Traceability mandates surge through global supply chains

Fig. 1. TraceLink claims nearly 200,000 registrants in its network, while also noting that as of Oct. 1, it has 173 signed-up customers of its traceability software solution. Credit: TraceLink

Fig. 2. SAP’s Advanced Track & Trace interfaces with enterprise and warehouse (ERP/WM) systems, as well as external logistics or contract manufacturing (3PL, CMO) partners, while communicating data to/from packaging lines and to governmental regulators. Credit: SAP

There are, it can be said

, three levels of activity going on now in the industry’s drive toward compliance with the 2013 Drug Supply Chain Security Act (DSCSA): One is at the level of packaging lines, where machine vision systems and barcoding equipment are being installed to put individual barcodes on each package of pharma products that enter commercial trade. A second is the site- and enterprise-level systems to collect, store and report the transactions involving these packages. A third, just beginning to hove into view, is collating master data about the batches of products as well as their disposition into trade channels, to perform analytics and derive business value.

The nominal deadline for at least the first level is Nov. 27, 2017—four years after passage of DSCSA. Thereafter, various parts of the downstream supply chain (distributors, retail pharmacy and others) are obligated to verify the data on the products they receive, and report that data out to other trading partners. November 2023 is when everything is supposed to come together in the US for a unified traceability system, which will create barriers to counterfeit product, reduce diversion from one trade channel to another, and aid in recalls, inventory management and contract compliance.

Pharma companies that operate globally are carrying out this work with one eye on the US timetables and requirements, and another on other countries around the world where similar traceability mandates are coming online. China is already well into a national program; Brazil and South Korea are looming. In Europe, a drawn-out program under what was called the Falsified Medicines Directive is culminating in a set of “delegated acts”—said to be finalized as this issue is going to press—which will in turn set a three-year implementation timetable for EU member nations.

More immediately, US retail and hospital pharmacies had (at presstime) a Nov. 1 deadline (extended from July 1) to collect and have available to regulators verified data on the lot numbers of products they receive into inventory (the DSCSA requirement is for lot number, expiry and source of purchase). The large chains are said to be ready to go with these data; for independent pharmacies (which make up about a third of pharmacy locations in the US) are making arrangements with their distributor-suppliers to hold that data on their behalf.

Packaging equipment bonanza

Some soft numbers: various studies estimate that there are around 7,000 packaging lines for pharmaceuticals worldwide; if every one of them spent the $150,000-500,000 that has also been estimated for the cost of adding serialization equipment, the total would be $1-4 billion, give or take a billion. A significant, but not outlandish, cost (note that it doesn’t include all the IT connectivity to the enterprise, or to transferring data among trading partners). Whatever the actual figure is, a chunk of it is being spent now, resulting in business growth for manufacturers of barcode-labeling equipment (Domino Amjet, Videojet, Seko and others get mentioned often here), machine vision systems (Antares, Cognex, Optel Vision, Systech and others are at work here), and in some cases, label converters who supply precoded labels to packagers, such as CCL Label, Nosco and others.

Many of these vendors were out in full force at the recent Pack Expo tradeshow, which now features a sideline event called PharmaExpo. The labeling part of traceability is fairly straightforward—after all, most pharma packages have a label on them regardless of DSCSA—but experts in the field warn that considerable effort must be made to get the label artwork properly re-oriented, a time-consuming step that falls most on the manufacturers themselves.

A bigger problem is one that has been nagging the field for years: the extent to which individual packages need to be aggregated, under another unique label, into cartons. Aggregation is not a requirement of DSCSA, but it is a critical part of how products get delivered to wholesalers or distributors. Those recipients need to be able to verify receipt of the individual packages, but to open each carton and verify each package would cripple modern distribution practices. Most major pharma companies are implementing some version of aggregation (and its data corollary: “inference” of what’s in a carton based on a parent-child relationship between the package labels and the carton label)—but making this work effectively is still to be established.

“Aggregation is doable; the challenge is justifying the cost,” says Greg Cathcart, president of Excellis Health, one of the consulting companies actively working in this area. In his view, it’s a “pay now or pay later” issue—the companies installing serialization equipment without aggregation measures will wind up redoing their lines later, at potentially higher cost.

Omega Design is one packaging equipment vendor that has addressed the issue by developing an intermediate barcode (which could be imprinted on the bottom of packages). A group of packages then gets bundled, the barcodes read automatically, and the bundle added to a carton. However, according to industry sources, a technique like this has its own problems—downstream trading partners might read the wrong barcode, throwing a monkey wrench into the traceability process.

Fig. 3. The as-printed serialization label, as produced by Uhlmann Packaging

Site and enterprise

The other area of traceability technology being hotly contested by vendors is the software necessary to convey serial number to a packaging line, and then bring verifiable information back to the site or enterprise level, where it can be made available for reporting to regulators or to trading partners. A variety of companies have worked long years in this area, including Axway, rfXcel, Systech and others, and now new ones are pushing in: Adents, Antares-Xyntek, and Frequentz (which is an updated version of a system originally from IBM), with more to come. Companies involved in enterprise resource planning or manufacturing execution systems, such as IBS, JDA Software and Oracle, are involved as well.

Most industry attention, however, is on two companies: TraceLink and SAP. SAP introduced a freshly built Advanced Track & Trace for Pharma (ATTP) platform in September; it essentially replaces SAP’s prior platform, the Object Event Repository (OER), although SAP says that it will continue to support that solution. TraceLink, which brought out the “Life Sciences Cloud” a couple years ago, has been racking up substantial commitments from life sciences companies, their contract manufacturers and their downstream customers since. It claims more than 200,000 registered users (which is distinct from paying customers of its software) worldwide. At the company’s Nexus ’15 users forum, CEO Shabbir Dahod noted that 173 pharma manufacturers are signed-up customers.

The competitive faceoff between the two is pretty apparent: simultaneously with SAP’s ATTP announcement, TraceLink announced an “SAP Migration Kit” to switch OER users over to TraceLink. Against TraceLink’s installed base, SAP can count on the broadbased use of its enterprise software throughout life sciences manufacturers. Nor can longtime vendors in the space with an existing installed base, like Systech, be counted out. That company is revamping its site and enterprise solutions as UniSolve, UniSphere and other “Uni-” versions to capture the line, site, enterprise and outward-facing levels of a traceability system, and is already in use in multiple countries.

TraceLink’s approach has been to create a network of connected users, and then to provide the traceability tools to each user as they request them. SAP’s “inside out” approach is to build the internal IT systems that manufacturers need, and then enable connectivity to outside parties (see AmerisourceBergen story). When it announced ATTP, SAP also said it’s going to set up a “Pharma Network” to enable trading partner data exchange. It’s entirely possible that some companies make use of both SAP and TraceLink tools, generating, for example, the internal reporting data with ATTP and then using the TraceLink cloud to convey the information externally.

Another key part of this data exchange is managing data collection and verification at warehouses, either those of the manufacturers themselves, or of trading partners and 3PLs. Roc-IT Solutions is one such vendor enabling “edge” management of this data; another is Acsis Solutions. Navitas, a rebranded business unit of Take Solutions (which does extensive work in many parts of consumer goods distribution) has entered the field as well.

Fig. 4. Omega Design’s Quantum Band-It Stretch Bander is an example of an end-of-packaging line addition. The unit is said to handle up to 300 packages or bottles per minute, gathering them into banded bundles for subsequent packaging. Credit: Omega

GS1 moves along

There remain many uncertainties about traceability implementation; the EU has just finalized its so-called “delegated acts” that define how systems will work within that economic region; Brazil, which was heading for a final implementation this year, has now postponed it. Most nations, and most of the global pharma industry, are settled on using the GS1 standards for data exchange, specifically a standard called EPCIS.

However, the GS1 EPCIS standard itself continues to evolve: Peter Sturtevant, senior director, industry development for the GS1 US organization, says that a version 1.1 of the standard is about to be issued. Also left up in the air, at least in the US, is how serialized data will be made available across distribution channels: there are many instances where a product needs to be identified without knowing where it originated, and so there is a need for a way to validate a serial number via some type of “discovery” process. Some countries have a goal of a central, national database (which already exists in Turkey, among other countries); in the US, the betting is on a semi-centralized or “federated” network of distinct data centers that can communicate with each other. This will be a continuing area of development for years to come.