2017 is going to be a busy year for traceability initiatives in the US and abroad, as manufacturers and packagers get more experience under their belts in installing the necessary serialization equipment, and wholesalers and other trading partners are making initial forays into actually using the data that traceability mandates are generating. In the US, the deadline is late November 2017, when—by law—all US-packaged pharmaceuticals are to have a “serialized numeric identifier” (SNI) in place, at the unit-of-use level. This is one of several upcoming deadlines under the 2013 Drug Supply Chain Security Act (DSCSA). China, South Korea and India are wrestling with their own internal systems, while Brazil has put a hold on its program until next year.
In Europe, the Falsified Medicines Directive (FMD), an EU-wide mandate (with several other European countries—including Great Britain post-Brexit—also complying) has an early 2019 deadline for a first stage of compliance. Several European trade associations have already organized as the European Medicines Verification Organisation (EMVO), and the initial stages of a European Hub for transmitting serial identification data among member countries have been taken, with early 2017 as a target for operational capabilities of the Hub to be in place.
So far, so good. Despite such mandates, FDA is months overdue in producing guidance documents based on DSCSA. In a presentation at an FDA DSCSA public hearing in mid-October, Anita Ducca, SVP of regulatory affairs at the Health Distribution Alliance (formerly HDMA), voiced concern that this overdue guidance is gumming up some basic documentation processes for DSCSA. “The lack of federal licensure regulations [is leading to] state inspectors and state boards developing different interpretations and requirements that are inconsistent with the DSCSA and with each other. And once the federal regulations do issue, states will have to go back and amend what they’ve just changed, creating additional stresses for the states’ limited resources, as well.”
Meanwhile, the FMD, which is supposed to combine serial item data with product master data (that is, a description of what it is that has been serialized) is dependent on a different program, the Identification of Medicinal Products (IDMP), which is being managed as an effort of the International Standards Organization (ISO). That effort is proceeding on its own timetable, and EMVO says that its availability when the FMD is supposed to be in place remains “to be determined.”
Two other operational standards bear mentioning: at press time, the GS1 organization (a nongovernmental organization whose participants are most of the barcoding users and suppliers in the world) was about to release version 1.2 of its EPCIS standard. EPCIS provides the definitions and coding procedures for how traceability and identification information are to be shared among trading partners and government agencies. Peter Sturtevant, senior director at the GS1 US organization, notes that this EPCIS v1.2 will have 152 examples of exception management (unaccounted-for disconnects between the flow of product through supply chains and the flow of identification and transaction information that is supposed to accompany it), given clear evidence of how complicated pharmaceutical distribution is about to become. GS1 Healthcare has a process for certifying compliance with the EPCIS standards, but this measure of performance is only sporadically being followed by vendors in the field.
Another industry-led initiative, the Open Serialization Communication Standard, or Open-SCS, now has two more members (Arvato Systems and TradeTicity) in addition to the 13 it had in August, when a press release updating its activities was issued. (The 13 members onboard then were Abbott, Advanco, Antares Vision, OCS Checkweighers, Omron, Optel Vision, Roche, Pfizer, SAP, Systech, Teva Pharma, TraceLink and Werum IT Solutions.) Open-SCS is an effort to address interfacing issues among the equipment used for serialization: machine vision systems, case-packing machinery, labeling devices and the like. Like EPCIS, Open-SCS seeks to establish a common interfacing protocol for serialization (at least at the packaging line level), but it’s an open question whether the standard will be in place before the bulk of packaging line equipment has been put on order by manufacturers.
Given the complexity of all these efforts, it’s no surprise that when industry experts looked at the California e-pedigree rules that were supposed to go into effect in 2009 they were pushed off to (at that time) 2015. When the DSCSA federal law was passed in 2013, its full implementation was to be staged year by year through 2023. The industry, FDA and the various nations taking on this task will be hard-pressed to have a functioning system by the early 2020s.
Which is not to say that the pharma industry is standing pat on serialization and traceability. Some 15% of the 10,000 (or more) packaging lines for pharmaceuticals have been fitted out with the barcoding and data-collection systems, according to informal polling of industry insiders. Systech, Optel, Antares Vision and others that supply the line-level machine vision systems have all expanded over the past year, and the battles among the vendors is going hot and heavy right now. Some reports of months-long delays in getting the necessary machinery are already beginning to crop up as the November 2017 deadline in the US approaches.
The big question before packaging and manufacturing engineering teams at the moment is whether to install so-called aggregation equipment at this time. Aggregation addresses the realities of how pharmaceuticals are shipped—generally, in cases that hold 24 to 100 or so units of the drug product. As each unit has its own serialization number, and as DSCSA requires pharma trading partners to verify that those specific serial numbers have been received, wholesalers and others are concerned that, without an aggregation step, they will be obliged to open each case and manually verify its contents. With an accurate aggregation, wholesalers want to be able to infer the contents of the case. However, aggregation/inference is not mandated by DSCSA.
An excellent example of a packaging line with aggregation was highlighted by Antares Vision this summer for an unnamed pharma client (packaging and labeling vendors Domino, Cognex, Omega Design, ESS Technologies and Weiler Labeling Systems were also involved). The 24 pill bottles that make up a bundle of product are each barcoded on their bottoms with a “helper code” linked digitally to the actual serial number on the sides of each bottle. These helper codes are read with the assistance of a Fanuc robotic arm that picks up the bundle, presents it before a camera, and then places several bundles in a case. According to industry experts, such systems can double the cost of a serialization project on a packaging line. Mindful of the capital expense of such systems, and mindful also that many pharma packaging lines run at fairly slow speeds, serialization equipment vendors have also developed manual case packing stations: An operator manually loads a batch of cartons, records the serial numbers digitally with a scanner, and then generates a case label that contains the identified serial numbers. For their part, wholesalers are telling pharma manufacturers that they will insist on aggregation to accept deliveries; in the final analysis, however, drug shipments still have to go through to meet patient demand, so some workarounds will eventually be established.
Data at the enterprise level
Packaging and manufacturing engineers, with a boost from automation experts, will work out the details of implementing serialization in coming months. A pharma manager concerned with DSCSA compliance, however, has to pay attention to the IT systems that take the packaging-line data, add the EPCIS event information, and then make it available to trading partners and others. Third-part logistics providers (3PLs), contract packagers play a role as well, depending on how the pharma brand owner assembles its network. As products move down the supply chain to pharmacies, hospitals and other dispensers, these organizations need enterprise-level data management as well. This level of data management is a hotly contested business arena as well.
By some measures, TraceLink is pulling away from the pack of traceability vendors. The company is not shy about broadcasting its project wins and customer base—currently at 105 pharmaceutical and contract manufacturing organizations, plus more than 300 downstream customers. It is operating in both the US and Europe, as well as several Asian countries.
A key to TraceLink’s rapid adoption was its early decision to build it traceability platform in the cloud, with a true, multitenant architecture running mostly on Amazon Web Services. Pharma companies and distributors have been encouraged by TraceLink to file account information with it (whether or not they are TraceLink customers), and more than 240,000 users have done so, says the company. The cloud-based account provides ready access for up- or downloading serialized data; subsequently, those users may opt to have TraceLink’s Life Sciences Cloud manage serial-data records.
Also charging into the market is SAP, which announced the Advanced Track and Trace for Pharmaceuticals (ATTP) platform a year ago. ATTP updates an earlier SAP traceability platform built on SAP’s Object Event Repository. Currently, SAP says that many of its clients have opted for an on-premise implementation of ATTP. This fall, word came out that it is tailoring ATTP to a cloud-based format, with Deutsche Telekom among its cloud-based providers.
As traceability business in pharma ramps up, more players are crowding into the arena. Longtime participants such as Axway, with its Global Trade Manager platform, Frequentz, with its Information Repository and Intelligence Server (IRIS), rfXcel, with its Compliance Management offering, have won pharma distribution business. Verify Brand, a participant in earlier stages of pharma traceability, is building out a services team and has substantial serialization business outside pharma. Systech, which has a large base of customers for its packaging line technology, has revamped the formerly named Systech Guardian and Sentry software as UniTrace. New players, such as TrackTraceRx, based in Orlando, FL, have appeared.
A growing number of vendors based in Europe, where serialization projects ranging from pharmaceuticals to wine and other consumer goods have been undertaken, are also competing for global business. Among these are Adents and TradeTicity. Recently, Systech announced a partnership with Servicepoint Oy, an automation vendor in Finland. Arvato Systems, the IT arm of the Arvato group, a major distributor in Europe, is marketing a traceability platform based on its experience in developing some of the software used in Germany’s SecurPharm project (Germany’s approach to FMD compliance).
Mention should also be made of companies that put an emphasis on warehouse or related “edge” systems that are designed to carry serialization data from the packaging line through to warehouse inventory and beyond. Two companies in this space, ROC IT Solutions and Acsis, have been winning pharma business.
Yet another category of service providers are IT systems integrators or consulting firms that assist pharma companies building out their traceability platforms. Navitas, a New Jersey-based systems integrator, is working with Axway on implementations. Movilitas, a European-based firm, has a close relationship with SAP, while Xyntek, based in Pennsylvania, is the North American distributor of Antares Vision software and hardware. Excellis Health Solutions, a strategic consulting firm, has been guiding corporate-level planning and runs a regularly scheduled meeting, Global Track & Trace, for industry participants. Another company, Vantage Consulting Group, announced a consulting service specifically for contract manufacturers and packagers in September.
While TraceLink is exclusively a multitenant system, most of the other traceability IT vendors offer either on-premise or cloud-based single-tenant systems.
TraceLink maintains that a multitenant system (where any software upgrade affects all users more or less at that same time) provides a better guarantee of interoperability and lower cost of ownership, because the exercise of reconfiguring the software is avoided. Its competitors, however, argue that a single-tenant version has a higher level of security for individual customer’s data and more control over access to that data. Arguments on both sides of this question are compelling, although the growing use of TraceLink’s solution is pointing in the multitenant direction. To some degree, SAP is straddling the tenancy question by developing a platform, PharmaNET, that will offer trading partners a means of exchanging information speedily.
Haris Kamal, SVP at Verify Brand, makes the point that multitenant solutions reduce the user’s configuration control, and create complications when that user wants to customize the platform for specific needs. And while mutitenancy and interoperable industry standards like EPCIS are supposed to make exchanging information relatively straightforward, the reality is that many traceability implementations have custom modifications of one sort or another. This variability might dissipate as more systems are deployed and as EPCIS, Open-SCS and governmental guidances become more established; that’s a question the industry will be resolving for years to come.
The full implementation of DSCSA will require the active participation of retail pharmacy and hospital-based health systems, who are obligated to verify the authenticity of the products they receive from distributors in their own systems. The major wholesalers are offering to do this as a service to their retail pharmacy clients, especially the independent pharmacies; but little is being heard from the major drug chains.
On the health system front, however, 2016 saw significant progress by hospital pharmacy directors eager to deploy traceability as a means of managing their internal flow of drug products. Here, TraceLink has racked up several clients, including some major group purchasing organizations who, in turn, recommend TraceLink to their members. RfXcel and a new company, The Forerunner Group, have been similarly recommended by Premier, Inc., a leading GPO.
One company that might have a beeline into retail pharmacy DSCSA compliance is ValueCentric, which has been collecting and analyzing distribution data, based on conventional EDI records, for years for pharma and distributor clients. The company claims a DSCSA compliance capability that will meet pharmacies’ coming deadlines, and has worked closely with Walgreens in the past on data collection and reporting.
Another traceability theme that has arisen during 2016 is the applicability of blockchain technology to pharma traceability. Blockchain, also known as distributed ledger technology (DLT) is the underlying technology for bitcoin, the currency not based on any national treasury. At its heart, blockchain is a method of distributing the validation of a record or transaction across many data-storage systems, none of which are connected directly to another. In effect, the network itself is the validation of a record.
For pharma traceability, blockchain could do two things: relieve the dependency of one centralized data repository where all records would be maintained (which is the driving principle of the national authentication systems under Europe’s FMD); and, with the appropriate data-access controls in place, enable companies who are not direct trading partners of each other to verify transactions and, ultimately, drug authenticity. (It bears mentioning here that the driving force for passage of DSCSA was to prevent the distribution of counterfeit products, and FDA is most focused on protecting the US supply chain from those counterfeits.)
FDA has left open how DSCSA data is to be communicated up and down the supply chain when the system is fully established after 2023. A central repository is conceivable (although who would run it is an open question); another is a so-called federated system of repositories that could communicate with each other. (At the moment, each originator of package serial numbers is keeping its own data stored, and sharing it with trading partners it deals with.) The original architecture of GS1’s EPCIS standard included the concept of a “discovery service,” whereby queries about the origin of a particular drug package could be handled, but the implementation of this is still in the concept phase.
Most serialization participants Pharmaceutical Commerce queried during late 2016 scratched their heads about blockchain: the work at hand on existing technology implementation is so intense, and the focus on DSCSA compliance so close, it leaves little time for anything else. However, the topic got some momentum when the Office of the National Coordinator (ONC), an arm of the White House that is directing healthcare IT standards nationally, set up a competition for papers on “Use of Blockchain in Health IT” earlier this year, and announced winners in late September. Most of the papers were focused on blockchain for managing patient records, healthcare reimbursement processes and collecting clinical research data; the competition also demonstrated that heavyweight IT consulting firms like Deloitte and Accenture are looking closely at the technology.
Robert Celeste, a former GS1 Healthcare manager who has set up his own consulting firm, RC Partners, is also organizing a Center for Supply Chain Studies, and has targeted the potential use of blockchain in pharma traceability as a research topic. The company is currently running seminars on the topic, and hopes to organize a member-driven study during 2017. More information is available at www.rcpartners.biz.