Indian Institute of Technology, Gandhinagar

Internship Report
Summer -2014
A Project Report On:

Development of a Decision Support System for a

Pharma Supply Chain using the case study of a
Drug Product

Guided By: Submitted By:

Dr. Iskandar Halim Ayush Choudhary

ICES, Astar IIT-Gandhinagar

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 Acknowledgement

In my tenure of 50 days at ICES, I have had a very fruitful learning experience and have learned
many new concepts. This internship has enabled me to enhance my knowledge and experience.
This would not have been possible without the support of my mentor and colleagues.

I take this opportunity to thank my mentor Dr. Iskandar Halim who gave me a chance to work on
problem related to supply chain and guided me throughout my attachment, encouraged me and
shared his knowledge.

I would also like to express my gratitude for Mr. Arief Adhitya and Ms. Low Ying Siew for their
valuable time and valuable feedback that helped me to carry out the project work.

I am also thankful to all the employees and colleagues at ICES who helped me directly or
indirectly and aided to my learning. Further, I would thank my institute IIT-Gandhinagar for
giving me this opportunity to learn. The experience and knowledge gained here will surely help
me in the long run.

Ayush Choudhary

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 Contents

1) Introduction4
2) Literature review5
3) Supply Chain Network9
4) Modeling in Excel13
5) Results and Conclusions.30
6) References31
7) Appendix32

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 1) Introduction
Any industry, whether small or big, entails with itself multiple stages in the process of an end
product reaching the market. These stages involve suppliers, manufacturing units, distribution
centers, warehouses and stores before the final product reaches customers. Supply Chain
Management (SCM) refers to approaches that are used to ensure that all the functions throughout
this value chain are carried efficiently. It tries to ensure that the raw materials are procured
timely and that the manufactured products fulfill the demand duly.

Every entity in a supply chain is linked to some other entity and these entities either source
something from an upstream source and/or supply something to a downstream destination. The
most downstream unit of the supply chain generates a demand and this demand in turn is
converted to orders that are placed for manufacturing which in turn generates demand for raw
material supply. In response to this the raw materials are supplied by the suppliers to the
manufacturing unit which then makes the appropriate quantity of product which is then
transported to the place of demand. Thus there is a demand generated pull that drives the entire
chain.

These pull driven requirements have to be fulfilled at various points in the chain to avoid
bottlenecks and this is where inventory becomes important. Thus the main motive of a supply
chain model is to control the inventory at various sites and thus satisfy the customer
requirements. To achieve this, effective and efficient facility and capacity allocation is necessary.
Before setting up a supply chain with distribution centers and warehouses in several markets,
decisions have to be made to answer the questions such as where should the plant be located?
How much should the plant produce? Which distribution centers will the plant supply to? How
will the flow be allocated? And all these decisions have to be made while trying to minimize the
costs and/or maximizing the profits for the company. We try to answer these questions given the
demand and the operational manufacturing and shipping costs for the product.

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 2) Literature Review
End to End Pharmaceutical Supply Chains:

In a pharmaceutical industry the supply chain needs to be developed sufficiently early during the
development stage of a drug product due to regulations and the design parameters for the chain
have to be decided long before the drug is launched. Thus the performance of a pharma SC is
constrained by the parameters that have been decided quite some time before the drug actually
enters the market.

A Pharma Supply Chain differs from usual SCs in that it is highly regulated and it has to pass
through extensive requirements and regulations to prove that the product is effective and safe.

A typical Pharma Supply Chain looks like [1]:

Manufacturing

API Plant
Raw Material
Supplier

Primary Secondary
Packaging Packaging

Final Dosage

Hospitals
Warehouses Distribution
Retail Shops
Centers (DCs)
Patients

Demand Feedback

Figure-1: End-to-End Pharma Supply Chain

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The aim of this project is to establish the understanding of the principles behind the supply chain
decisions. To achieve this we use an existing drug product as a case study and try to map its
supply chain by identifying the various sites such as the API plants, DCs, Packaging, Suppliers
etc. We choose the case of the drug Paclitaxel and choose the company Teva Pharmaceuticals
Ltd. to carry out the analysis based on the amount of information available.

Paclitaxel Injection:

Paclitaxel is an anti-neoplastic anti-cancer drug. It is obtained by a semi-synthetic process from

an intermediate which is extracted from the leaves and twigs of English Yew (Taxus Baccata). It
is administered in the form of an intravenous solution.

Paclitaxel manufacturing starts with the extraction of the intermediate 10-DAB (10-des-acetyl
baccatin III) from the Taxus Baccata leaves. For the extraction the yew leaves are combined with
solvents and subjected to several extraction processes to finally get a concentrated solution of 10-
DAB. The yields for the intermediate are about 1g/kg of yew needles. The 10-DAB molecule
forms only a part of the Paclitaxel molecule and has to go through further coupling reaction with
another molecule Beta Lactam to produce the final product Paclitaxel which is the Active
Pharmaceutical Ingredient (API) for the Paclitaxel injection [2].

Beta Lactam 10-DAB

Paclitaxel

Figure-2: Paclitaxel Structure

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In the Paclitaxel injection supply chain, the first step is the Raw Material suppliers which supply
the raw materials like yew needles, beta lactam, solvents and chemicals to the API
manufacturing sites (primary manufacturing). After this the API is manufactured in batches and
sent for the next step of secondary manufacturing in which excipients are added to the bulk
Paclitaxel to dilute it to the required concentration of 6mg/mL with 527 mg of purified
Cremophor EL (polyoxyethylated castor oil), 2 mg citric acid anhydrous and 48.7% (v/v)
dehydrated alcohol to produce the end product.[3] After this end product is manufactured the
injection solution is primary packaged in multi-dose glass vials (glass, polypropylene) depending
on the dosage forms and then packaged in cartons which are packed in bigger boxes with
appropriate cushioning.[3] All this process from API to Packaging may take place at the same
site or may be carried out at different sites or contract manufactured. The boxes containing the
small vial packages are then shipped to distribution centers across the world and are distributed
from there to the warehouses and whole sellers which make the product available to the patients.

The Paclitaxel injection comes in 4 dosages, 30mg (5mL), 100mg (16.7mL), 150mg (25mL) &
300mg (50mL). It is a clear colorless to slightly yellow viscous solution and is supplied in the
form of a non-aqueous solution which is diluted in appropriate amounts of dextrose and brine
water before infused. Each dosage of Paclitaxel has a concentration of 6mg/mL and has other
excipients added to it.[3]

Paclitaxel is one of the most important cancer drugs and is used to treat ovarian cancer, breast
cancer and AIDS related Sarcoma. Several precautions need to be taken before the drug is
administered and patients have to be pre-medicated to avoid side effects.[3]

Paclitaxel is stable when stored in the temperature range of 20-25C and isnt affected adversely
by freezing or refrigeration. It is packed in a primary packaging of multi-dose glass vials which
are then packed individually in a secondary carton with 1 vial per carton.[3]

Bulk Paclitaxel drug market in 2000 was about $1.5 billion and in 2011 was estimated to be
about $4.5 billion with a selling price of $4, 00,000 per kg. US markets sale was approximately
$46 million in injectable Paclitaxel. These figures tell us about the importance of Paclitaxel
among the anti-cancer drugs. [4] [5]

Teva Pharmaceuticals:

Teva is an international pharmaceutical company based in Israel and specializes in the

production, development and marketing of several specialty medicines, generic and OTC drugs,
and Active Pharmaceutical Ingredients. It is one of the top 15 pharma companies of the world
and operated in about 60 countries. Teva has 52 operating plants with 21 sites manufacturing
APIs. Teva has an overall market share of 18% in the USA making it the top pharma company
there and globally accounts for more than 16% of the generic prescriptions with about 400
generic drugs in a number of dosages, formulations and packs. [6] [7]

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In 2011 Teva sales were $18.3 billion with a net income of $4.43 million and with Teva having a
market share of 4% in the injectables, we can estimate Teva Paclitaxel Injection sale to be $1.84
million in USA.[6] [7] [8]

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 3) Supply Chain Network
To understand the principles behind SC decisions, the drug product Paclitaxel Injection has been
chosen as the case study due to the availability of a manufacturing reference for the same. We
chose the drug product by the company Teva Pharmaceuticals and have tried to map its supply
chain by tracing Teva sites that manufacture, distribute, package or market the drug product. For
this data has been aggregated on the various API plants, suppliers, Distribution Centers,
packaging and demand of the product.

Teva has around 52 plants and it was not explicitly mentioned anywhere regarding which plants
produce the Paclitaxel API, which manufacture the complete product or which package the
product or market it. However, we have identified 8 probable API plants by the information that
has been mentioned on the companys main and other websites for different countries. We have
also identified the potential suppliers for the various raw materials required for the
manufacturing of the API. [9] For this we first collected the information about the chemicals that
are required through the manufacturing information and then searched for the suppliers that
supply those products and are in the same continent or areas to the API plant locations. Thus
these are potential suppliers and no conformity is there on them supplying to Teva. There are a
total of 16 Raw Materials and 3 excipients (secondary substances).

There are various distribution centers that have been mentioned on Teva website but we dont
know whether each one of them supplies Paclitaxel. Researching on them through the internet
we got 6 DCs that probably supply Paclitaxel Injection by Teva.

For the packaging and secondary manufacturing we could not get any information whether the
API plants just manufacture the API or the complete products. We only have some information
regarding packaging at 2 sites that may pack Paclitaxel Injection.

To summarize, we have the data about 8 APIs (probable), all raw material suppliers (potential), 2
possible packaging sites and 6 DCs. The information on these has been provided in the Appendix
Tables.

The sites have been mapped on the world map by geo-coding the addresses to Latitudes and
Longitudes. (Refer to Figure-3)

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 a)

b)

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 c)

d)

Figure-3: a) Map of APIs b) Map of DCs c) Map of APIs and DCs d) Link of APIs to
DCs (Possible)

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As we can see from the maps, 7 out of 8 probable API sites are located in Europe and one in
Argentina; all 6 DCs are located in USA. The two possible packaging sites are also located in
Europe (Ireland and UK; not mapped). Thus, the suppliers that were considered were taken
mostly based in Europe for the common raw materials and in other countries for rarer materials.
The entire list of Suppliers and other sites can be found in Excel file Teva_Sites.

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 4) Modeling in Excel
We try to build up a model of the supply chain of Teva Paclitaxel Injection based on the
available information in USA and make some assumptions to solve a capacity allocation problem
using the Excel Solver and have optimized the flow of drugs so as to minimize the costs.

Assumptions:

a) All the API plants are considered as manufacturing units that manufacture end product
(along with packaging). We consider 7 out of the 9 plants leaving 2 out of the 3 plants in
Italy.
b) We consider 7 locations for warehouses in USA. The warehouses considered in USA are
that of the companies AmeriSource Bergen, McKesson and Cardinal Health which
combined together hold about 90% market share among pharmaceutical whole sellers in
USA.[10]
c) We calculate the demand for the Paclitaxel injection in USA based on the annual sales of
Paclitaxel in USA a 4% share of Teva in injectables.[8]
d) The shipping costs to ship one big box of small vial cartons are calculated taking up a
straight line distance between the sites.[Table A4, A5]

The list of manufacturing units, DCs and Warehouses considered for this model are given in
Table 1, 2, 3.

Site Postal
Site Name Site Country Site City Code
Ivax Argentina Buenos Aires B1606
Teva Czech Czech Republic Beroun 74770
Teva Godollo Hungary Godollo 2100
Teva Caronno Italy Caronno Pertusella 21042
Teva Santhia Italy Santhi 13048
Sicor Biotech Lithuania Vilnius 2241
Teva B.V Netherlands Haarlem 2031

Table-1: Manufacturing Sites

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 Distributors_USA City State Postal Code
Amatheon Inc Miami FL 33155
BDI Pharma, Inc Columbia SC 29203
CVS Pharmacy Inc Woonsocket RI 02895
West Des
Hy-Vee Inc Moines IA 50265
Prime Therapeutics Llc Eagan MN 55121
Rite Aid Corporation Camp Hill PA 17011

Table-2: Distribution Centers

Warehouse_USA City State Postal Code

AmeriSource_Illinois Chicago IL 60601
AmeriSource_Texas Houston TX 77478
AmeriSource_NewJersey Thorafare NJ 8086
Cardinal_Nebraska Omaha NE 68117
Cardinal_Newyork Montgomery NY 64120
McKesson_Virginia Richmond VA 23228
McKesson_California Chino CA 91761

Table-3: Warehouses

Packaging:

The Paclitaxel Injection comes in 4 different size packages (for 4 dosages). [11] Each package
has a multi-dose glass vial as primary packaging and a carton as the secondary packaging. The
cartons differ in volume for each dosage form and are then further packed in a big box.[12] The
dimension for the carton and the big box are given (in Table-4) along with the no. of glass vial
bottles that will be accommodated for each type in the big box with clearance for cushioning.
The no. of bottles have been assumed such that the big box weight will weigh the same (7kg) for
all types and any spaces left will be filled by cushioning. This facilitates the calculation of the
Shipment cost per box as the freight class remains the same for each box.

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Vial of Dimensions of small Volume Big Box No. of vials in Weight of
carton of small Volume 1 big box box
carton (mL)
(mL) (approx.)
Pac_30mg(10mL) 28mmx28mmx58mm 45.47 5000 100 7kg
Pac_100mg(20mL) 32mmx32mmx67mm 68.61 5000 50 7kg
Pac_150mg(25mL) 35mmx35mmx75 mm 85.75 5000 40 7kg
Pac_300mg(50mL) 45mmx45mmx80mm 162 5000 20 7kg

Table-4: Packaging

Demand Allocation:

The demand for Paclitaxel injection in USA is calculated as follows:

Annual sale in USA, 2011 = $46 million

Share of Teva in injectables = 4%
Therefore,
Annual Sale of Teva Paclitaxel Injection = $1.84 million
We have the unit price of each Paclitaxel injection for different dosages (Table-5). [13] Based on
it the percentage demand for each Paclitaxel dosage has been allocated. The warehouse wise
allocation of demand is given in Table-6.

Share in total sales No. of Vials

Price/unit (Assumed %) (approx. Total
Fill Volume Concentration (1 vial) Weight Demand)

5mL 6mg/mL $54 30 mg 40 13600

16.7mL 6mg/mL $180 100mg 30 3100

25mL 6mg/mL $271 150mg 15 1020

50mL 6mg/mL $542 300mg 15 510

Table-5: Demand Allocation

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 Demand AmeriSo AmeriSou AmeriSouce Cardinal_ Cardinal_ McKesson McKesso Total
(No. of uce_Illin ce_Texas _NewJersey Nebraska Newyork _Virginia n_Califor
bottles) ois nia
Pac_30mg 2200 2500 1525 1825 1525 1525 2500 13600
Pac_100m 600 600 325 325 325 325 600 3100
g
Pac_150m 200 150 130 130 130 130 150 1020
g
Pac_300m 60 90 50 80 70 70 90 510
g

Table-6: Warehouse wise allocation of Demand

Freight Rates/Shipment Costs:

Since the quantities of the Paclitaxel injection are very low and its a critical product that must
reach the destinations on time, we assume that it is being transported using Air freight.
We also assume that the air freight rates per km per box are same throughout between all
combination of source and destination (due to lack of proper data on freight rates).

From [14],
Air freight Weight Charge from Singapore to Europe (per 100g) = USD 0.84
Air freight Surcharge (per 100g) = USD 0.16
we assume base charge = $ 0
Distance between Singapore to Europe (Assuming it UK) = 11000km
for 7 kg, the rate is = 70*0.16+70*0.84 = USD 70
=> rate per km per box = USD 0.0064/km/box

The costs for MFG-to-DC are then calculated by multiplying the straight line distance between
the destinations with the rate to find costs per box. (Table-7)

For the transport between the DCs to Warehouses, It will be done through Truck freight.

[15]Mentions Air transport is 5 times more than truck transport

Assuming this, Rate of truck transport per km per box = USD 0.00128/km/box

Based on this the cost for transport between DCs to Warehouse is calculated by multiplying the
rate with straight line distance to get costs per box. (Table-8) [Table A4-A5]

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 Cost in DC_Amatheo DC_BDI DC_CVS DC_Hy-Vee DC_Prime DC_Rite Aid
USD n Inc Pharma, Inc Pharmacy Inc Therapeutic Corporation
($/box) Inc s Llc
MFG_Ivax 33 37 40 43 44 40
MFG_Sicor 40 37 31 37 35 33
Biotech
MFG_Teva 35 32 26 32 31 28
B.V
MFG_Teva 37 34 29 36 34 31
Caronno
MFG_Teva 38 35 29 36 34 32
Czech
MFG_Teva 40 37 31 38 36 34
Godollo
MFG_Teva 37 34 29 36 34 31
Santhia

Table-7: Shipment Costs MFGs to DCs (Air)

Cost WH_Ameri WH_AmeriS WH_Ame WH_Cardi WH_Cardi WH_McKe WH_McK

($/box) Souce_Illin ouce_NewJe riSouce_T nal_Nebr nal_Newy sson_Calif esson_Vir
ois rsey exas aska ork ornia ginia
DC_Amat 1.8 1.5 1.5 2.1 1.6 3.4 1.3
heon Inc
DC_BDI 1.0 0.8 1.4 1.4 0.9 3.1 0.5
Pharma,
Inc
DC_CVS 1.2 0.4 2.4 1.9 0.2 3.8 0.7
Pharmacy
Inc
DC_Hy- 0.5 1.5 1.2 0.2 1.5 2.1 1.4
Vee Inc
DC_Prime 0.5 1.5 1.6 0.4 1.5 2.2 1.4
Therapeut
ics Llc
DC_Rite 0.9 0.1 1.9 1.5 0.2 3.4 0.3
Aid
Corporati
on

Table 8: Shipment Costs DCs to WHs (truck)

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Capacity of MFGs:

All the MFG sites have been assumed to be same kind of plants and thus their maximum
capacity to produce any dosage is equal. The maximum capacity for each dosage of Paclitaxel
injection in terms of number of big boxes is given in Table-9.

Max. Pac_30mg Pac_100mg Pac_150mg Pac_300mg

Capacities
(#boxes)
Ivax 25 15 8 6
Teva 25 15 8 6
Czech
Teva 25 15 8 6
Godollo
Teva 25 15 8 6
Caronno
Teva 25 15 8 6
Santhia
Sicor 25 15 8 6
Biotech
Teva B.V 25 15 8 6

Table-9: Maximum Capacity

Mathematical Formulation and Constraints:

The objective is to find the optimized flow of Paclitaxel Injection boxes between MFG to DC
and then from DC to WH so that the total shipment cost for each dosage is minimized.

The Problem is (notations explained in Table-10):

Objective:

Constraints: (Demand should be met)

(Total Amount by a MFG less than equal to max. capacity)

(total received by DCs must be equal to total supplied)

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 Notation Denotes
m No. of manufacturing sites
n No. of distribution Centers
o No. of warehouses
i the ith mfg. site
j the jth DC
k the kth warehouse
Mi max. capacity of a mfg. site
dk Demand at kth warehouse
Cij Cost of shipping 1 box from ith MFG to
jth DC
Cjk Cost of shipping 1 box from jth DC to kth
WH
xij No. of boxes being shipped from ith MFG
to jth DC (decision variable)
xjk No. of boxes being shipped from jth DC
to kth WH (decision variable)

Table-10: Notations used

The optimization problem was solved using the Excel Solver tool. The detailed tool use can be
seen in the Teva_Optimization Excel file.

The results for each dosage after the optimization have been summarized below giving the
minimum costs of transportation incurred. The data for final optimized flow is given in the
appendix [Table A6-A13] .

Dosage Optimum Cost Optimum Total

MFG to DC ($) Cost DC to Optimum
WH ($) Shipment Cost
($)
pac_30mg 4142.0 181.3 4323.3
pac_100mg 1770.0 80.4 1850.4
pac_150mg 788.1 37.1 825.2
pac_300mg 748.6 33.4 782.0

Table-11: Optimized Costs

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 a) MFG sites (Model)

West Des Moines, IA (Hy-Vee)

Eagan, MN (Prime)

Woonsocket, RI (CVS)

Camp Hill, PA (Rite aid)

Columbia, SC (BDI)

Miami, FL (Amatheon)

b) DCs (Model)

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 c) Warehouses (Model)

d) All sites (Model)

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 e) All Possible Flows MFGs to DCs (Model)

f) All Possible Flows DCs to WHs (Model)

Figure-4: Unoptimized Model showing different site (a to f)

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Optimized Maps:

Figure-4 gives the Unoptimized version of the model and how the network looks before
optimization with all possible flows.

After carrying out the optimization, how the flow between different sites will look like and
among which sites the transfers will occur can be seen in Figure-6. The quantitative details of the
same can be found in Appendix.

The notations in the figure can be interpreted as follows:

Symbol Meaning

Manufacturing Site

Warehouse

Distribution Center

Supplies to

Sources From

Makes the product

Table-12: Symbols Used

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 a) Pac_30 mg Optimized flow

b) Pac_30 mg Optimized Flow on Map

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 c) Pac_100mg Optimized Flow

d) Pac_100 mg Optimized Flow Map

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 e) Pac_150mg Optimized Flow

f) Pac_150mg Optimized Flow

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 g) Pac_300mg Optimized Flow

h) Pac_300mg Optimized Flow Map

Figure-5: Optimized flows for different dosages (a to f)

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Raw Material and Excipients Cost (Fixed):

There are 16 main raw materials and 3 excipients required for bulk Paclitaxel production [2] [3].
A supplier for each raw material is chosen and then the amount of raw material required for
manufacture of one gram of pure Paclitaxel is determined and then the amount required to be
sent to each of the 7 manufacturing sites is calculated. Similarly, amount of Excipients is
calculated.

It is assumed that the suppliers for each raw material are fixed for the company and that same
suppliers supply to all of the 7 manufacturing sites.

Shipment costs:

The shipment costs are calculated assuming transport by truck freight and assuming the same per
km per kg rate as assumed for the shipping of Paclitaxel Boxes from DCs to Warehouse.[14][15]
Thus, the cost per km per kg = USD 0.00018 per kg per km

The costs corresponding to each raw material supplier are calculated by multiplying the distances
and amount with the rate. [2]

The Total Raw material cost and Total Excipients Cost (for manufacturing all 4 types of dosages
of Paclitaxel) are given in Table-13. The list of all raw materials and Excipients is provided in
Appendix [Table A14, A15, A16, A17]. The detailed calculations can be found in Excel file
Teva_Supplier_Shipment_Costs

Total Raw material Costs (Fixed) ($) Total Excipients Costs (Fixed) ($)
103764.4761 63.2

Table-13: Shipment Costs for Raw Material and Excipients

Thus,

Total Shipment costs for supplying = 103764.5+63.2 = $ 103827.7

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Net Optimized Cost of Transportation from Suppliers to Warehouses:

For all the 4 dosages combined, the net shipment cost for flow from:

Suppliers -> MFGs -> DCs -> Warehouses

Is,

Net Shipment cost

= Opti (Pac_30mg) + Opti (Pac_100mg) + Opti (Pac_150mg) + Opti (Pac_300mg) + Fixed Cost

= 4323.3 + 1850.4 + 825.2 + 782.0 + 103827.7

= $ 111608.6

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 5) Results and Conclusions

The Optimized Shipment Cost for Pac_30 mg is $4323.2, Pac_100mg is $1850.4,

Pac_150mg is $825.2 and Pac_300mg is $782.
The optimum costs imply that they are the minimum shipment costs achieved through for
the given model and demand and any other flow of product will lead to higher costs than
these.
The optimum costs are decreasing with the Dosage increase. This is because the demand
for higher dosages (assumed) is very less as compared to that of Pac_30mg dose. Since
more boxes have to be transported for Pac_30mg so the cost goes up compared to other
dosages.
From Figure- 5 a to f, we can observe that the manufacturing site Sicor Biotech (Vilnius,
Lithuania ) is not used to supply any of the dosages in the optimized scenario. This means
that the plant is not required for the supply of Paclitaxel injection to the US market for
the given model. Thus. It can be removed without affecting the supply chain and if only
US market is considered then there will be no requirement to open this plant.
Similarly, we can observe that Distribution Center at BDI Pharma is not functional for all
the four dosages. This means that the DC at BDI Pharma (Columbia, SC) is not required
in the supply chain for this model to supply to US market warehouses.
We can observe from the optimized flow maps that DC at CVS Pharmacy (Wood Socket,
RI) has maximum product flow passing through it. Through this we can say that if the
demand of the product increases, then more products would be supplied through this DC
and it is a more strategic location compared to other DCs.
The Net Shipment costs are 6.1% of the total sales revenue of the company ($1.84
million) which seems to be a reasonable cost for shipment, with other costs being the cost
of raw material, facility costs, labor costs, operating costs etc.
The model was solved using the Excel Solver. The results of costs need to be verified
using other algorithms or equation solvers.
The unit transportation costs (per km per box) used is taken to be the same between
different sites. More accurate costs can be calculated if we can get exact air and truck
freight rates for all the routes.
The model can further be improved if we know exactly how the packaging is done and
what size big boxes are used. The information about distribution of different dosages in
the total demand will also make the model more accurate.

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 6) References
[1] Rees, Hedley; Supply Chain Management in the Drug Industry: Delivering Patient Value for
Pharmaceuticals and Biologics, Pg. 73-77, John Wiley & Sons, 2011

[2] Patel, Nirav; Stewart Shaena; Commercial Production of Anti-Cancer Agent Paclitaxel,
International Process Design Competition, 2007.

[3] PACLITAXEL injection, solution.<http://dailymed.nlm.nih.gov>

[4] Production of Paclitaxel will enter a new stage in three years, <http://iflast.blogspot.sg>

[5] Sagent Pharmaceuticals Launches Paclitaxel Injection, USP,

< http://investor.sagentpharma.com>

[6] Teva Overview, < http://www.tevapharm.com>

[7] < www.tevagenerics.com/>

[8] Ducker John; Product Segments, IV Drugs, Fresenius Kabi, 2012

< https://www.fresenius.com/movies/06_CMD_2012_IV_Drugs.pdf>

[9] < http://www.tevapharm.com/Pages/Teva-Worldwide.aspx>

[10] Cardinal is one of the most powerful players within the pharmaceutical supply chain.
<http://analysisreport.morningstar.com>

[11]Paclitaxel Injection, < http://www.tevagenerics.com >

[12]< http://ivpacks.com/index.php?main_page=index&cPath=69 >

[13] < http://www.pharmacy.gov.my/v2/en/apps/drug-price >

[14] <http://www.vpost.com.sg/our-services/shipping-rates>

[15] Air Freight: A Market Study with Implications for Landlocked Countries, The World
Bank Group; Aug 2009

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 7) Appendix

Site Postal
S.No. SiteName SiteCountry SiteCity Code
1 Ivax Argentina Buenos Aires B1606
2 Teva Czech Czech Republic Beroun 74770
3 Teva Godollo Hungary Godollo 2100
Caronno
4 Teva Caronno Italy Pertusella 21042
5 Teva Santhi Italy Santhi 13048
6 Sicor Biotech Lithuania Vilnius 2241
7 Teva B.V Netherlands Haarlem 2031
8 Teva Rho Italy Rho 20017

Table A1: API Sites (Actual)

Postal
S.No. Distributors (known) City State Code
1 Amatheon Inc Miami FL 33155
2 BDI Pharma, Inc Columbia SC 29203
3 CVS Pharmacy Inc Woonsocket RI 2895
West Des
4 Hy-Vee Inc Moines IA 50265
Prime Therapeutics
5 Llc Eagan MN 55121
6 Rite Aid Corporation Camp Hill PA 17011
7 Walmart Bentonville AR 72712

Table A2: DC Sites (Actual)

Packaging Postal
S.No. Sites Country City Code
1 Teva UK UK Eastbourne BN229AG
2 Teva Ireland Ireland Waterford

Table A3: Packaging Sites (Actual)

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 DC_Amathe DC_BDI DC_CVS DC_Hy-Vee DC_Prime DC_Rite Aid
on Inc Pharma, Inc Pharmacy Inc Therapeutics Corporation
Inc Llc
MFG_Ivax 5159.73 5810.4 6269.4 6694.1 6910.86 6206.67
MFG_Sicor 6274.72 5754.49 4875.58 5709.64 5468.4 5197.5
Biotech
MFG_Teva 5407.72 4946.8 4066.6 5066.15 4850.39 4409.7
B.V
MFG_Teva 5779.99 5372.87 4503.43 5578.71 5374.59 4856.05
Caronno
MFG_Teva 5922.26 5463.8 4583.42 5566.27 5345.32 4925.84
Czech
MFG_Teva 6254.09 5801.39 4921.42 5902.27 5679.55 5264.47
Godollo
MFG_Teva 5738.67 5336 4468.03 5551.53 5349.28 4821.35
Santhia
Table A4: Distance between MFGs and DCs (Model)

Dist. WH_AmeriS WH_AmeriSou WH_AmeriS WH_Cardin WH_Cardin WH_McKess WH_McKes

b/w DC ouce_Illinois ce_NewJersey ouce_Texas al_Nebraska al_Newyork on_California son_Virginia
& WHs
(km)
DC_Am 1393.55 1191.48 1138.64 1633.27 1280.58 2688.77 979.88
atheon
Inc
DC_BDI 758.72 600.04 1062.54 1116.98 701.58 2442.24 369.17
Pharm
a, Inc
DC_CV 967.78 285.18 1860.61 1477.19 182.75 2974.16 513.6
S
Pharm
acy Inc
DC_Hy- 369.69 1142.51 974.07 140.51 1205.78 1640.38 1058.76
Vee Inc
DC_Pri 403.7 1143.72 1241.26 338.9 1186.81 1754.06 1113.83
me
Therap
eutics
Llc
DC_Rit 664.84 111.84 1501.49 1168.92 187.62 2650.73 214.41
e Aid
Corpor
ation
Table A5: Distance between DCs and WHs (Model)

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MFG Product Amatheon BDI CVS Hy-Vee Prime Rite Aid
site Inc Pharma, Pharmacy Inc Therapeutics Corporation
Inc Inc Llc
Ivax Pac_30mg 25 0 0 0 0 0
Teva Pac_30mg 0 0 0 0 7 18
Czech
Teva Pac_30mg 0 0 25 0 0 0
Godollo
Teva Pac_30mg 0 0 24 0 0 1
Caronno
Teva Pac_30mg 0 0 20 1 2 3
Santhia
Sicor Pac_30mg 0 0 0 0 0 0
Biotech
Teva Pac_30mg 0 0 4 2 2 3
B.V

Table A6: Optimized Flow (no. of boxes) between MFGs to DCs (Model) (Pac_30mg)

DC Prod AmeriSo AmeriS AmeriSou Cardinal Cardinal McKess McKesso

uct uce_Illin ouce_Te ce_NewJe _Nebras _Newyo on_Virgi n_Califor
ois xas rsey ka rk nia nia
Amathe Pac_ 0 0 0 5 4 6 10
on Inc 30m
g
BDI Pac_ 0 0 0 0 0 0 0
Pharma, 30m
Inc g
CVS Pac_ 15 19 14 6 7 5 8
Pharma 30m
cy Inc g
Hy-Vee Pac_ 1 0 0 1 0 0 0
Inc 30m
g
Prime Pac_ 2 2 0 2 0 2 2
Therape 30m
utics g
Llc
Rite Aid Pac_ 4 5 2 3 4 2 5
Corpora 30m
tion g
Deman Pac 22 25 16 18 15 15 25
d _30
mg
Table A7: Optimized Flow (no. of boxes) between DCs to WHs (Model) (Pac_30mg)

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 MFG Product Amatheon BDI CVS Hy-Vee Prime Rite Aid
site Inc Pharma, Pharmacy Inc Therapeutics Corporation
Inc Inc Llc
Ivax Pac_100mg 0 0 0 0 0 0
Teva Pac_100mg 0 0 0 0 0 5
Czech
Teva Pac_100mg 0 0 15 0 0 0
Godollo
Teva Pac_100mg 0 0 15 0 0 0
Caronno
Teva Pac_100mg 0 0 12 0 0 0
Santhia
Sicor Pac_100mg 0 0 0 0 0 0
Biotech
Teva Pac_100mg 0 0 15 0 0 0
B.V
Table A8: Optimized Flow (no. of boxes) between MFGs to DCs (Model) (Pac_100mg)

AmeriSou AmeriSou AmeriSouce Cardinal_ Cardinal_ McKesso McKesson

ce_Illinois ce_Texas _NewJersey Nebraska Newyork n_Virgini _California
a
Amat Pac_1 0 0 0 0 0 0 0
heon 00mg
Inc
BDI Pac_1 0 0 0 0 0 0 0
Pharm 00mg
a, Inc
CVS Pac_1 12 12 1 7 6 7 12
Pharm 00mg
acy
Inc
Hy- Pac_1 0 0 0 0 0 0 0
Vee 00mg
Inc
Prime Pac_1 0 0 0 0 0 0 0
Thera 00mg
peutic
s Llc
Rite Pac_1 0 0 5 0 0 0 0
Aid 00mg
Corpo
Dema Pac_1 12 12 6 7 6 7 12
nd 00mg
Table A9: Optimized Flow (no. of boxes) between DCs to WHs (Model) (Pac_100mg)

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 MFG Product Amatheon BDI CVS Hy-Vee Prime Rite Aid
site Inc Pharma, Pharmacy Inc Therapeutics Corporation
Inc Inc Llc
Ivax Pac_150mg 2 0 0 0 0 0
Teva Pac_150mg 0 0 5 0 0 0
Czech
Teva Pac_150mg 0 0 8 0 0 0
Godollo
Teva Pac_150mg 0 0 0 0 0 5
Caronno
Teva Pac_150mg 0 0 0 0 0 0
Santhia
Sicor Pac_150mg 0 0 0 0 0 0
Biotech
Teva Pac_150mg 0 0 6 0 0 1
B.V
Table A10: Optimized Flow (no. of boxes) between MFGs to DCs (Model) (Pac_150mg)

DC Produ AmeriSo AmeriSo AmeriSouc Cardinal Cardinal McKesso McKesson

ct uce_Illino uce_Tex e_NewJerse _Nebras _Newyor n_Virgini _Californi
is as y ka k a a
Amat Pac_ 0 0 0 0 2 0 0
heon 150m
Inc g
BDI Pac_ 0 0 0 0 0 0 0
Phar 150m
ma, g
Inc
CVS Pac_ 6 4 3 0 2 0 4
Phar 150m
macy g
Inc
Hy- Pac_ 0 0 0 0 0 0 0
Vee 150m
Inc g
Prime Pac_ 0 0 0 0 0 0 0
Thera 150m
peutic g
s
Rite Pac_ 0 0 0 3 0 3 0
Aid 150m
Corp g
Dema Pac_ 6 4 3 3 4 3 4
nd 150m
g
Table A11: Optimized Flow (no. of boxes) between DCs to WHs (Model) (Pac_150mg)

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 MFG Product Amatheon BDI CVS Hy-Vee Prime Rite Aid
site Inc Pharma, Pharmacy Inc Therapeutics Corporation
Inc Inc Llc
Ivax Pac_300mg 3.000001 0 00 0
0
Teva Pac_300mg 0 0 00 0
0
Czech
Teva Pac_300mg 0 0 6 0 0 0
Godollo
Teva Pac_300mg 0 0 6 0 0 0
Caronno
Teva Pac_300mg 0 0 4 0 0 1
Santhia
Sicor Pac_300mg 0 0 0 0 0 0
Biotech
Teva Pac_300mg 0 0 6 0 0 0
B.V
Table A12: Optimized Flow (no. of boxes) between MFGs to DCs (Model) (Pac_300mg)

DC Prod AmeriSou AmeriSo AmeriSouc Cardinal Cardinal McKesso McKesson

uct ce_Illinoi uce_Texa e_NewJerse _Nebrask _Newyor n_Virgini _Californi
s s y a k a a
Amat Pac_ 0 0 1 0 0 2 0
heon 300m
Inc g
BDI Pac_ 0 0 0 0 0 0 0
Phar 300m
ma, g
Inc
CVS Pac_ 3 4 1 4 4 1 5
Phar 300m
macy g
Inc
Hy- Pac_ 0 0 0 0 0 0 0
Vee 300m
Inc g
Prime Pac_ 0 0 0 0 0 0 0
Thera 300m
peutic g
s Llc
Rite Pac_ 0 0 1 0 0 0 0
Aid 300m
g
Dema Pac_ 3 4 3 4 4 3 5
300m

Table A13: Optimized Flow (no. of boxes) between DCs to WHs(Model) (Pac_300mg)

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 Paclitaxel

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Table A14: Raw

and their amount

required per g of bulk
Material s, the Suppliers

Required(g
Cost/g of
S.No. Raw Material Supplier Name Country City Postal Code Rate($/kg) ) per g of
Pac
Paclitaxel
1 Acetone Tokyo Chemicals Belgium Zwijndrecht 2070 4.1 2553.2 10468.1
Czech
Acetonitrile LACH-NER, S.r.O Brno 7.1 65.4 464.1
2 Republic
3 Acetyl Chloride Acros Organics Belgium Geel 2440 52.6 63.8 3356.5
4 Baccata Leaves Friendship Estates UK Donaster DN6 9BU 10.4 2062.5 21450.0
5 Beta Lactam Chemos GmbH Germany Regenstauf 93128 13500.0 1.5 20358.0
6 Ethyl Acetate Chiron AS Norway Trondheim 7041 9.5 3042.8 29004.2
7 Ethyl alcohol Interchim S.A. France Montluon BP1140 1.8 36.5 66.1
8 Freon ABCR GmbH & CO. KG Germany Karlsruhe 76187 0.0 262469.7 1034.1

9 Hexane International Gases & Chemicals Ltd. UK Staffordshire ST65PD 16.3 755.2 12309.7
10 Methanol Sigma RBI Switzerland Zurich 2.7 7848.9 21192.0
11 Methylene Chloride MDP Chem Control Slovakia Bratislava 85101 2.8 915.3 2581.2
12 Nitrogen Lean Care Ltd. UK Flintshire CH87GR 0.0 1063.2 26.2
13 Phosphoric Acid Expandia Trading srl Italy Brianza 20052 1.0 179.2 178.7
14 Sodium hydride Merck Schuchardt Germany Hohenbrunn 85622 1405.0 8.3 11612.3
15 Tetrahydro Furan Brenntag N.V. Belgium Deerlijk 8540 30.4 357.1 10846.4
16 Toluene Dr. Ehrenstorfer GmbH Germany Augsburg 86199 2.4 792.2 1885.5
 Required(g)
S.No. Excipients Supplier Name Country City Postal Code per g of
Paclitaxel

1 Macrogolglycerol SUP_Kemikalieimport Denmark Lyngby 2800 87.8

2 ricinoleate
Ethanol, Anhydrous SUP_AppliChem GmbH Germany Darmstadt 64291 64
3 Citric Acid SUP_Extrasynthese France Genay 69726 0.33
Table A15: Excipients and their suppliers

Costs ($) MFG_Ivax MFG_Teva Czech MFG_Teva Godollo MFG_Teva Caronno MFG_Teva Santhia MFG_Sicor Biotech MFG_Teva B.V
SUP_ABCR GmbH & CO. KG (Freon) 71561.7 3107.2 9322.7 4079.6 3562.5 0.0 3757.0
SUP_Acros Organics (Acetyl Chloride) 17.3 1.2 3.1 1.8 1.5 0.0 0.3
SUP_Brenntag N.V. (Tetrahydro Furan) 96.2 7.6 18.7 10.5 8.5 0.0 2.1
SUP_Chemos GmbH (Beta Lactam) 0.4 0.0 0.0 0.0 0.0 0.0 0.0
SUP_Chiron AS(Ethyl Acetate) 906.8 128.4 241.5 245.5 205.1 0.0 120.4
SUP_Dr. Ehrenstorfer GmbH (Toluene) 217.9 6.5 21.7 10.9 10.4 0.0 15.5
SUP_Expandia Trading srl (Phosphoric Acid)48.1 3.0 6.2 0.1 0.5 0.0 4.6
SUP_Friendship Estates (Baccata Leaves) 554.7 64.3 140.6 96.0 77.9 0.0 26.0
SUP_Interchim S.A. (Ethyl Alcoohol) 9.5 1.0 2.0 0.7 0.5 0.0 0.8
201.2
SUP_International Gases & Chemicals Ltd. (Hexane) 24.5 52.9 34.9 28.1 0.0 10.7
SUP_LACH-NER, S.r.O (Acetonitrile) 18.6 0.4 0.8 1.9 1.7 0.0 1.9
SUP_Lean Care Ltd. (Nitrogen) 282.9 36.8 78.1 52.7 42.6 0.0 17.6
SUP_MDP Chem Control (Methylene Chloride)259.6 7.7 7.0 25.2 23.0 0.0 28.6
SUP_Merck Schuchardt (Sodium Hydride) 2.3 0.1 0.2 0.1 0.1 0.0 0.2
SUP_Sigma RBI (Methanol) 2120.1 109.0 274.8 65.2 59.9 0.0 151.6
SUP_Tokyo Chemicals(Acetone) 692.3 50.0 127.2 74.2 60.7 0.0 10.5

Table A16: Costs of supplying each raw material for optimized demand (Model)

Cost ($) MFG_Ivax MFG_Sicor Biotech MFG_Teva B.V MFG_Teva Caronno MFG_Teva Czech MFG_Teva Godollo MFG_Teva Santhia

SUP_AppliChem GmbH (Ethanol, anhydrous) 17.56 2.23 1.09 1.24 0.83 0.00 1.00

SUP_Extrasynthese (Citric Acid) 0.09 0.02 0.01 0.00 0.01 0.00 0.00
SUP_Kemikalieimport (Macrogolglycerol
ricinoleate) 25.37 2.01 2.40 4.13 1.92 0.00 3.27

Table A16: Costs of supplying each Excipient for optimized demand (Model)

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