The market for counterfeit pharmaceuticals is estimated to be worth up to $200 billion (according to the World Customs Organization) and growing. No longer confined to lifestyle drugs, counterfeit pharmaceuticals are a major threat to both patients and pharmaceutical manufacturers. Pharmaceutical manufacturers are harmed by reduced revenues, a lower return on R&D and damaged reputations.
To combat this very serious threat, countries around the world have legislation invarious stages of enactment to secure the pharmaceutical supply chain.
The current California e-Pedigree legislation, due to take effect January 2015, has been driving serialization and pedigree efforts in the US. States, including Texas, Florida and New York have developed their own pedigree laws. In fact there is a nasty little provision in the Florida pedigree law that could require the passing of serialized pedigrees for product distributed outside of “normal distribution” once manufacturers start serializing product.
At the federal level, the US has struggled with pedigree since the publication of 21 CFR Part 203.5a which was originally due to take effect in December 2000. Even as I write this, there is a flurry of activity at the national level around pharmaceutical serialization. The Senate bill S.959, the Pharmaceutical Quality, Security, and Accountability Act, is in committee. At the very least, federal legislation would offer the industry the opportunity to work toward a harmonized set of standards and dates for the national market vs. a patchwork of state regulations. Even as recently as the June 2013 California Board of Pharmacy meeting, there are still unanswered questions around issues such as inference/aggregation, drop shipments, grandfathering, and e-Pedigree models.
At the same time, worldwide regulatory watchers will note that there are upcoming regulations in Europe with delegated acts expected later this year—Korea (2015), India (primary package 2014), Saudi Arabia (2015), Jordon (2017) and China (2015). Meanwhile, Brazil has issued preliminary regulations for comment, with final regulations due by the end of the year; Columbia has completed a very successful pilot and intends to have regulations out for comment by the end of the year. Mexico has issued draft regulations, and the Ukraine has issued a draft law for comment.
With all this uncertainty and looming deadlines, what kind of investments can pharmaceutical supply chain participants make that are at least directionally correct? The answer lies in finding common themes or common denominators across the regulations affecting any one supply chain participant.
Certainly one of the first things any supply chain participant should do is to help shape regulations as they are being drafted. Usually proposed regulations have a comment period. Regulators are not supply chain experts and manufacturers in particular have a vested interest in ensuring regulations are harmonized across markets.
For the most part, with the exception of China, countries are standardizing on the GS1 data standards for global trade identifier, serial number, lot and expiration date, as encoded in a GS1 2D Datamatrix. Where the GS1 data standards are not specified, the regulations are written in such a way as to accommodate them as options. Even if serialization and the ability to perform unit-level tracking in the US are delayed, I am reasonably confident that some form of lot level tracking will be present in US legislation. If lot level tracking regulations are enacted, manufacturers will need to provide downstream supply chain participants with a machine-readable way of capturing the lot number for transactions occurring at the unit of sale.
There are advantages to manufacturers of encoding only the GTIN and serial number in a barcode. The lot and expiration date can be printed in human readable format online and then be recorded as attributes of a serialized GTIN in an electronic file which can be passed to downstream supply chain partners or to a regulatory body. This would enable cartons or labels to be printed with GTIN and serial number at a printer, handling serial number randomization offline if necessary. While this does not ease the burden associated with aggregating the serial numbers of sales units to shipping cases it can reduce the cost of the packaging line implementation.
From a manufacturer’s perspective, accurately capturing the serial numbers of each sales unit and associating them with the parent shipping case serial number is one of the more challenging aspects of a packaging line serialization implementation. While aggregation is generally not a regulatory requirement, it is necessary from a pure logistics standpoint anytime some form of unit level tracking or reporting shipments by customer is required.
Similarly, moving the burden of randomization to an offline solution provides the opportunity to reduce cost and complexity of the line implementation. It is widely anticipated that randomization and end-point authentication is what will appear in country-specific regulations as they emerge across Europe. Two very successful pilots have been executed, most recently the SecurPharm project encompassing millions of coded packages. SecurPharm is now entering an operational phase in Germany.
In the European security model, a dispenser authenticates a product serial number against a database of valid serial numbers prior to dispensing to a consumer. At the same time there is no reason that manufacturers should not be thinking about providing authentication portals that would allow consumers to initiate contact directly with the manufacturer via the authentication process. This could lead to voluntary enrollment in patient compliance programs, support groups and patient assistance programs.
At the end of the day, the industry has viewed serialization from a compliance/anti-counterfeiting perspective and has had to deal with a lot of uncertainty around dates and requirements. However, once these regulations are clearly defined and the industry understands what it needs to do to implement those regulations, the industry can focus on the significant opportunities to use the data generated to develop a more effective, cost-efficient supply chain.
ABOUT THE AUTHOR
Roger Saumure is president of Excellis Health Solutions (New Hope, PA; www.excellishealth.com). He has 30+ years of pharmaceutical and technology management experience focusing on manufacturing, demand management, strategic planning, supply chain, and customer services as well as ERP and revenue management systems. Roger served as the senior executive and board member of three European companies. Mr. Saumure has extensive international experience in both Europe and Asia.