Serialization: Reducing Counterfeit Drugs and Increasing Sales

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The growth in counterfeit prescription medications—an estimated $200 billion in revenue, according to an October 2020 report by Statista—has become more pronounced (1). That’s $200 billion lost by bio/pharmaceutical companies and, as a result, Statista notes that the financial burden may prevent 13 new drugs from coming to market every single year (1).

While stringent about monitoring for counterfeit prescription medications, the United States is not spared. According to the National Crime Prevention Council, counterfeit pharmaceuticals account for more than 10% of all pharmaceuticals in the global supply chain (2). It may have once appeared to be a drop in the bucket for this global trillion-dollar industry, but fake pharmaceuticals continue to rise and threaten trust in the sector and present serious health implications for consumers.

For example, in December 2020, Janssen reported that a counterfeit version of its antiretroviral treatment for HIV-1, SYMTUZA, was circulating in the market. To combat this problem, the company said that it was developing special packaging and printing techniques to make counterfeit products easier to identify (3).

However, combatting counterfeit drugs is not a challenge any one company can solve. The key to protecting drug safety and consumer confidence is traceability down to the smallest packaging unit. Although federal and state laws apply stringent and coordinated restrictions on domestic supply, the absence of full unit-level traceability handicaps consumer protection and threatens the intellectual property of manufacturers.

The US Drug Supply Chain Security Act (DSCSA), passed by Congress in 2015 and scheduled for full enforcement in 2023, mandates that manufacturers assign unique codes to medicinal products that can be clearly traced from manufacturer to patient. For an industry with complex supply chains, this sweeping regulation presents challenges, including possible penalties for non-compliance and loss of efficiency. Manufacturers must consider a number of factors before DSCSA comes into full force.

Drug-makers must, therefore, serialize finished drug products down to the package level by 2023. They need to store all data associated with that finished product, including the unique product identifier, lot or batch number, and expiration date securely for extended periods of time, and be able to access it as required along the supply chain. In addition, transaction information and transaction statements must be exchanged by trading partners and maintained by the manufacturer.

An effective data structure and simple communication between production, logistics, and sales is essential for delivering this level of accountability, traceability, and security. Bio/pharmaceutical companies need to navigate this complexity to comply with regulations; however, there are technology tools to help create value for the company at the same time.

Enterprise resource planning to simplify serialization

ISA95, an international standard for developing an automated interface between enterprise and control systems from the International Society of Automation (ISA), identifies five levels of track, trace, and serialization technology. The goal of the standard is to reduce the risk, cost, and errors associated with implementing these interfaces.

The following describes the five levels of track-and-trace serialization and its integration with the production process:

• Level 0. Production process: Serialization numbers printed and inspected
• Level 1. Sensing/device controller: Serialization and aggregation data management per station
• Level 2. Line management: Serialization and aggregation data management for the entire packaging line
• Level 3. Manufacturing operations: Serialization and aggregation data management for the entire facility
• Level 4. Business planning: Serialization interface to enterprise resources planning (ERP) and manufacturing execution system
• Level 5. Global serialization and tracking.

The relationship and communication standards between these levels may vary depending on the solution and the provider, which can lead to expensive mistakes when implementing serialization solutions.

A modern ERP that covers and supports all five levels of the serialization process can ease implementation by making the experience straightforward for users at multiple levels of the business. A solution that also controls general business processes can bolster the organization’s ability to comply by ensuring consistent quality throughout the supply chain and the production status can be traced to a batch or the smallest production unit. Serialization can also be used for aggregation to create child-to-parent relationships between individual units and the bundle, case, or pallet they came from for enhanced traceability.

Of the five levels of serialization, Levels 1-3 concern the local production facility. Here, the serialization codes are created and managed by the ERP, which assigns them to the units according to the manufacturing process, reducing manual implementation or stopgaps that may delay operations. Validation is creating scalable and repeatable business processes through an electronic system that provides checkpoints, electronic signatures, and an audit trail of all actions that have been completed. This validation is important in highly regulated industries such as pharmaceuticals. Companies need to prove to regulators, like the FDA, that they consistently follow the specific guidelines and regulations. A complex validation process can be facilitated by an ERP system with functions integrated in a single software system.

To maintain production speeds of more than 100 units per minute, the ERP system must be able to send codes to the packaging machine (Level 1), apply them, and directly compare them as quickly in parallel without interrupting or influencing the production speed. The ERP should automatically note and delete or release the corresponding serial numbers for and discarded individual units to errors with minimal manual intervention. The data from all packaging machines are aggregated on Level 2, while master data and serialization data are coordinated here at Level 3. Level 4 is integrated within enterprise resource planning systems to effectively track and trace all materials within the system at the local level. Last, Level 5 empowers drug-makers with global tracking to reach every supplier within its supply chain. Collectively, all levels of serialization are beneficial in the event of a recall.

The interaction of the software within the five levels reduces the burden of implementing serialization, improves production, saves intermediate steps, and enables company-wide reporting in real time. Some ERPs automatically create the necessary labels and documents required at each level, which allows manufacturers to pass products to customers for order processing immediately after they have been palletized.

Line, operations, and supply chain in a single view

The networking inside and outside the company takes place on Level 4 and Level 5 of ISA95. Serialization data must be communicated and administrated globally across manufacturers, service providers, customers, and government institutions. Coordinating all elements of the network streamlines business processes and compliance and brings complaints and reporting in the same view.

Instead of wondering where a particular ingredient has come from without any way of definitively determining its source, streamlining serialization data allows bio/pharmaceutical companies to guard the supply chain against counterfeit drugs. This is important because, without the ability to meticulously drill down and uncover where a crate or pallet is or where the contents have come from, bio/pharmaceutical manufacturers—and ultimately the supply chain—would remain vulnerable. They may unknowingly deploy counterfeit components thinking they came from legitimate sources. But they cannot rely on thinking alone; they must know the source of everything that goes into their prescription drugs. That is only possible by streamlining serialization data.

But the streamlining of serialization data can be used for more than guarding the supply chain against counterfeit drugs. By optimizing data from the five levels of serialization in a single software system, decision makers can gain insights across the supply chain to analyze product flows, understand logistics, transport processes, and make the changes to remove inefficiencies. Siloed data is one such inefficiency, as pharmaceutical companies were notorious for using outdated systems that limited or wholeheartedly prevented access to vital information. It is risky to have the data in different systems when you begin bolting these systems together to pass required data between them. With a single system that houses data in one place instead of relying on bolt-ons, which cause silos, bio/pharmaceutical companies can avoid one of the key pitfalls of the past. By streamlining serialization data, drug-makers can also better keep track of expiration dates, which is especially important for medications that have a short shelf life.

Business benefits beyond compliance

Bio/pharmaceutical supply chains are fast and have come a long way since the first prescription drugs were invented, but they could be faster. Thus, drug-makers need to optimize sales through tighter process control and adherence to set standards. The same processes used for compliance with serialization and traceability regulations can enable collaboration, creating more transparency for stakeholders, and improving the ecosystem of the supply chain.

Traceability, security, and regulatory compliance can be taken to a higher level when serialization is used for Electronic Product Code Information Services (EPCIS). This is especially important in a world in which revenue generated by counterfeit pharmaceuticals is now estimated to have reached $200 billion (1). EPCIS is an open standard that allows businesses to capture and share supply chain information about the movement and status of goods, both within their enterprise and with their business partners. Ultimately, this sharing is aimed at enabling participants in the EPCglobal Network to gain a shared view of the disposition of EPC-bearing objects or products with serialization within a relevant business context. This EPCIS standard is essentially an advanced electronic data interchange standard specific to the bio/pharmaceutical industry.

ERP can help manage the different levels of serialization efficiently and provide users with significant benefits by simplifying the cooperation between the various players in the supply chain, ensuring compliance, and delivering transparent insights into production, logistics, and sales. By better managing these levels, bio/pharmaceutical companies will be better equipped to minimize the risks presented by counterfeit drugs.

References

1. Statista, Estimated Number of New Drugs Lost Annually Due to Counterfeit Sales Worldwide as of 2020 (Dec. 10, 2020).
2. National Crime Prevention Council, "Fake Drugs Are Bad Medicine," accessed July 20, 2021.
3. Janssen, “Janssen Alerts Counterfeit SYMTUZA (darunavir/ cobicistat/ emtricitabine/ tenofovir alafenamide) is Being Distributed in the United States,” Press Release, Dec. 24, 2020.

About the author

Scott Deakins is the COO of Deacom.

Article Details

Pharmaceutical Technology
Vol. 45, No. 8
August 2021
Pages: 40-41, 56

Citation

When referring to this article, please cite it as S. Deakins, “Serialization: Reducing Counterfeit Drugs and Increasing Sales,” Pharmaceutical Technology 45 (8) 2021.