Serialization Hits the Home Stretch

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Serialization and traceability have been discussed for so long in the pharma industry that it’s easy to forget the fact that the concepts have been with us for 15 years now. In the early 2000s, efforts to secure the supply chain in Florida first brought the term “e-Pedigree” into pharma’s everyday vocabulary.

So far, more than 40 countries around the world have set standards and deadlines for item-level pharmaceutical serialization and traceability, and two to three countries join this list each year. By November 2017, the US Drug Supply Chain Safety Act (DSCSA) requires that all pharmaceutical manufacturers serialize products down to the item level, including a product identifier on labels and cases, as well as information on product transactions as the product makes its way through the supply chain. Most larger pharmaceutical companies are well-prepared for the deadline, and successful pilot programs (see Sidebar, p. 76) have shown that manufacturers and distributors can synchronize operations and exchange the data required to make traceability possible.

Not all companies are ready, however.  In December 2016, a survey of more than 331 industry professionals sponsored by TraceLink and designed to be a snapshot of industry’s efforts (see Sidebar, p. 78) found that 19% of pharma companies, 11% of distributors, and 9% of dispensers still haven’t begun to address requirements, while only 24% of pharmaceutical manufacturers say that their contract manufacturing organizations (CMOs) will be ready for the deadline (1).

This lagging response is likely due to a combination of factors. Most of the companies that aren’t prepared are small to mid-sized companies, says Bruce Bleiman, Systech International’s global senior vice-president of sales, and many of them were not exposed to serialization concepts in the earliest stages of the industry’s efforts.

Misunderstanding serialization

Even if these companies did have some understanding of the concepts involved, many viewed serialization as a limited, packaging project rather than the far-ranging multifunctional effort it is, notes Paul DuPont, vice-president of marketing with Ropack Pharma Solutions, a contract development and manufacturing organization (CDMO) based in Montreal, Canada.  In addition, compliance deadlines for past serialization programs (notably California’s) were extended and some companies may have questioned why they should invest in something that, in the end, might not be required, says Shabbir Dahod, CEO of TraceLink, which offers Life Sciences Cloud, a cloud-based solution for pharmaceutical serialization.

Even companies that have invested heavily in serialization have been surprised by the level of commitment required. First, there are capital costs, which tend to run approximately $200,000 to $300,000 per packaging line. But beyond that is the complexity of data integration, notes Dahod, especially with CMOs and customers, and the networking and data exchange aspects of serialization.

Dealing with complexity

Complexity already defines the pharmaceutical supply chain and the relationships within it, he says. This was clear in the TraceLink survey results. Pharmaceutical manufacturers may say that they do most of their business with the “Big Three” pharmaceutical distributors (McKesson, AmerisourceBergen, and Cardinal Health), says Dahod, but, in reality, they have more customers and different relationships, and use different delivery models (e.g., drop ships or special orders) with each one. Pharmaceutical company professionals who responded to the survey said that more than 40% of their business transactions are with customers other than the Big Three; 25% of pharmaceutical manufacturers had more than 10,000 customers, while 31% had between 500 and 10,000. In addition, 29% sell directly to hospitals and pharmacies.

Not only must companies deal with individual product transaction histories, says Dahod, but, as they bring CMOs and internal packaging lines on board, the number of business and operational processes they must integrate with, both internally and externally, increases dramatically. “Ten to twenty thousand times the amount of information must now be exchanged, and floated forward to wholesalers and hospitals,” he says.

Companies that have made the effort, however, are seeing results. “Where, in the past, maybe less than 5% of their customers were integrated digitally, they are now connected with all of them. For some companies, that means tens of thousands of connections, promising more efficient information exchange, better systems integration and fewer errors,” says Dahod.

No short-term results

Making those connections puts companies in a position where they can see the potential for return on investment. “This effort requires end-to-end thinking, from packaging all the way through to our customers,” says Mike Rose, vice-president of supply chain visibility with Johnson & Johnson Supply Chain (JJSC). “The reward is improved visibility that will help ensure that our patients receive genuine product,” he says.

Some of TraceLink’s original customers are just beginning to see, and leverage, this potential (e.g., with Secure Chain, a product designed to provide closed loop end-to-end traceability for serialized product, within specific supply chain segments). 
TraceLink has also been working with pharma companies to develop consumer-based authentication solutions, and software that would mine event data to better manage inventory. “In 2018, when large volumes of serialized product are out there, we expect to see more of these types of applications,” says Dahod.

But, in the meantime, how can unprepared companies be ready by November 2017? “The serialized mandate is approaching fast. Using the conventional approach, not everyone will be able to be ready in time,” says DuPont. “One of the harsh market realities is that there is a limited number of hardware providers out there to help companies who are just starting to put their serialization programs together.”

DuPont notes that some CMOs, even those who partner with large pharma companies that have advanced serialization programs in place, won’t be ready for the deadline. For pharmaceutical companies and CMOs, he notes, the highest hurdles are buying and installing the hardware, especially given demand for services as the deadline approaches. Others are internal testing (investing in and installing software and data management tools), and managing different requirements at each location.

Accelerated compliance

To help companies become compliant by the DSCSA deadline, a number of solutions providers are now offering accelerated compliance programs. In late January 2017, Systech International launched “Serialized by November,” a program involving its long-standing equipment partners, which include Omega, LSI by ID Technology, UPAK by Ultimate Solutions, Etipack, and Inno4Life.  The program compresses the process into 90 business days, with the initial phase (kickoff discussion, data collection and software shipment) taking two weeks; the design phase (involving integration drawings, documentation, validation and hardware shipment) taking six weeks; implementation, including factory and site acceptance tests (FAT and SAT) and startup, requiring four weeks; and project closure taking two weeks.

Fee-for-service approach

In late November of 2016, Ropack and TraceLink, together with the equipment specialist Optel, first announced the formation of the International Serialization Hub, which they plan to launch formally in the Spring of 2017, to help pharma companies comply with DSCSA serialization requirements by November 2017 (2). With this program’s operating model, DuPont explains, companies send product to Ropack, which will take it and serialize at the unit of sale (whether item, carton, or pallet), and then send it on to its destination. It’s a simple, fee-for-service approach, he says, and can work with any data management platform. For companies that already use TraceLink’s solution, however, the costs will be much lower and the timeframes, shorter.

The service would be offered, but not limited to, Ropack’s existing client base. As DuPont explains, the idea for the program came from a large pharma client that had serialized, but still could not get one of its 50-year-old plants ready for DSCSA serialization.

For Ropack, investment in the program reflects the reality that serialization is no longer ‘nice to have,’ but a mandated regulatory compliance platform. “Serialization has become like validation was 15-20 years ago,” Of course, DSCSA mandates are only one facet of the global serialization requirements that pharma companies now face.  Accelerated programs may not be a long-term solution, but at least they may help resource-strapped companies achieve basic compliance in time for the deadline.

References

1. TraceLink, 2016 Global Drug Supply, Safety, and Traceability Report, tracelink.com, December 2016.
2. Systech, Systech Announces 90-Day Rapid Compliance Program for Pharmaceutical Companies, Press Release, prnewswire.com, Jan. 26, 2017.

Article Details

Pharmaceutical Technology
Vol. 41, No. 3
March 2017
Pages: 74–78

Citation

When referring to this article, please cite it as A. Shanley, "Serialization Hits the Home Stretch," Pharmaceutical Technology 41 (3) p.74–78, 2017.