. "By contrast, we bought iWay for less that $100,000, then invested 14 weeks of one developer's time, and our drug-tracking system is far more flexible. We could not have done it in this timeframe without iWay."

Expanding the Investment

Captivated by iWay's flexibility and ease of use, IPC has expanded the software into many other parts of its business. "We do everything that we can with iWay," Blake says. "We initiate business processes, we receive e-mail messages from outside vendors and we update databases with the information iWay provides, such as legal documents related to drug pedigrees. iWay is an integral part of everything that happens in our business." For example, IPC uses iWay to streamline ecommerce and data interchange requirements, while ensuring secure transport of data to its business partners.

IPC is also using iWay to streamline the deployment of a new ERP system. "We rely on an IBM AS/400 legacy system, but in recent years we found ourselves overreaching the bounds of its capabilities," Boott explains. "As a result we began doing several tasks external to the AS/400, primarily using Microsoft .NET programming. We also purchased the Microsoft Dynamics AX ERP system, which we plan to implement in phases to replace the AS/400 system."

Blake explains how iWay will facilitate this gradual ERP deployment. "As transactions occur on the AS/400, we can use iWay to create XML documents, convert them to the Dynamics AX format, then route them to the new ERP system for processing," he says. "In this way, iWay will help us roll out the system one module at a time. Whenever data is entered into our legacy system, we will use iWay to automatically populate all the databases in the new ERP system."

According to Boott, because iWay has such a high-level object-oriented design process, IPC can develop new interfaces very rapidly, with little or no code. "Most of the iWay agents, adapters, and listeners behave exactly the same way, so once you learn how the software works, it's more or less plug-and-play," he explains.

IPC also created an e-commerce system that uses X12 transactions and the EPC global set. In four months they had a demonstrable product in place. Two senior iWay engineers provided on-site consulting and mentoring during this important development process. "iWay helped us speed up the traditional translations of ordinary X12/EDI transactions," says Boott. "They updated the system to address our specific industry standard."

Once again, IPC considered packaged EDI and e-commerce solutions from vendors such as Sterling Commerce, but they chose iWay because it offered more flexibility. "With iWay, we have complete control over what's going on, partly because the implementation is extremely granular," says Boott.

While other pharmaceutical companies typically face two-to-four week implementation cycles to bring new trading partners on board, IPC can now do it in a couple of days. "Thanks to iWay, we ended up with a much more flexible and resilient system," Boott adds.

Controlling Complex Business Processes

Standardizing on iWay has positioned IPC to replicate just about any process flow extremely easily. "If it's a standardized transaction set, it's surprisingly easy to do without any coding," says Blake. "We can complete integration projects that would typically cost hundreds of thousands of dollars for a fraction of that amount with iWay. It's just a matter of a few days of development."

While many companies use iWay as a universal platform for mapping dissimilar data types and facilitating efficient data interchange, IPC also relies on the software as a business process control agent. For example, whenever purchase orders are stored in the DB2 database on the AS/400 computer, iWay listens for that activity, then triggers a separate process to convey that same information to the new ERP system in the .NET environment.

Similarly, IPC plans to use iWay to control the flow of orders between its AS/400 environment and its .NET environment. When the company takes an order through its ecommerce Web site, a message will be generated by the Web server, then routed by iWay to other internal servers via Microsoft Messaging. "iWay can initiate a process to determine whether or not to submit the order to the picking system," says Blake. "iWay can also send status updates back to the Web, so customers can see that IPC has confirmed their orders and later shipped and invoiced them. It will handle all those communications packets for us."

A Prescription for Long-term Success

Boott believes iWay could yield additional cost savings down the road if IPC acquires another buying group or has to map another company's ERP system to its own. He also thinks iWay will simplify the process of incorporating radio frequency identification (RFID) identifiers into its distribution systems – which he describes as "the next shoe to drop from the FDA."

In the meantime, IPC has purchased WebFOCUS from Information Builders, iWay's sister company. They plan to use the business intelligence (BI) software to expand their operational reporting capabilities – especially once the ERP implementation picks up speed. Blake can foresee creating reports that enable users to drill down into pharmaceutical deliveries by region, as well as to provide inventory summaries to individual pharmacies. This would make it easier to identify and resolve unprocessed orders. "We see big value in creating management dashboards with WebFOCUS, as well as with delivering targeted information to our pharmacies," he notes. "WebFOCUS and iWay provide a powerful combination."

Blake speaks with confidence, reflecting on a successful deployment at a critical juncture in his company's history. While some wholesale pharmaceutical distributors deployed software packages such as Cyclone's e-pedigree system to meet the FDA's e-pedigree requirements, he knows that implementing a custom solution with iWay proved to be a much more successful and cost-effective option – with long-term benefits to the business.

"We spent about $125,000 for an unlimited-use license of iWay, and we've easily saved $1 million in development dollars in a relatively short timeframe," he concludes. "More importantly, we were able to meet federal requirements that we couldn't have met otherwise. We are running a $550 million distribution business with an IT department of six individuals and three developers. We are always stretched, so we try to make the right purchase decisions when we bring in hardware and software. Clearly, we made the right choice with iWay."