AmerisourceBergen Announces Innovative Track and Trace Program for the Pharmaceutical Supply Channel
Prepares California Launch of Unique Pilot Developed in
Conjunction with IBM and VeriSign
VALLEY FORGE, Pa.--(BUSINESS WIRE)--Nov. 13, 2006--AmerisourceBergen Corporation (NYSE:ABC) today announced at the NACDS and HDMA RFID Healthcare Industry Adoption Summit being held this week in Washington, DC, an innovative Track and Trace Program that it believes will ultimately benefit the entire pharmaceutical supply channel. AmerisourceBergen has been a leader in protecting the integrity of the pharmaceutical supply channel, first by pledging over one year ago to purchase 100 percent of its pharmaceutical and other products directly from the product manufacturer, and now by launching a unique Track and Trace initiative which will utilize RFID and Electronic Product Code Information System (EPCIS) technology to track and trace products throughout the entire distribution process. AmerisourceBergen plans to formally launch the Track and Trace pilot program at its largest distribution center in California by the end of 2006.
In the pilot, AmerisourceBergen will use IBM's RFID middleware and embedded software on readers to read RFID tags currently used by certain pharmaceutical manufacturers as those products enter the distribution center. The unique product ID from each RFID tag will be electronically stored in IBM's EPCIS, which will be the platform for secure electronic communications back to the product's manufacturer. This secure information exchange will allow AmerisourceBergen and its trading partners to work collaboratively to share transaction information and further secure the supply channel.
As new orders come into the AmerisourceBergen distribution center, the RFID system can monitor product placed in shipping totes as they move through the picking, packing, and shipping processes. As each tote leaves the distribution center the EPCIS software will record the time and location of each unit leaving the premises as well as its intended destination so that AmerisourceBergen has a complete record of the history of all RFID tagged drugs.
"The advantage of using the RFID and EPCIS system is that the information regarding the product's journey through the supply chain is stored in a manner that is useful for a number of different applications," said Shay Reid, AmerisourceBergen Vice President for Integrated Solutions. "Once the RFID tags have been read and the data has entered the EPCIS, the system can be queried to build a product pedigree for customers on demand, to provide real time receiving and shipping information to manufacturers as well as to more closely track both inventory and product demand."
"With IBM's extensive experience in designing and deploying RFID solutions, I can say that distributors like ABC will have a great advantage supporting customers through offering unique track and trace data," said Paul Chang, RFID/Pharma Executive, IBM Software Group. "And in an industry that lives depend on, IBM is providing the technology that will lead to a more efficient, safer, and more secure supply chain."
The next step in the pilot program will be to connect AmerisourceBergen's EPCIS directly to other business partner EPCIS systems and to select pharmaceutical manufacturer systems. In the first calendar quarter of 2007, VeriSign will provide services to support the deployment of technology and software necessary to enable AmerisourceBergen to communicate and authenticate transactions with its business partners while also providing the capability to query across multiple EPCIS systems.
Jeff Richards, vice president and general manager of VeriSign Intelligent Supply Chain Services stated, "AmerisourceBergen's innovative pilot will create unprecedented, direct electronic data connectivity to its trading partners. This level of data sharing and connectivity is a critical step towards allowing the pharmaceutical industry to trace the historical path of a particular product through the supply chain, which will add a level of security and efficiency to the pharmaceutical distribution process."
As AmerisourceBergen tests its Track and Trace pilot program, it intends to continue to supply electronic pedigrees in the state of Florida to those wholesale customers that require them under the state's current drug safety laws. Under the pedigree program, customers are charged fees that allow the Company to recover the cost of generating the pedigrees. The Company intends to offer its nationwide wholesale customers the same electronic pedigree program in support of the Prescription Drug Marketing Act (PDMA), which goes into full effect on December 1, 2006. The PDMA rule requires wholesalers who are not "authorized distributors of record" to provide a pedigree showing chain-of-ownership back to the manufacturer when selling the drugs to pharmacies.
AmerisourceBergen (NYSE:ABC) is one of the world's largest pharmaceutical services companies serving the United States, Canada and selected global markets. Servicing both pharmaceutical manufacturers and healthcare providers in the pharmaceutical supply channel, the Company provides drug distribution and related services designed to reduce costs and improve patient outcomes. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. With more than $61 billion in annual revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs more than 14,000 people. AmerisourceBergen is ranked #27 on the Fortune 500 list. For more information, go to www.amerisourcebergen.com.
Forward Looking Statement
This news release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. The forward-looking statements herein include statements addressing management's views with respect to future financial and operating results and the benefits, efficiencies and savings to be derived from the Company's integration plan to consolidate its distribution network. The following factors, among others, could cause actual results to differ materially from those described in any forward-looking statements: competitive pressures; the loss of one or more key customer or supplier relationships; customer defaults or insolvencies; changes in customer mix; supplier defaults or insolvencies; changes in pharmaceutical manufacturers' pricing and distribution policies or practices; adverse resolution of any contract or other disputes with customers (including departments and agencies of the U.S. Government) or suppliers; regulatory changes; changes in U.S. government policies (including reimbursement changes arising from the Medicare Modernization Act); declines in the amounts of market share rebates offered by pharmaceutical manufacturers to the PharMerica Long-Term Care business, declines in the amounts of rebates that the PharMerica Long-Term Care business can retain, and/or the inability of the business to offset the rebate reductions that have already occurred or any rebate reductions that may occur in the future; any disruption to or other adverse effects upon the PharMerica Long-Term Care business caused by the announcement of the Company's agreement to combine the PharMerica Long-Term Care business with the institutional pharmacy business of Kindred Healthcare, Inc. into a new public company that will be owned 50% by the Company's shareholders (the "PharMerica LTC Transaction"); the inability of the Company to successfully complete the PharMerica LTC Transaction; fluctuations in market interest rates; operational or control issues arising from the Company's outsourcing of information technology activities; the Pharmaceutical Distribution segment's ability to continue to successfully transition its business model to fee-for-service; success of integration, restructuring or systems initiatives; fluctuations in the U.S. dollar - Canadian dollar exchange rate and other foreign exchange rates; economic, business, competitive and/or regulatory developments in Canada, the United Kingdom and elsewhere outside of the United States; acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control; and other economic, business, competitive, legal, regulatory and/or operational factors affecting the business of the Company generally. Certain additional factors that management believes could cause actual outcomes and results to differ materially from those described in forward-looking statements are set forth (i) in Item 1 (Business) under the heading "Certain Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2005 and elsewhere in that report and (ii) in other reports filed by the Company pursuant to the Securities Exchange Act of 1934.
Michael N. Kilpatric, 610-727-7118
Kelly Sims, 917-472-3456
Rufus Manning, 703-948-4126
SOURCE: AmerisourceBergen Corporation