Ensuring Better Outcomes in Pharmaceutical Warehouse Security

2012 Supply Chain Security Seminar, Wilmington DE

Mike Elliot, Executive Vice President

Product

Diversion

Warehouse

Theft

Cargo Theft

Regulatory

Compliance

Counterfeit

Products

Managed

Costs

(69%) (60%)

(53%)(50%)

Source: UPS Pain in the (Supply) Chain Survey

Why WarehouseWhy Warehouse

• Shipment Consolidation

• Combining product – storage involved

• Break Bulk Operations

• Combining product for immediate shipment

• Stockpiling

• Inventory buffer

• Market Presence

• Increase regional responsiveness

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Warehouse Security Warehouse Security –– Trends in TheftTrends in Theft

• Who

• Insider Involvement/Cooperation

• Organized Crime

• What

• OTC Items

• Schedule III, IV and V with High Market Demand

• Where

• Warehouse

• Cage

• NOT the Vault

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Warehouse Security Warehouse Security –– Trends in TheftTrends in Theft

• When

• During Business Hours

• Under Cover of Dark

• How

• Smash & Grab

• Look Up

• Shipping & Receiving

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The Importance of Warehouse SecurityThe Importance of Warehouse Security

• DEA Regulations Are Not Just a Friendly Suggestion

• Profitability At Risk

• Transparency and Public Exposure

• Consumer Safety

6

DEA Regulations: 21 CFR 1301.72DEA Regulations: 21 CFR 1301.72

• Types of Safes/Vaults/Enclosures

• Key & Lock Controls/Procedures

• Alarm Systems

• Perimeter Fencing

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DEA Regulations: 21 CFR 1301.72DEA Regulations: 21 CFR 1301.72

• Employee Supervision

• Public Access

• Guest/Visitor Procedures

• Security Force and Protocol

• Internal Monitoring Systems

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DEA Regulations: 21 CFR 1301.74DEA Regulations: 21 CFR 1301.74

Requires that the registrant notify the local Field Division Office,

in writing, of ANY theft or significant loss of any controlled

substance within ONE business day of discovery of the theft or loss.

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Profitability At RiskProfitability At Risk

• Lost Product Equals Lost Profit

• Profit Incentive for the Perpetrator

• ‘Market’ prices < 12 times what would be paid

at the pharmacy counter

• Growing demand

• Per DEA, 13% increase in number of Americans abusing

prescription drugs between 2008 and 2011

• Game of Chicken?

10*NDTS

Demand for TransparencyDemand for Transparency

• Government

• Investors

• Media

• Consumers

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Consumer SafetyConsumer Safety

• Outdated and Ineffective Product Circulation

• Product Tampering

• Product Abuse

• Overdosing/Accidental Death

12

Deterrence is Key Deterrence is Key

to Theft Preventionto Theft Prevention

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Part I: Procedures for Minimizing Part I: Procedures for Minimizing

the Internal Threatthe Internal Threat

Hiring & Training Procedures

• Extensive employee screenings

• Employee training programs focused on diversion, ramifications and

how to respond

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Part I: Procedures for Minimizing Part I: Procedures for Minimizing

the Internal Threatthe Internal Threat

Access Controls

• Restricted and controlled access to grounds, building and areas

• Alarm codes extremely limited in distribution and intermittently

adjusted

• No private automobiles adjacent to warehouse

• Stringent and automated inventory control and order processing

systems

• Employee rotation to deter collaboration

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Part I: Procedures for MinimizingPart I: Procedures for Minimizing

the External Threatthe External Threat

Standard Operating Procedures

• Loading Docks

• NO trailer trucks parked at loading docks during off-hours

• Video surveillance trained on exterior and interior walls of warehouse in

loading dock area

• Roof

• Light stands need to shine down on roof – inspect and maintain

• Install triggers along roof line – inspect and maintain

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Part I: Procedures for MinimizingPart I: Procedures for Minimizing

the External Threatthe External Threat

Standard Operating Procedures

• Alarm Response

• Remote access for Senior Management critical

• Notification Protocol – need to go in and do a complete survey with

authorities – on ALL alarms

• Test system at LEAST once per month

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Part II: Security Equipment MandatesPart II: Security Equipment Mandates

• Perimeter Protection & Surveillance

• These Four Walls: Vaults Et cetera

• Electronic Security

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• Perimeter Fencing/Anti-Ram Barriers

• Guard Gates

• Patrol/Traffic Control

• Video Surveillance/Motion Detection

Perimeter ProtectionPerimeter Protection

• Create opportunities for fully customized configuration – adaptable to new space or existing one

• Adhere to DEA requirements including 21 CFR 1301.72

• Accommodate expansion and movement – critical to an industry that is marked by rapid-fire product introductions and approvals

• Allow for integration of port-vent panels for HVAC and utilities

Vault Systems: Why Modular?Vault Systems: Why Modular?

Modular Vault OverviewModular Vault Overview

• Modular vault systems utilize high-strength pre-cast concrete or high-

density laminate lightweight panels - available with UL and GSA ratings,

solutions are available to satisfy every regulatory and insurance

requirement

• All panels formed within highly controlled environments to ensure

consistent quality and conformity to label ratings

• UL rated panels are subject to thorough testing in accordance with the UL

608 Standard for Safety to qualify for the Listing Mark of Underwriters

Laboratories Inc. and are available in every UL Burglary Resistant

Classification

• All systems complemented by UL listed vault doors for optimal security

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• Lightweight

• Accommodate assembly locations with limited site access or challenging

installs

• UL rated (Class M, 1, 2 or 3) or GSA approved

• DEA validated for Class I and II pharmaceuticals

• Do not require heavy equipment for installation

High Density Laminate PanelsHigh Density Laminate Panels

Raw Space BEFORE Vault Installation…

DEA Approved Lightweight™ Vault AFTER Installation

• UL rated (Class M, 1, 2 or 3) or GSA approved

• DEA validated for Class I and II pharmaceuticals

• Cost effective

• Ideal for installation with free-and-clear forklift access and slab on grade

applications

PrePre--Cast Concrete PanelsCast Concrete Panels

Free and clear fork lift access is required to deliver and install pre-cast concrete

modular vault panel systems.

• Multi-story vault solution to accommodate the pallet racking and forklift

requirements of the pharmaceutical industry

• Maximize use of limited footprint – build up, not out

• Top out at 40’ inside clear elevation

• Accommodate any rack configuration – typically 6 levels high

• DEA validated for Class I and II pharmaceuticals

• UL rated (Class M, 1, 2 or 3) or GSA approved

HighBayHighBay™™ Panel SystemsPanel Systems

HighBay™ Vaults

Interior Installation

Exterior Installation

HighBay™ Vaults

Interior View

Exterior View

DEA Approved Security CagesDEA Approved Security Cages

•10 gauge wire woven mesh cages to accommodate Class III,

IV and V pharmaceuticals

Security CagesSecurity Cages

• Economical way to create secure areas anywhere

• Designed to meet project storage goals and available space

• Partitions use 20 standard size panels to build any height

wall or clear span ceilings up to 35’

• Total cages or wall sections anchored into existing concrete

• Cage doors in standard sizes or built to custom specifications

• Self-closing, self-locking doors: hinged or sliding gates

Bullet Proof EquipmentBullet Proof Equipment

• Bullet resistant glass, doors and armor products configured and

integrated into the interior security system as a complement to

vaults and cages

• UL/752 Level 1-7 rated products recommended - can be any

shape and size mandated by a a given project

• Options include:• Bullet resistant fiberglass armor

• Transaction & vision windows

• Protective wood, steel and glass doors

• Curved protective glass

• Protective barriers

• Package passers

• Cart pass-thrus

ManTrapsManTraps

• Essential basic for all high-security facilities

• Easy to create with bullet-resistant sheetrock and high-

end door hardware

• Must be equipped with both video surveillance and

access control mechanisms.

Electronic Security ComponentsElectronic Security Components

Video Surveillance• To facilitate early detection of potential dangers and rapid

intervention to minimize damage

Access Control Systems• To monitor and restrict access to your facilities and areas

within

Intrusion Alarm Systems• To summon response and intervention: the very

heart of after-hours security

INTEGRATION IS ESSENTIALAll electronic security components must utilize a common platform to communicate/

interact, thereby creating a sum greater than its parts.

Video SurveillanceVideo Surveillance

• What

– IP/Analog cameras, DVRs, NVRs, Encoders/Switches

• Why

– Theft Prevention

– Forensic Evidence

– Increased Employee Safety

– Improved Productivity

– Dispute Resolution

• How

– Analyze Infrastructure and Operational Constraints

– Utilize Equipment that Leverages Open Architecture

– Develop Hybrid Solution to Optimize Fit with your Organization

– Ensure Easy Interdepartmental Operability

Access ControlAccess Control

• What

– Keypads, Readers, System Support

• Why

– Threat Deterrence

– Reduced Liability

– Enhanced Control

– Audit Trail

– Opportunities to Automate Access

• How

– Start from the Outside in

– Analyze ALL Areas of the Facility

– Err on the Side of Conservatism

Intrusion Alarm SystemsIntrusion Alarm Systems

• What

– Keypads, System Support, Monitoring Service

• Why

– Summon Expedient Response

– Early Intervention for Controlled Losses

• How

– Select Premier Level Equipment

– Choose a Trusted Monitoring Service

– Build Relationships with Community Responders

– Remote Access

– Testing & Procedure is Critical

The Mobile Pharmaceutical Building (MPB™) for Exterior Pharmaceutical Storage and

Disaster Recovery

• 200 Square Feet of DEA approved storage

• Vestibule area between vault (Class 5 Door/Daygate) and exterior door

• 20 breaker electrical panel

• HVAC system with ductwork and connections for temperature control

• Alarm system with peripheral devices

• Interior and exterior lighting

• Back-up generator available for support in case of power loss

Key Features of the MPBKey Features of the MPB™™

Part III: Integration for Optimal SecurityPart III: Integration for Optimal Security

• All components must work together

• Remote access affords better controls

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Physical Security:Physical Security: Electronic Security: Electronic Security:

Vault Systems Video Surveillance

Security Cages Access Control

Bullet Proof Equipment Intrusion AlarmSystems

ManTraps Redundant Alarm

Monitoring

Mobile Access

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Comprehensive Security Plan