Article | March 3, 2017

A Bridge Over Troubled Water: The Journey To Serialization Compliance

A Bridge Over Troubled Water: The Journey To Serialization Compliance

By Nicolas Girard, Ropack Pharma Solutions and Graham Clark, TraceLink

In November 2013, President Obama signed the Drug Quality and Security Act (DQSA) into law, which included Title II, the Drug Supply Chain Security Act (DSCSA). The DSCSA outlined a plan to build an electronic, interoperable system to track the chain of custody between manufacturers and pharmacies selling and distributing drugs and medical devices. Up until this time, a lackadaisical approach to serialization readiness had developed due to a history of delays with California’s ePedigree law. While there have always been benefits to improving traceability in the pharmaceutical industry, stakeholders across the pharmaceutical supply chain had little interest in investing time and money into something they viewed as uncertain; however, enactment of the DSCSA meant inaction was no longer an option and every stakeholder had to begin steps toward compliance—albeit slowly and reluctantly in many cases.

This regulation from the FDA outlined serialization and traceability requirements spread over the course of 10 years with preparation for each phase accumulating into a potentially high overall price tag. In a recent study, manufacturers reported the cost of a one line management system for serialization and traceability can range from $400,000 to $2.8 million, with an average cost of $1.4 million. In addition, implementing a system like this can take up to 18 months, which could even be extended due to vendors bogged down with last-minute equipment orders. The combination of cost and limited time has resulted in many companies facing an uphill battle toward compliance. This November, the stakes get even higher as the second phase of the DSCSA goes into effect. It requires pharmaceutical manufacturers to mark their products with a National Drug Code (NDC), serial number, lot number, and expiration date in both machine-readable and human-readable format. Pharmaceutical companies that are not ready must come to some resolution, as distributors will not accept any products that have not been serialized by the November 2017 deadline.

Because of its potential impact on an unprepared company, the DSCSA has had a black cloud cast over it since it came onto the pharma scene nearly four years ago. Its ability to ensure the safety of consumers and the sustainability of the pharma industry has been overshadowed by dollar signs, timelines, and overall skepticism and uncertainty. Nevertheless, the DSCSA does offer a potentially effective way to reduce the vulnerability of today’s pharma supply chain and preserve the business of saving lives. So what should you expect when it comes to preparing for the next phase of DSCSA, and, most importantly, is it too late?

Expectations Versus Reality

In the earlier days of pharma, the life sciences supply chain typically moved from the manufacturer to the patient in one direct path. However, as the pharmaceutical industry has grown, its supply chain has evolved into a spider web of interoperability that includes multiple partners and locations. This added complexity to manufacturing has created a number of challenges, especially when it comes to serialization.

In 2015, TraceLink, a provider of track and trace network solutions for the life sciences industry, sought deeper insight into the complexity and challenges of achieving a serialized and electronic supply chain. Partnering with Actionable Research, TraceLink surveyed a total of 331 respondents from a range of segments, including pharmaceutical companies, wholesale distributors, and hospital and retail pharmacies. The field included supply chain professionals whose companies had a DSCSA requirement, with purchase decision makers being the primary targets. The result was the 2016 Global Drug Supply, Safety and Traceability Report.

In it, TraceLink challenged four core assumptions about the impact of compliance made by pharma when DSCSA was signed into law, despite the industry’s lack of preparation. As gleaned from the report, the following industry assumptions were tested:

  • The pharmaceutical supply chain was “normal,” meaning that pharmaceutical products move in a very linear fashion, from pharma to wholesaler to dispenser, with rare deviation.
  • Meeting lot-level compliance — or exchanging just one file between two parties for every shipment — would be easy.
  • Regulatory requirements wouldn’t take much time to address.
  • The industry would be ready for the move to a fully electronic world.

TraceLink found that customers and suppliers can reach numbers in the dozens to the thousands. For example, 31 percent of the pharma companies surveyed had 500 to 10,000 customers and 26 percent had more than 10,000. There is also a considerable amount of product moving around, with nearly 30 percent of pharma respondents surveyed producing at least 500 products and almost half manufacturing anywhere between 10 million and more than 1 billion saleable units. .

Serialization touches every corner of an organization; therefore, it is not surprising that respondents reported lot-level compliance required significant managerial, staff, and third-party resources. In TraceLink’s research, pharma companies said participation was needed from an average of 22 of its managers, with sizable investments made in supply chain, operations, and customer service departments. Nearly 50 percent of pharma companies, a third of wholesalers, and a quarter of dispensers surveyed contracted outside help in a variety of areas, such as implementation, IT consulting, and regulatory or business expertise. When it came to system modifications, 54 percent of pharma companies and 53 percent of wholesalers had to make changes to meet customer requirements. In some cases, pharma companies and wholesalers were asked to make modifications but were unable to do so.

Even with all of the time, money, and preparations made to meet DSCSA’s phase one mandates, many of the companies surveyed still do not feel they are prepared for the upcoming November 2017 requirements. This is likely due to the data volume and connectivity challenges the next phase of DSCSA brings. With so many contract partners in the pharmaceutical supply chain, 10,000 to even 100,000 times more data will need to be managed than it was for the lot-level requirements. This includes not just exchanging it, but also storing and verifying it in a way that does not impact operational efficiency.

Through engagement with its 105 contract manufacturing (CMO) customers in the U.S. market, TraceLink found only about one-third have any plans or meaningful ability to prepare for this year’s serialization deadline. While 45 percent of the remaining CMOs have plans to begin implementing something by the first or second quarter of this year, there are a final 20 percent that have no plans at all. At this point, it is critical to know which group your partner falls in, and, most importantly, how you can ensure you are not left behind this November.

Sizing Up Your Contract Service Provider

Implementing a serialization project in a facility that achieves compliance while still maintaining efficiency takes a lot of time. To make sure your contract service provider is on track for the November 2017 deadline, use the following tips:

  • Ensure a reasonable timeline has been established. With only 10 months to go until this year’s deadline and an average of 18 months to implement a serialization project, your contract service provider should be able to share a reasonable timeline for implementation that is also on track.
  • Measure actions against words. While your contract service provider may say it is creating and executing a plan for compliance, doing so requires the purchase of equipment, which means equipment purchase orders should be available. It is not unreasonable, and actually it is recommended, to ask to see them. An alternative plan must be created if purchase orders that align with the timeline cannot be provided.
  • Visit the facility to see what phase of implementation the plan is in. Go to the facility and observe the progress being made to determine if the necessary amount is being achieved. Unfortunately, with the ticking of the clock now getting louder each day, any contract service provider not already deep in the throes of preparation simply does not have enough time to become compliant.
  • Learn their plan for connectivity and data management. The November 2017 phase requires connectivity between trading partners and effective data management, which is to provide transaction information to trading partners in an electronic format. The product identifier on each drug package can then be used to verify a drug’s legitimacy and to eventually be used for product tracing in the event of a recall.  Connectivity plans are designed for the unique requirements of the drug sponsor company and, therefore, vary greatly.  We encourage you to ask questions about the service provider’s current partnerships and how they addressed the unique needs of each of them.  Do their examples reasonably align with your own organization’s needs?   

These tips can help with the overall assessment you will need to make to determine whether or not your contract service provider is ready for the November deadline. And the urgency to do so has never been greater. It is the sole responsibility of manufacturers to ensure compliance, not the contract service provider, which means it is up to you to protect your business from the fallout of non-compliance. While protecting your product used to be just a core competence for an organization, it is now part of a legislation that has the potential to halt business for unprepared drug manufacturers worldwide. Determining your plan now for serialization readiness can put the worries of DSCSA costs and timelines behind you and patient safety back where it belongs — at the forefront.

Nicolas Girard is the chief operating officer at Ropack Pharma Solutions, and Graham Clark is the co-founder of TraceLink as well as its director of worldwide channels. When learning the industry is unprepared to meet the DSCSA requirements of November 2017, Ropack and TraceLink, along with Optel Vision, worked together to develop an international serialization hub. The goal is to provide the industry with a solution that allows a pharmaceutical product to enter the market fully serialized with support from an experienced partner. Manufacturers not ready for the November deadline can have their in-house packaging team or contract partner send pharmaceutical products to the hub, where stand-alone serialization stations serialize, aggregate, and eventually ship products to their next location in compliance with DSCSA. The data connectivity through TraceLink provides product integration with many of the world’s manufacturers, including those in countries where serialization has already been adopted. The hub can be used as a temporary solution until a manufacturer has implemented its own serialization program or as a permanent solution that can reduce its capital expenditures.

To learn more about the international serialization hub, contact Paul DuPont at Ropack Pharma Solutions