The United States drug market comprises a population of more than 330 million people. In terms of its attractiveness as an environment in which to sell pharmaceutical therapies, it is valued at $358 billion annually and represents approximately 44% of the total global pharmaceutical market. Drug manufacturers operating in the United States are now expected to have taken initial steps to secure their supply chain and comply with the Drug Supply Chain Safety Act (DSCSA), which was implemented in November 2017. The US Food and Drug Administration provided a grace period, opting to defer enforcing a penalty for non-compliance until the fast approaching deadline of November 2018.
The next largest market for pharmaceutical medicines is Europe, representing a population of 740 million and annual sales of h225 billion … or 22% of the global market. Europe’s pharmaceutical sector represents 28 distinct countries, currently including the United Kingdom and its four constituent countries, governed by the European Union (EU). The EU has set forth its own supply chain security requirements by virtue of the Falsified Medicines Directive (FMD). The FMD becomes effective in February 2019 and, to date, no anticipated delays in enforcement have been communicated by the EU leadership in Brussels. FMD requirements are similar in nature to the DSCSA, but also have distinct differences based on the spirit of the legislation.
Other emerging market countries have developed their own local serialisation requirements for their specific country needs and legislation. Countries such as South Korea, Turkey and Saudi Arabia have had in-country market requirements for serialisation for a number of years, varying slightly from US and EU standards. China also has serialisation requirements, varying more considerably from all other countries both in application and approach.
Where to start
Many pharmaceutical and biotech companies are well on their way to providing compliant product to the US and EU markets. For others, the delayed FDA enforcement was a welcome relief and provided the wiggle room needed to meet the deadline — given lengthy project implementation timelines and scant resource availability. Still, though, there are others who are just starting the journey.
There are many facets to consider when mapping out a robust serialisation and anticounterfeiting strategy. For starters, serialisation is a market requirement set forth by local governments to advance supply chain security; but, in and of itself, it will not eliminate the threat of adulterated or counterfeit product entering the legitimate supply chain. It is incumbent upon the pharmaceutical company to prepare and execute a well-developed plan for their own medicines, which includes serialisation, but also sets forth provisions for advanced and multilayered anticounterfeiting technologies in its packaging, as well as field enforcement within the global supply chain.
Furthermore, pharmaceutical companies need to have a firm understanding of their total end-to-end supply chain. Particularly in the US market, the end-to-end supply chain for pharmaceutical goods is extremely complex and has many trading partners, each with their own distinct needs and requirements. A well-prepared strategy programme begins with a firm understanding of where a pharmaceutical company’s products will travel while finding their way to the end patient.
Pharmaceutical companies tend to evaluate requirements of the DSCSA or FMD through the myopic lens of “What is my minimum requirement to be compliant?” Although from a legal and regulatory perspective this does set a baseline for keeping goods available for commerce, it may be limiting within the context of the bigger picture. The DSCSA and FMD establish requirements for pharmaceutical companies to provide serialised product to the supply chain by distinct dates. The legislation also puts other requirements on third party logistics (3PL) companies and wholesalers to engender traceability in the supply chain. This includes deadlines for lot traceability as well as unit level traceability, which is when only meeting the minimum requirements by the pharmaceutical company can cause conflict for the subsequent requirements set forth for the wholesaler.
The minimum requirements for the pharmaceutical company state that individual units of sale in the supply chain must be serialised and done so in a manner compliant with GS1 standards. These requirements, in the short-term, have no requirement for aggregation. If a company opts not to aggregate their goods, they have a situation wherein individual serialised units, such as cartons, are placed together within a bulk pallet. Knowing specifically what individual units are contained on the pallet or within a shipping case is left to a practice known as inference. One is left to infer what specific numbers or goods are on the pallet based on the sequencing in production. This practice is demonstrated to be problematic — given the nature of manufacturing practices and unforeseen influences, particularly human error.
To achieve their own requirements for unit level serialisation tracking, wholesalers and 3PL companies need to be able to track individual goods in their warehouses and through the millions of transactions executed daily. Furthermore, there are upcoming requirements for them to be able to verify the authenticity of goods returned from downstream trading partners. At a recent conference, a leading wholesaler in the US noted that they execute 20,000 returns on a typical day. Without the ability to track individual units through the supply chain, it would be impossible to verify the authenticity of the goods.
So, to meet the basic requirements of the DSCSA or FMD, pharmaceutical companies would not be obligated to aggregate their goods. This puts wholesalers in a problematic situation whereby they have to account for and trace individual units of sale, but have no methodology for doing so short of breaking down inbound goods by lot, and subsequently pallets, to the individual unit level. The “big three” wholesalers in the US have issued formal letters to pharmaceutical companies, making it clear that they expect aggregated product; and, if this requirement is not met, they intend to charge back any costs associated with the activity of breaking down inbound goods.
EPCIS: the common denominator
In mapping out the end-to-end supply chain for their goods, pharmaceutical companies will uncover a complex path to market. This path may include one or multiple CMOs, one or multiple 3PLs, multiple wholesalers and many downstream partners such as hospitals, clinics, pharmacies and/or specialty pharmacies. The unique element brought upon the market by the need for serialisation is the complexity of the IT demands. To secure the supply chain and create traceability, significant amounts of data need to be passed from one node to another, ensuring accuracy and security of the data at each point. These data transactions and interfaces involve many different IT systems and infrastructures.
Owing to the complexity of the pharmaceutical supply chain and its multitude of trading partners in getting product to the patient, it would be virtually impossible for each trading partner to establish and map a discreet data connection to all others. This is where EPCIS providers have filled the void and provided an invaluable service by enabling a secure supply chain. EPCIS providers become the common denominator, acting as the critical intermediary at different touch points throughout the supply chain to both transfer and translate data from one partner to another. It is therefore critical for a pharmaceutical firm to execute robust analysis of EPCIS service providers and select one that’s best positioned to ensure success for their product or products.
This article appeared in the September issue of Manufacturing Chemist.
