The Case for Pharmaceutical Serialization and Aggregation

What is pharmaceutical serialization?

By assigning a unique serial number to each pharmaceutical product, goods can be identified and tracked throughout the entire pharmaceutical supply chain.  Information including the product origin, shelf life and batch number could be identified and associated with the serial number, enabling track and trace through production to the patient.

For many years, there have been significant challenges with respect to drug adulteration and counterfeit drugs, causing risk to consumers.  According to the World Health Organization (WHO), over 700,000 deaths annually are attributable to counterfeit drugs and medicines.  Today, the pharma supply chain has become longer, more convoluted and often involves multiple countries and governing authorities.  With the extension of the supply chain, counterfeiters have more opportunities to create problems at each stage of the pharma supply chain.  Currently, the distribution network is complicated.  The journey of pharma products from manufacturer to consumer may involve drug products changing hands as many as 10 times!

Across the world, governments agree that implementing drug product serialization can help to significantly reduce counterfeiting of pharmaceuticals.  To do so, however, involves the use of technology and cooperation of supply chain partners. Authentication of each drug product as it travels through the pharmaceutical supply chain can only occur if the respective supply chain partners are all able to share data.  This requires relatively sophisticated technology and interfaces to multiple systems to access information in real time.

Merely generating unique serial numbers is insufficient.  Information regarding each unique serial number must be maintained in easily accessible systems so that partners working across the pharma supply chain have complete, accurate visibility and full traceability.  This effort requires collaboration between supply chain partners to record, track and manage the data from the point of manufacture to the point of distribution, the dispensing point where it finally reaches the patient.  Allocating a unique serial number to each package means that it is faster and easier to spot products that have been tampered with or that are illegitimate, potentially saving lives.

Before passage of the Drug Supply Chain Security Act (DSCSA) in 2013, there was no single rule for addressing drug security.  Consequently, each of the 50 states tried to solve the same challenges, each in its own way.  DSCSA supersedes state legislation, providing the United States with one unified federal legal framework to address supply chain security.  This is only the American part of the story, however.

Global Harmonization of Serialization

Currently, there is no harmonization between country-specific regulatory requirements involving serialization.  This makes cross-border pharma distribution complicated.  To help smooth the way forward, GS1 is working to gain traction on adoption of GS1 standards in Africa and Turkey.  GS1 noted that Latin America is moving ahead with the ANMAT programme for drug identification and China has made strong forward momentum with GTIN use.

The Impact of Serialization on Warehouses and Manufacturing Facilities

Before the implementation of DSCSA, serial numbers were not required to be placed on each individual drug package.  This meant that goods could be grouped into larger quantities for handling and packaging.  Serialization now impacts packaging lines.  This requires modifications, adoption of new software for data handling and may impact the integration of automation.  The implementation of serialization also can affect multiple company departments including engineering, IT, quality, information security and logistics.

Companies that use software to generate serial numbers should be sure that it operates simultaneously on multiple production lines at several sites.  It also will need to be adjusted to comply with country-specific regulations.

It is important to note that most pharmaceutical warehouse management software and ERP solutions were not developed to manage and track data below the batch level.  Some companies are relying on third party logistics providers for serialization services or “edge” solutions.  An “edge” solution is implemented to capture the receipt, movement and shipment information regarding serialized product so that it can update ERP and WMS, serialization repositories and/or EPCIS systems.

Learn More about Datex Pharmaceutical Warehouse Management System Here

IT departments should be forewarned that the amount of data which must be processed and archived to comply with DSCSA is huge.  Unit level serialization requires either 2D barcodes or GTIN barcodes.  Information regarding the assigned serial numbers and related data will need to be allocated, stored and communicated via local data management systems.  In case of damage, recall or an investigation, companies must be able to track at the pallet level to provide traceability to the drug manufacturer.

Software handles matters involving serialization in a variety of ways.  When it is necessary to share information such as product location and transaction information throughout distribution, it may prove challenging when supply chain partners are using different software systems.  

Currently, there is no uniform agreement to determine how data and databases produced as a consequence of track and trace activities will be managed.  At this point, there is no standard data format mandated by the FDA, however this may change if it is found that supply chain partners are experiencing difficulties in sharing data.

What is aggregation?

Aggregation provides the ability to construct a serialized relationship between the unique identifiers that have been assigned to packaging containers.  More simply put, aggregation facilitates that the identification of each serial number in a given package is associated to a master serial number for that particular container, creating a parent-child association of the serial numbers.  A warehouse worker would scan the label of a carton (the parent), for example and the aggregation function would group the multiple serial numbers of the individual saleable units (child units). 

Using the aggregation function, a warehouse worker could scan the barcode of a case to determine the contents.  This would save a lot of time by eliminating the need to open the case and scan each of the individual saleable units.  Using aggregation helps to facilitate the material handling process of serialized goods in manufacturing plants and warehouses and help increase efficiency across the entire pharmaceutical supply chain.

Data must be trusted for aggregation to be deemed reliable.  This means that if a case or quantity of saleable units is removed, the original relationship must be altered, disaggregated and then rebuilt in order to maintain the accurate parent-child relationship.

Benefits of Serialization

Implementing serialization provides drug manufacturers, contract manufacturers, warehouses and 3PLs with another source of data that can be used to monitor and improve processes across the shop floor and through the warehouse.  The data can provide key metrics such as lot number, expiration date, ingredients and more-all tracked by serial number as the goods traverse the various processes.  The distribution process can add even more data such as destination customer, shipping carrier and anticipated transit time.  Alerts can also be added to provide specialized handling instructions to help ensure quality and regulatory compliance.

The pharma industry loses an average of 4.5% of its potential revenue annually due to supply chain inefficiencies according to Interactive Data Corporation (IDC).  One factor is the issue of drug ownership changes, which often occurs multiple times across the supply chain before the prescription drugs reach the patient.

Serialization can aid in visibility, an issue across the pharmaceutical industry that can lead to drug product shortages, returns and recalls.  This undoubtedly raised costs for both healthcare stakeholders and pharmaceutical companies and can put patient lives at risk.  According to 2013 estimates prepared by Premier Healthcare Alliance, U.S. hospitals reported drug shortages of $416 million annually.

On a final note, reimbursement fraud is another issue that is likely to be impacted by serialization.  Using serialization will help stem the tide on patients collecting multiple prescriptions for the same drug and other fraudulent reimbursement claims.

Conclusion

We are living in a time of tremendous technological enlightenment and evolution.  Pharmaceutical companies are starting to use emerging technologies such as artificial intelligence, machine learning, predictive analytics and blockchain to aid in improving inventory management, life sciences supply chain management and quality control.  Drug manufacturers, contract manufacturing companies and others working on drug development, clinical trials, distribution and fulfillment across the pharmaceutical supply chain are now mandated to use serialization on U.S. pharmaceutical goods.

With the advent of DSCSA, the pharma supply chain and healthcare delivery system are now safer.  For many years, the drug supply chain has been plagued by counterfeit medications, gray marketing and drug adulteration.  Mandating the imposition of package-level serialization can help with authentication and provide valuable data that can be used to optimize operational processes and reduce fraudulent reimbursement claims.