Seeking value in serialization16 August 2022
The concept of serialisation was primarily a response to the counterfeit drug challenge of the early 2000s. Though technological advances and regulatory development never fully resolved this problem, the tools pharmaceutical companies employed have delivered value in other areas, and serialisation can do more than simply appease the regulators. Jim Banks speaks to Courtney Soulsby, global director, healthcare sector at British Standards Institution (BSI) to find out how pharma companies can leverage serialisation to extract business value.
Over the years, the growth in counterfeit medicines in the supply chain has been a tangible threat, not only to patient safety, but also the profitability of pharmaceutical companies. According to a report by Statista in 2020, the market for counterfeit prescription medicines resulted in a loss of $200bn to the industry. That kind of financial loss, the report notes, may prevent as many as 13 new drugs from coming to market each year. Furthermore, the US National Crime Prevention Council estimated in 2021 that more than 10% of all pharmaceuticals in the global supply chain are counterfeit. One of the key weapons in the fight against fake drugs is serialisation, which requires the placement of unique markings – principally batch and lot numbers – on primary packaging. This provides the visibility to highlight the presence of counterfeit drugs or the diversion of real medicines from their intended destination. Whether they are in the form of barcodes or radio-frequency identification (RFID) tags, these markings can localise a specific item along its passage through the global supply chain.
“I’m a supply chain traceability expert, so I understand how to leverage serialisation, and I agree the driver was to achieve visibility into where medicines go and, as a side benefit, to allow companies to see if it is counterfeit or legitimate,” says Courtney Soulsby, global director for the healthcare sector at British Standards Institution (BSI).
“From the perspective of legislation, which came in over a decade ago, it took the industry a long time to comply and get a Global Trade Item Number (GTIN) and batch number of every product on the packaging. It takes a lot of work to comply in an effective way,” she adds.
BSI exists to shape, share, support and assess industry best practice, and for 120 years it has equipped organisations with the tools and techniques they need to turn today’s challenges into tomorrow’s opportunities. Working globally, it has specialist expertise spanning a range of sectors, including healthcare, to deliver services and solutions to make organisations worldwide more trusted and resilient. Soulsby helps organisations to understand and correct the risks and vulnerabilities that exist in their global supply chains and their internal business functions. She has an in-depth understanding of the challenges faced in every healthcare vertical, from hospitals to pharmaceuticals, and supports organisations in developing the best approach towards business growth and the management of risk.
In that role, she has been able to see the effect of serialisation not only on limiting the number of counterfeit drugs on the market, but also its potential to drive operational change.
“In the past five years, there has been a sense of looking at what we can do with the information that is on the packs of drugs being shipped across the world,” she remarks. “Technology has advanced more than the industry has been able to digest and serialisation has been the foundation of many advances. Putting batch and lot numbers on the packaging doesn’t solve the problem. It is a question of what you do with that information.”
Data opens the door to visibility
Having a large amount of data on the position and movement of drugs throughout a global supply chain does not, by itself, yield meaningful insight. It is the analysis of that data that can inform valuable operational decisions, and the first step in effective analysis is identifying the right questions to ask.
So, to what use can the data provided by serialisation be put? The most obvious answer is the creation of more transparent supply chains. Serialisation infrastructure, including the ability to record and analyse data about the location of a specific package within the supply chain, can not only be a powerful tool in combating counterfeiting and diversion, but can also support automation in inventory management and help companies to optimise inventory levels and avoid shortages of key medicines. Another key question to ask of the data provided by serialisation is whether a medicine has been properly transported in adherence with the required environmental conditions. Supply chain data on storage and transportation conditions can, for example, be used to monitor any deviations from optimum storage conditions, principally temperature excursions in the cold chain.
“Serialisation supports important insights, such as whether a medicine is in the right market or has been diverted, whether it is legitimate, whether it has been tampered with and whether temperature control has been maintained throughout the chain of custody,” says Soulsby.
The market loss of counterfeit prescription medicines to the pharmaceutical industry.
“There are even benefits in terms of sustainability,” she adds. “It can track the proper disposal or reuse at the final point of administration. And it can give an understanding of utilisation of medicine by patients, and that is important for projects we are working on concerning access to medicine in the developing world.”
Better visibility along the supply chain can help to determine, for example, whether donated medicines are being used by patients. “Right now, pharma companies don’t know that,” Soulsby continues. “The technology exists to track that, but we need all of the actors in the supply chain to be involved.”
The biggest challenge in getting these insights from the mass of serialisation data generated within the industry is the sheer complexity of the global supply chain. Between the manufacturer and the patient lie many shippers, logistics providers and healthcare professionals, through the hands of which every drug must pass.
“We have a few outputs from projects in the industry that offer concrete uses of data, but multiple actors in the supply chain are responsible for drugs at different points, so the collection and maintenance of data must be looked at before we get into analysis and deriving insights from the data,” Soulsby explains.
“Right now, there is an issue with the interoperability of data, which is collected from many logistics companies and warehouse management companies,” she adds. “There are some pharma companies that have embedded track and trace systems or temperature monitoring systems, but they are struggling to connect that to the risk-based analytical information they would like to glean from that.”
More than this percentage of all pharmaceuticals in the global supply chain are counterfeit.
US National Crime Prevention Council
Tracking with technology
Gleaning useful insights from data is proving difficult, though the data itself is abundant. One reason is that internal silos still exist within many pharmaceutical companies. Serialisation data may, for example, highlight a medicine that ends up in a certain country, but the data never reaches the anti-counterfeiting team or the quality group to verify whether it is a legitimate shipment, or that it has been kept within the right temperature range while in transit.
“There is also the issue of accountability,” Soulsby remarks. “The manufacturer has responsibility to a certain point, then it passes to the wholesalers, the distributors, the logistics companies and so on.
“Personally, I believe that one party should have responsibility until the drug reaches the patient,” she adds. “There is a need to take data beyond the remit of responsibility, even when legal responsibility for oversight has passed to something else. There should be no breaks in the chain where counterfeit drugs can enter, or temperature ranges can be exceeded.”
So, what is needed to help pharmaceutical companies make better use of the data on the medicines they ship? Removing the walls between internal silos is part of the solution, but technology is the other part. Soulsby, who is soon to give a talk at the World Economic Forum on blockchain technology, believes that the tools are available but need to be embedded into the supply chain. Blockchain, for example, can create a secure ledger of the serialisation elements that are scanned and recorded at various links in the supply chain, creating a complete audit trail of a drug’s journey. This ledger can also include information from sensors to track environmental factors, such as temperature and humidity.
“We are still in the early days of using artificial intelligence (AI), machine learning (ML) and blockchain, but these technologies will play important roles,” says Soulsby. “Blockchain to secure the point of origin and authenticity of that data is important, then AI and ML can be overlaid to make conclusions at scale.”
“We also need data interoperability – connecting inventory systems to logistics, road network or air cargo handling systems to have the required level of visibility,” she adds. “The pandemic has highlighted the age-old need for visibility at the household level – supply chain shortages made headlines – but it has been an issue for many years. Now the media is picking up on it and pharma companies have brands to protect, so I’m seeing board-level shifts to understand distribution and to invest in technology.”
Serialisation was the first step on the road to reinventing the concept of visibility in the supply chain, but there many organisational and technological changes that remain to be made if pharmaceutical companies are to have a complete view of their products as they make their journeys across the world.