Serialization: A practice well under way

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In the last issue of Pharma by Webpackaging, we delved into the severity of a problem facing the pharmaceutical sector, namely that of widespread counterfeiting. Many firms are beginning to take note of just how widespread the issue is and precisely why they need to safeguard their assets throughout an entire drug’s life cycle, throughout development, production, distribution, and delivery. One of the few ways this can be done is by giving each package produced a unique identifier so that it can be traced throughout its life cycle. Serialization, the procedure of adding unique serial numbers or other identifiers to packaging, has become a necessity.

Details on serialization

The forms that serialization can currently take are numerous, including simple visual coding to be read by machines, unique codes that can be inspected by people, RFID (radio frequency identification) tags placed on boxes, and more. Combining the basics with other security measures like thermochromic or photosensitive inks, tactile cues, or other new techniques being developed by firms worldwide. The logistic implications of this are staggering. Basically, each individual package of a particular drug must be uniquely identifiable, meaning a system must be in place to unfailingly label that information on the container. Further, each package must be tied to a larger shipment package such as a case or pallet. Then, as each item is distributed, all the information has to be read by a machine or human at each shipment stop and all of that data must be compiled and made available to a number of people, including the manufacturer, the shipping company, the distributor, the purchaser, and finally by pharmacists, law enforcement bodies, and perhaps even by consumers. It’s a massive undertaking, and it is not inexpensive. The cost of setting up such a system, providing the tools to involved parties, and creating some sort of online or proprietary user interface, however, is negligible when compared with possible losses due to counterfeiting, racketeering, or “falling off the truck”.

What many people do not realize is just how far serialization has come and that in many places worldwide, it is actually REQUIRED.

Made (and traced) in the USA

The best case in point is the United States of America. In 2006, the USA Food and Drug Administration (FDA) stated that “A drug pedigree is a statement of origin that identifies each prior sale, purchase, or trade of a drug, including the date of those transactions and the names and addresses of all parties to them.” Hence, the concept of the ePedigree is the use of some sort of electronic device to satisfy pedigree requirements as efficiently as possible. In 2007, EPCGlobal (a not-for-profit, international organization that develops and maintains standards for supply and demand chains) defined very specific standards for RFID and Internet technologies related to keeping track of products. The new concept of the ePedigree, then, took on very specific characteristics, and now, most states in the USA have adopted the standards suggested to include homogeneous data, including:

  • Lot
  • Potency
  • Expiration
  • National Drug Code* and Electronic Product Code**
  • Manufacturer
  • Distributor, Wholesaler or Pharmacy
  • Unique identifier of the unit

* In the USA, the National Drug Code is a unique ten-digit numeric identifier broken up into three segments, assigned to every available medication currently listed under Section 510 of the USA Federal Food, Drug, and Cosmetic Act.
** Defined as part of the EPCglobal Tag Data Standard, the Electronic Product Code is a universal and unique identifier for any physical object located anywhere in the world.

So, what we now have is a landscape, unbeknownst to most consumers, where specific pharmaceutical products can be traced by a number of involved parties along every step of the way from the time they are packaged on the line to purchased. This doesn’t seem to be happening as speedily as some might wish. While data is being compiled, relatively little is being done to share it. Audits of supply chain integrity are also absent, leading many in the pharmaceutical space to wonder when all the effort will begin to offer clear and practical benefits. This is further compounded by the US serialization model which is based on pedigree, where data is logged only when the product changes hands. Hence, the product may be moved to multiple locations by the same firm without a need for internal accountability. The actual location of the product, then, is never assured or wholly predictable.

The European Union (EU) model is slightly different, based on authentication. It relies on serialization at the item level and the registration of the product in a national data storehouse, with authentication of the specific item occurring at the point of sale. While this does in fact do much to deter counterfeiting, it may still occur if the point of sale has mistakenly purchased from a dishonest supplier or an honest one that has been duped. Further, the Directive 2011/62/EU on falsified medicines pushes for full drug serialization by member nations by 2016.

What does this mean to companies? Not only are they now required to comply with serialization efforts in their country of origin, they will also have to do so internationally. The good news is that thanks to international accords, serialization will not have to adhere to myriad standards based on region, at most two or three will need to be contemplated. The bad news is related to companies that wish to enter the pharmaceutical space. The industry has traditionally had a low level of new entries in the marketplace, due to a number of factors, mostly related to large, established firms. Big pharmaceutical players hold numerous international patents, protect their brands with massive advertising campaigns and marketing budgets, control manufacturing facilities that are difficult to replicate, and in general control vast reservoirs of capital. As if these barriers weren’t enough, by creating stringent international serialization requirements, nations are adding another financial hurdle to surmount.

Only time will tell if this affects innovation in the space or merely eliminates those players that are not completely dedicated to their products.