Big investments in technology to meet the requirements of new legislation in California are likely to play a role in boosting the presence of MD Logistics in northern Nevada.
The company headquartered at Plainfield, Ind., serves customers in California and elsewhere from a 55,000-square-foot distribution facility that it opened in Stead during 2011.
The company provides third-party logistics services to life sciences and pharmaceuticals companies — among other clients — and those companies face rigorous new requirements on the products they sell in California.
Jeff Luthman, vice president of life science solutions for MD Logistics, explains that California early next year will require a unique barcode on every unit of medication manufactured, distributed or sold in the state.
The legislation is designed to remove counterfeit prescription medicines from the supply chain and provide a way of tracking the origin of painkillers and other drugs that are diverted into unlawful channels.
MD Logistics, which specializes in customized packaging and delivery services for its clients in the life-sciences industry, spent heavily in technology to support the California requirements, which are known in the pharmaceuticals industry as “serialization.”
It’s a complicated process that requires that an individual container of prescription drugs could be traced back through the supply chain — from consumer to retailer to wholesaler to logistics provider to manufacturer.
As California officials have noted in explaining the complexities of the process, two seemingly identical containers of the same drug — same strength, same lot number, same expiration date — may have traveled through very different supply-chain routes to the consumer.
MD Logistics thinks some version of serialization is likely to become part of federal law — other states already are studying it closely — and it’s working with its customers to get ready.
Luthman says MD Logistics executives think their investment will provide an important competitive advantage.
“You’re going to have to spend the money to stay in the business,” he says, noting that the costs of running a distribution center that meets FDA standards already are steep.
MD Logistics executives think they can woo business away from competitors who haven’t put the same amount of preparation into the new requirements, and that’s likely to be good news for its Reno operation, just a few miles east of the California border.
“We hope this isn’t our last building in Reno,” Luthman says.
The company plans to triple its workforce in Reno by the end of the year.
