Solution providers in DSCSA traceability consolidate

The array of solution providers for compliance with the Drug Supply Chain Security Act (DSCSA) in the US, the Falsified Medicines Directive (FMD) in Europe, and similar regulatory drivers in some 40 countries around the world is shifting. In recent years, a number of non-US and new companies have popped up as the US’s milestone deadlines approached; also, this year Europe designated February 2019 as the intended start date for their program. Business has generally been good for equipment and solution providers, but as the pace has picked up, the client market is getting more selective: go big or go home.

Two companies are addressing this, each in its own way. Optel Vision, a leading provider of packaging-line vision and inspection systems, is acquiring Verify Brand, a longtime player in B2C technology for marking and authentication. Optel made the announcement at the IQPC Traceability Forum (Dec. 7-8, Arlington, VA). And rfXcel, which recently received a $30-million private-equity capital injection, is acquiring the assets of Frequentz, one of its competitors in life sciences. In the commonly used language describing track-and-trace serialization technology, rfXcel and Frequentz are both Level 3-4 businesses (site to enterprise); Optel is a Level 1-2 company (line equipment, and line to site) merging with a Level 3-5 (site to enterprise and beyond) one.

In both cases, the acquisitions represent a broadening customer base for their new owners. Both Optel Vision and rfXcel have been almost exclusively healthcare and life sciences. Verify Brand, which claims several dozen pharma clients in the US and Europe for serialization, is also a player in consumer-goods packaging. Frequentz (whose roots go all the way back to a track-and-trace initiative by IBM in the early 2000s) has had more success in food packaging and distribution than in life sciences. Both new owners say that they will be supporting these non-life-sciences markets, which is both a challenge for pharma (if their new targets are more attractive ventures) and an opportunity (to bring technology and innovation from these other markets into life sciences).

In Optel’s case, the acquisition creates the possibility of a near-complete “stack” of equipment and IT for traceability, from the vision systems on the packaging lines to trading-partner communication of transactions—and even to the patient. “With increased global regulations and consumer demand for greater transparency, brands need solutions that deliver true end-to-end supply chain visibility,” said Verify Brand CEO, Michael Howe, who will be staying with Verify. (Optel says that Verify’s corporate identity will be retained, and that its Minneapolis HQ will become a new branch of the company.) In the (relatively) small world of pharma traceability vendors, very few can offer a comparable stack, and the pharma industry has grown accustomed to complex system integrations of equipment, computers and software.