Drug counterfeiting has long been an issue in the life sciences industry, and the problem has grown in severity over the past ten years. Because drugs are commercial brands, there is significant money to be made on the black market from counterfeiting big-name products. This can lead to heavy loss of revenue - a WTO estimate places the figure at 200 billion per annum - and, more seriously, millions of deaths each year.
"The problem with counterfeit pharmaceuticals has been increasing rapidly," says Torben Vogt, life sciences industry expert at IT consultancy NNIT. "Obviously it's a serious concern both from the healthcare authorities' and the regulators' point of view."
Luckily, the situation is under scrutiny. Over the coming years, serialisation legislation will come into effect in all major markets - a measure expressly intended to minimise counterfeiting and, most importantly, save lives. All life sciences businesses will be required to place a unique serial number on each pack of drugs, which can be machine-read at the point of sale. Some countries already have active legislation in place, for instance China and Turkey, whereas the US and EU markets will be called for compliance by 2015 and 2017 respectively.
"Because they are serialising every individual pack, there will be a clear opportunity for increased supply chain transparency all the way to the point of sale."
"Many large pharmaceutical companies have had serious counterfeit issues with some of their major brands," says Vogt. "Not only has that taken away revenue, it's also been a legal risk. So, apart from patient safety, they have two purposes - one is to reduce the risk for legal action and brand erosion, and the other is to recapture some of the revenue that the counterfeiters took away."
In theory, their task is simple. Serialisation involves recording and tracking drugs on the individual item level, allowing pharmaceutical companies to follow the product along the supply chain. In practice, however, it involves multiple players and a large quantity of data, imposing significant challenges. What is more, any new regulation is apt to disrupt business on some level. Making the necessary tweaks takes time and money, requiring companies to implement new software and set new business processes in motion. Serialisation is no exception - it means that standard operating procedure and equipment, as well as packaging and warehouse processes, need to be changed.
These difficulties are compounded by the risks of noncompliance. "If companies rest, thinking that this will not hit them, then they risk losing the licence to operate or facing heavy fines from the authorities," warns Vogt. "In California, some indicate a risk of fees up to 5,000 for each pack not serialised. It's a tremendous amount of money."
So how can organisations make the best of the situation? In Vogt's view, they need to start viewing the change less as an inconvenience and more as a space of opportunity. "Companies will be forced to make significant investments, but from a management point of view they will be looking at how they can use these investments to gain more efficiency throughout the supply chain," he says. "Because they are serialising every individual pack, there will be a clear opportunity for increased supply chain transparency all the way to the point of sale. This will enable them to become more effective in planning their inventories, their supply and their distribution.
Companies will have the chance to improve their business case by integrating different systems - taking those that produce the continual feed of data, and fusing them with sales and production. They can plan in greater detail for a longer time period, optimising logistics and minimising error. They will also see benefits in their own manufacturing processes, with greater stringency across their systems of in-line process control.
Another clear advantage is that recalling products will become easier. In times gone by, recalls were hugely expensive - companies were forced to retract a whole series of batches in the case of a problem, sending out a widespread announcement specifying the faulty batch numbers. With serialisation, matters become far more surgical. Companies recall only the packs affected, making the process cheaper, more discreet and more controlled. Then there's the fact that barcodes provide a good place to add value. "If you have to print a 2D barcode, why not put in more information than just the serial numbers, the expiry data and the dynamic batch data that you are legally required to?" asks Vogt. "You can input information around your product, including instructional videos for patients that can be watched on a smartphone. So it will be a branding and marketing opportunity in future." In addition barcoding of all packs will facilitate more effective reporting of adverse drug effects by the patient and the doctors alike.
"You can input information around your product, including instructional videos for patients that can be watched on a smartphone."
As a global IT consultancy specialising in the pharmaceutical sector, NNIT is perfectly placed to help on all these counts. Together with its sister company NNE Pharmaplan, the company offers the full range of services related to a serialisation project. Beginning with a business analysis, it then implements a tailor-made, endto- end solution, combining the regulatory road map for serialisation with the pharmaceutical company's existing packaging infrastructure. Companies can reach full compliance within the space of two years.
"We have what I believe is a unique value proposition," says Vogt. "NNE Pharma Plan are experts within the area of manufacturing, and NNIT are experts in the area of integration and corporate IT systems. Those two need to go hand in hand to implement the most effective solution."
The package of services provided is known as 'Track & Trace'. Comprising programme management and application outsourcing, amongst others, this project offers full-service global serialisation consultancy, programme management, implementation and application outsourcing. As such, it goes above and beyond the scope of the legislation. "The start point and the end point in a drug's life cycle are defined from a regulatory point of view, but what lies in between is where the benefits are," says Vogt.
Because the supply chain is complex and fragmented, especially where subcontractors are involved, life sciences companies generally struggle to provide a continuous real-time flow of information. They tend to use disparate IT systems and complex interfaces, which can make it hard to collate and compare data.
With a cloud-based system, data sharing becomes a far simpler task. Even where formats are different, internal and external IT systems can easily pool information in the cloud. A loosely coupled cloud-based reporting tool is therefore an ideal platform for implementing changes to the supply chain - simple, flexible and highly absorbent to change.
Because NNIT has such deep roots within the life sciences industry, it can guide clients through their serialisation projects in all their complexity, while fully acknowledging all the hurdles they might face along the way. It offers a deeply analytical business proposition that helps companies position themselves better in the market. The corollary is a speedy return on investment.
"We have a unique insight into the domain, which benefits our customers immensely" says Vogt. "Pharma is in our DNA."