From dirty water to chalk powder, dust to floor wax, the list of ingredients found in supposedly authentic medicine continues to grow in number and peculiarity. While some might be innocuous, many are outright dangerous; according to the World Health Organisation, one in ten medicines in poor countries are now counterfeit, costing the lives of hundreds of thousands of people every year.

“Every market around the world has been affected by the scourge of counterfeit drugs,” says Pasi Kemppainen, management adviser, serialisation and traceability at Japanese pharmaceutical company Santen. “Though the nature and severity of the problem is slightly different in each market – from Europe and the US to Asia and Africa – the danger is everywhere. While public awareness of fake medicine remains low, in recent years, regulators around the world have paid an increasing amount of attention to the subject. Among the countries and regions that have now adopted or are set to adopt requirements for serialisation, and track and trace are Argentina, Brazil, the EU, India, South Korea, Saudi Arabia, Turkey and the US.

Two of the most significant regulations – the US Drug Quality and Security Act (DQSA) and the EU Falsified Medicines Directive (FMD) – have deadlines approaching in the coming months. But research suggests a large number of pharmaceutical companies operating in these markets remain dangerously unprepared.

In January, a study by TraceLink, a leading vendor in track and trace, and pharmaceutical serialisation solutions, found that, as of mid-2017, just one third of 146 pharmaceutical companies surveyed believe they are “very ready” for DQSA (November 2018) and FMD (February 2019) deadlines.

Traditionally, manufacturing was separated from the enterprise IT, but new regulations mean serial numbers must be reported to the enterprise IT system and onwards to the regulatory systems.
– Pasi Kemppainen

“These survey results are startling,” said Shabbir Dahod, president and CEO of TraceLink. “Despite goodwill and efforts by the industry and regulators to meet compliance requirements on time, the industry is extremely behind in being ready for serialisation. In 2018, as we reach the final hours of serialisation in both the US and EU, the industry-wide lag in full serialisation implementations remains a concern and emphasises the criticality of trade partner connectivity within the supply chain.”

According to the TraceLink research, small and midsize companies with less financial and human resources are particularly at risk of failing to comply. This could have a major knock-on effect on the wider European pharmaceutical market, adds Kemppainen.

“The SME sector employs a lot of people and it is considered to be the growth area of the European pharmaceutical market,” he says. “If they are at risk, the growth of the pharmaceutical industry in Europe at large is also at risk.”

Choose the right one

Implementing a serialisation, and track and trace solution is not easy. While regulations vary from country to country, most require companies to encode every medical product, package, box and pallet with unique serial numbers that can then be tracked by an appropriate data structure. In large companies, this will often take place across multiple packaging lines, from vials to blister packs, and in numerous locations.

“This area is completely new,” says Sai Mungara, senior director of serialisation at Indian multinational pharmaceutical company Dr Reddy’s Laboratories. “Nobody has had experience from the past that they can leverage today. It is going to involve a huge number of transactions: literally millions of serial numbers need to be transported across the various supply chain partners.”

Among the biggest challenges, Mungara adds, is choosing the right IT architecture.

“There are several ways you can implement this,” he says. “Take the serial number itself: do you want it centralised or decentralised? Do you have multiple plants across various locations? How do you want to integrate all of these lines? Do you want to have a separate line system integrating with a central system? All of these questions around the IT systems are very important and you have to have an extremely clear strategy in place.”

According to Kemppainen, integrating new serialisation, and track and trace solutions into existing IT systems, such as manufacturing execution system (MES) and enterprise resource planning (ERP), or changing and adapting legacy systems, is the key “pain point” in the entire compliance process. “You need to bring in new kinds of IT systems for managing the serial numbers and managing data exchange with your supply chain networks,” Kemppainen says. “Then you need to integrate them with your legacy systems, which do not support those capabilities because there was no need for them before. You also need to make sure changes in manufacturing systems, such as putting serial numbers on products, are reflected in ERP systems because that is an entirely new capability.”

Key integration

The regulations also require an unprecedented level of integration between internal and external IT systems. Manufacturing systems, for example, must be connected to enterprise IT; enterprise IT must be connected to regulatory systems; and the pharmaceutical company’s trading partners – from CMO suppliers to wholesalers and customers – must be integrated together too.

“It requires a massive level of integration and interoperability,” says Kemppainen. “Traditionally, manufacturing was separated from the enterprise IT, but new regulations mean serial numbers must be reported to the enterprise IT system and onwards to the regulatory systems. It also requires us to have integration from the pharmaceutical organisation to the external stakeholders we are doing business with. And remember, you need to scale this across multiple different stakeholders, many of whom will have different kinds of systems. It is a lot of work.”

These challenges are further compounded by variations in the regulations that different countries are currently pushing through. Mungara offers the example of expiry dates that are printed onto drug products. “In the US, they specifically want us to put the date of the month, whereas in Europe they aren’t bothered about the precise day. It is just an example, but some of these different requirements are putting a heavy load on IT systems in manufacturing organisations. They need to comply with every regulation where they want to be able to successfully sell their products.”

Earlier in the year, Russia announced that two-dimensional crypto-protected barcodes – a new way of serialising products – will become mandatory for drug makers operating in the country by 2020, another example of how testing and variant serialisation regulations can be.

“It is not that you implement this once and then you have full readiness globally,” says Kemppainen. “Whenever you enter a new market, you start from scratch; it is always a completely new project. Once you are ready for the US, you need to finalise your plans for the EU, for Russia, for China, for South Korea and so on. You end up having more costs and more investments when you enter the new markets.”

Given how highly regulated the pharmaceutical industry is, any changes to manufacturing processes also have to go through a vigorous and often costly validation process, adds Mungara.

“The change management is a very critical aspect,” he says. “Every change has to be thoroughly validated before it can be implemented. The overheads of this in the pharmaceutical industry are extremely high.”

Stay ahead of the game

For Kemppainen, implementing a successful IT strategy involves four basic components. First, understanding what the regulations require and what the company has and does not have from an IT point of view. Second, building an execution plan that takes into consideration key issues like connectivity and integration. Third, choosing a partner who already has a track record of delivering solutions relevant to the size and requirements of the company in question. And fourth, developing the market and regulatory intelligence to stay ahead of the game and be a leader in the field..

“Be ahead of what is coming next,” says Kemppainen. “That is how you will be able to manage the expectations in your own organisation. This is a very expensive process and it is not a one-off. There will be more markets that you need to be in compliance with, bringing more costs. The better you are able to manage these expectations, the easier it will be for you.”

The change management is a very critical aspect. Every change has to be thoroughly validated before it can be implemented. The overheads of this in the pharmaceutical industry are extremely high.
– Sai Mungara

BYO competences

With deadlines looming and software vendors stretched for time, Kemppainen says that pharmaceutical companies should build their own competences once the IT implementation phase is completed.

“You need to engage your own employees and people as much as possible in supporting the implementation so that you are not overly dependent on the vendors,” he says. “Getting their support will be challenging because there are a lot of other customers out there who need them right now. If you do not have internal competency to do that you will have big problems further down the line.”

Something similar applies to the limited number of companies manufacturing hardware solutions, adds Mungara. “There is a mad rush to get the attention of the service providers and make the changes you need to your manufacturing line,” he says. “Unfortunately, the number of companies manufacturing that equipment is quite restricted and huge demand is being placed on them.”

The time is now

With all the challenges facing the industry, Kemppainen says that now is the time to act if pharmaceutical companies want to comply in time for the US and EU deadlines.

“It is business-critical,” he says. “If you don’t have a readiness plan already being implemented, you won’t be in compliance with the regulators, which means that you won’t be able to supply your products to the market.”

While serialisation may not be the silver bullet in tackling the counterfeit drug trade, most accept it will help secure the supply chain in the coming years – improving patient safety and the integrity of the wider pharmaceutical industry.

“It is complicated but it is being done to protect the interests of genuine companies like ours,” says Mungara. “This is crucial.”