Virtual private networks (VPNs) are getting a lot of attention these days because they offer the promise of cheaper and more direct communications between companies, their business partners and their sales forces. Yet selecting a VPN vendor and implementing a VPN is not necessarily a straightforward process, and there are risks with the emerging VPN technology that must be managed if the promise is to be fulfilled.

In the pharmaceutical industry a number of firms are beginning the process of implementing a VPN, hoping to speed and improve the communications within their network of business users and partners. The pharmaceutical industry may be unique in the number and geographic dispersion of offices and personnel, with the largest companies having some 15 regional offices and more than 4,500 sales representatives. Keeping everyone focused on the company's strategy and delivering a consistent message under these conditions is an immense undertaking.

To date, most pharmaceutical companies have taken the hub-and-spoke approach to information management and delivery. The hub is the corporate headquarters, while regional offices and business partners, sales representatives, remote offices and business partners are the spokes. Transferring information is primarily done using physical media and some electronic delivery.

While appropriate in some instances, a hub-and-spoke approach does not address several critical issues for pharmaceutical companies including the delay in getting performance and targeting information to their field representatives and providing easy access to business information. Delays of more than a month ­ from the time a corporation receives the data until the sales representatives receive the data ­ are common. By this time, the information is stale. Loading and reprocessing of the data at each hub cause the delays.


Figure 1: Hub-and-Spoke Network

As an alternative to hub-and-spoke networks, leading pharmaceutical companies are considering virtual private networks. A VPN offers a corporation the ability to use a public network, such as the Internet, without sacrificing security. VPNs use Internet protocol (IP) networks while leveraging Internet service provider (ISP) backbones to transmit information. An ISP VPN provides secured connections between several points through the use of data encryption technology.

Current information networks within the pharmaceutical industry are analogous to the hub-and-spoke cities major airlines use in flight management. In order to get to your destination, you must first fly to an airline's hub city before getting on the flight to your final destination. Going through a hub adds needless delay to your journey. By contrast, the VPN extranet allows you to take a direct flight to your destination. In addition, the flight is less expensive and equally secure.

VPN advantages include:

  • Lower communications costs: Forrester Research estimates that an Internet VPN is only one-third the cost of a traditional remote access server (direct dial-up).
  • Faster, more direct communications: While saving money on telecommunications is important, a more important benefit of the VPN is the ability to directly access information anywhere in the network rather than waiting for the information to move to a nearby hub to access it.
  • Ability to extend a company's network to include business/trading partners: Business and trading partners have traditionally been excluded from corporate networks for cost and security reasons. A VPN provides the opportunity to inexpensively leverage the partnerships through a quicker and more efficient exchange of information.

A typical VPN installation is a hybrid of the corporate intranet, the Internet and an extranet. For example, using a VPN, a pharmaceutical sales representative can access data directly from a business partner rather than having to wait for the information to make its way through the network. VPNs allow remote users to communicate with business partners and customers in order to speed delivery of products and services.

Figure 2: Virtual Private Network

VPN Considerations for the Pharmaceutical Industry

Paramount to improving accessibility and communication while decreasing costs is a structured approach to implementing a VPN. Pharmaceutical companies have three basic issues to deal with when considering implementation of a VPN:

  • Risks of dealing with an immature technology,
  • Security,
  • Size of the VPN solution.

As with all new technologies, there are unknowns that don't receive enough attention by most companies selling VPN solutions. While efforts to standardize VPN technology, led by the Internet security protocol (IPsec) working group of the Internet task force (IETF), are well underway, significant problems still need to be addressed. For example, slight differences in protocols and software may cause the sub-networks that make up a VPN to stop communicating with each other, thus undermining the VPN. The differences will only become apparent after a large number of real-world implementations.
The privacy of a virtual private network is accomplished through authentication (making sure the person is who they say they are), encryption (making sure only authorized persons can read a message) and hashing (making sure the message was completely received and wasn't tampered with). While all three security functions are important, encryption may be the most significant issue a pharmaceutical company faces. Encryption is resource intensive, and the resource demand grows exponentially with the level of encryption and the number of users.

Large-scale implementations of VPNs have only just begun, with the Automotive Network Exchange being one of the first organizations to start the process of implementing a large-scale VPN. With little industry-wide experience in implementing large scale VPNs, a typical scale for a mid-sized to large pharmaceutical firm, there is no place to turn for help in the event of a problem. However, with the explosive growth of VPNs, the lack of support for large-scale implementations should only remain a problem for a short period of time.

We advocate an incremental approach. For example, begin by working with a single business partner to pilot a VPN. In this approach, the link between the home office and a business partner is replaced with a VPN. Then gradually begin adding other vendors and users as confidence and experience with the VPN grow. The approach allows a company to quickly begin experiencing some of the advantages of a VPN without the risks associated with a full-scale roll out.

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