Serialization in the Pharmaceutical Industry
Use Increasing Regulations and Counterfeit Drugs as an Opportunity to Improve Supply Chains
Logistics heads and executives are asking themselves, “Do we need to approach serialization, or is it just a minor trend?” Is serialization pain or gain? Now is the time to act no matter from which perspective pharmaceutical companies approach serialization.
Protecting Medicines and Brands
Steadily rising counterfeit drugs worldwide are putting patients at risk and costing the pharmaceutical industry billions each year. In a nutshell, serialization is becoming a necessity for the pharmaceutical industry as a result of complex distribution networks, the need for authentication of products, current and pending regulatory requirements, as well as for brand protection and consumer confidence in medicines.
In the European Union the directive 2011/62/EU was rewritten (2001/83/EC) to respond to the increasing threat of counterfeit drugs and to specify drug serialization requirements. Under the European approach the serialization number is planned per pack and shall be checked against an entry in a source database to verify the authenticity of the medication. Of particular importance to pharmaceutical manufacturers are complicated identification and authentication features on the outer packaging of medical products, including serialization of each individual packaging as a unique, unpredictable number.
Innovative technologies for product inspection such as check weighing machines, metal detectors and X-ray inspection systems combined with track-and-trace systems cause serious difficulties for drug counterfeiters. The combination of these technologies and tamper-evident packaging are seen as the ideal solution to improve the traceability of pharmaceutical products throughout the supply chain and to optimize product quality and safety (Romulo, 2014).
Lessons From Other Industries
For many years now, traceability has been applied in many other industry sectors for different reasons, such as in the food industry to keep track of feed and food ingredients, as well as in the electronics and automotive industry for detection of faulty products and following recall actions (Skemp, 2013). Although high investments in machinery and equipment as well as IT systems are needed, other industries measured improvements in economic efficiency and supply chains after applying track-and-trace techniques (Zebra Technologies, 2007):
- Improvements in visibility, accuracy and velocity
- Optimized management of flows and resources
- Improvements in inventory and expiry management
- Prevention and detection of errors
The complexity of implementation projects to apply global serialization systems should not be underestimated. In 2014, BearingPoint conducted a benchmark study regarding serialization with companies from different sectors that highlights challenges and opportunities while implementing serialization technologies. The following topics are important for a successful and sustainable implementation:
- Codification Principles: Companies using global codification solutions benefit from reduced costs as a unique code eliminates the need for complex “translations.”
- Product Life Cycle Management and Data Management: Efficient creation, modification and deactivation processes for material master data must be guaranteed throughout the whole product life cycle. Thus, it is important to keep code changes to a minimum.
- Knowledge Management and Communication: Once serialization is implemented, it is important to sustain the continuity of knowledge of the serialization processes. Every employee needs to understand the global effect across departments. Communication and training are of high importance to apply changed and new SOPs successfully.
A strategy for the successful implementation for serialization systems has to consider answers to four main challenges: compliance, organization and processes, ecosystem, and technology. Logistics heads should not struggle with whether serialization is a gain or pain, but should start implementing serialization for the aforementioned reasons. Thus, serialization delivers benefits and competitive advantages for pharmaceutical companies.
For further information please read the BearingPoint white paper!