SASB

Medicine supply chain integrity

To ensure our Distribution Centers do not receive compromised medications, we use a restriction list that includes all medications with a history of issues. During the receiving process, we sample boxes of non-controlled medications for inspection, while 100% of controlled medication boxes are inspected. We use an audit checklist, and if any compromised medication is found in the sampled boxes, we open and inspect 100% of the received batch. Regarding medication expiration, our system automatically blocks the receipt of items with less than one year remaining. We alert suppliers about recurring compromise occurrences so they can take appropriate measures to prevent future cases.
We also manage medication recalls for both Distribution Centers and pharmacies. At the DCs, recalled items are segregated in a non-invoicing area to prevent their shipment to pharmacies. For products already at pharmacies, we notify the units via the LEA system, and the team is responsible for removing recalled products from shelves and segregating them for collection.
Monthly, our Supply Chain team conducts detailed mapping of expected losses at the Distribution Centers. This process is crucial for supporting the Commercial and Pricing departments, enabling effective loss reduction actions. A key focus is identifying products with short shelf lives, allowing us to negotiate reimbursements or adopt other measures with commercial partners. To enhance this management, we improved our Registration Management system to now include product expiration information. Additionally, we established workflows to handle quality deviations and recalls, accelerating the removal of problematic items from our inventory.
Transfers between DCs located in the state of São Paulo — where our largest product volume is concentrated — remain consistent and operate weekly. The main objective is to balance inventories, avoiding repurchasing products already available at other DCs.
At the pharmacies, the transfer process between branches enables units with excess stock of a product to transfer it to others with stronger sales history. We also conduct pricing actions, prioritizing items with no sales in over 10 months. To maintain effectiveness, we strengthened our partnership with the Pharmacy Operations team, focusing on result analysis, improvement action planning, and monitoring execution at the stores.
Additionally, we implemented two initiatives to reduce losses at pharmacies. The first manages excess products without reimbursement agreements with commercial partners. We evaluate the duration of excess stock and create promotional campaigns to minimize losses. The second initiative targets customers with promotions focused on products nearing expiration, helping reduce losses and the need for incineration.
Finally, we highlight the DOA Project, aimed at donating products with minor packaging variations or near expiration dates but still suitable for use. These products are donated at no cost to partner organizations, contributing to our company’s social responsibility.