Can Drug Manufacturers Find Business Benefits in Product Serialization?

John Danese, Oracle’s Director of Product Strategy, provides an update on the electronic pedigree landscape and how manufacturers are doing in their serialization efforts.

By Paul Thomas, Senior Editor

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PhM: What does the e-pedigree landscape look like today from a regulatory standpoint? While “California 2015” hasn’t changed, are there still global shifts taking place?

J.D.: California is by no means the only place looking to drive the industry toward serialization and track and trace. The FDA has become much more vocal in its advocacy of drug product serialization, ePedigree and track and trace. For instance, in March of 2010, the FDA released a guidance for a Standardized Numerical Identifier (SNI) for prescription drug packages. In June, the Joint Strategic Plan on Intellectual Property Management was tasked with developing a strategic plan that would coordinate the efforts of various federal agencies for all types of counterfeit or intellectual property theft issues. This document specifically calls for “mandated use of Electronic Track and Trace for Pharmaceuticals and Medical Products...which allows for authentication of product and creation of an electronic pedigree for medical products using unique identifiers for products.”

Most recently, the FDA is organizing a public workshop on Feb. 15-16, 2011, on “Determination of System Attributes for the Tracking and Tracing of Prescription Drugs.” Serialization and authentication of drugs is also a common thread in the regulatory mandates that are evolving in EMEA, with several countries requiring some form of serialization already. Italy, Turkey and Belgium, and the European Commission and an industry consortium called EFPIA are working on pan-European strategies. Brazil has delayed its drug anti-counterfeiting regulation a couple of times, but now plans to implement serialization and track-and-trace requirements in 2012. In Asia, India’s commerce ministry has announced recently that it plans to make barcodes and digital mass-serialization compulsory for pharma exports. We are also seeing interest in China for the same, as they try to polish their image.

PhM: Where are manufacturers in their pedigree/serialization readiness, as compared to, say, one year ago?

J.D.: It was just about a year ago that many manufacturers were just starting to think about moving forward with planning and budgeting for implementing serialization projects after they had reallocated resources to other projects following the 2008 delay of the California ePedigree legislation. Since then, we’ve continued to see manufacturers move forward with strategic planning of what their solution options are and what implementations will cost.

PhM: What hiccups or unforeseen hurdles are they encountering as they develop global programs?

J.D.: There are a few areas that present challenges, including the absence of established standards, different regulatory models evolving globally and the need for cooperation in sharing product movement data across supply chain partners.

PhM: One hope has been that e-pedigree and product serialization will not be regulatory burdens but rather essential components of healthy brand security and supply chain strategies. Are you seeing this among drug manufacturers?

J.D.: Yes. Manufacturers are looking for and finding business benefits from product serialization. There are companies, which are early adaptors of serialization, that have achieved benefits such as identifying sources of product diversion in their supply chain and more targeted product incident reporting. Other areas in which manufacturers are looking forward to realizing business benefits include increased visibility and control of pharmaceutical distribution; improved reconciliation of recalls, returns and chargeback rebates; cold chain tracking; and improved patient safety with improved REMS compliance. However, when the question comes up whether industry would be adopting serialization were it not for the regulatory mandates, the answer ends up being no. Industry has to become compliant and is now finding a silver lining.

PhM: Last spring, I wrote: Currently, there’s no single and easy way to do electronic pedigree with serialization, since the decisions that need to be made—where to initiate a pedigree, how to reconfigure packaging lines, what software to use, how to integrate with one’s enterprise systems, and how to establish greater visibility and cooperation between supply chain partners—differ by product and market.“There are no standards. It’s a manufacturer’s nightmare,” [Maxiom’s Scott] Dicks says. What’s your take on this? Has the situation improved? If so, in what areas?

J.D.: GS1 has solidified its position as the leading standards body driving data and communication standards for supply chain data sharing and most global companies are moving toward adoption of GLN, GTIN, EPCIS and serialization standards. However, the problems of differing regulatory requirements evolving in different geographies (for example: ePedigree in the US, authentication at point of dispensation with centralized regulatory serial databases in Europe, hybrid requirements with government-issued codes and centralized tracking in Brazil) continue to exist. In the U.S., however, there is hope that the FDA’s increased involvement will lead to a set of centralized requirements in the U.S., rather than differing rules state by state. Twelve months ago, this did not seem to be the direction, and it would be a huge improvement for industry in this country. And, as solutions are implemented, more visibility and cooperation across the supply chain is required to bring desired business benefits.

PhM: You told us last year that CMOs will see e-pedigree and serialization experience as a competitive advantage. Has this been borne out?

J.D.: This model is still being discussed, but it’s certain that these serialization and ePedigree mandates are forcing the brand owners to increasing rely on the abilities of their CMOs to serialize at the line level and exchange data with them and downstream supply chain partners, including 3PLs and the distributors and wholesalers. Undoubtedly, the CMOs who are best prepared to address these new requirements will be best positioned to serve the market.

PhM: Can you remind us why Oracle decided to keep Oracle Pedigree and Serialization Manager “ERP-independent”, and is this part of a broader trend for solution providers to offer products that better integrate with various IT systems?

J.D.: There are many reasons Oracle Pedigree and Serialization Manager has to be built as an open application. It has to integrate not only with ERP systems, but also with packaging execution and warehouse management systems, as well. Another reality is that outsourced manufacturing and packaging is increasingly prevalent in the industry, so product serial data communication must occur between brand owner, outside packager and 3PL, so it has to be open.

PhM: That said, are there added functionalities or improved ease of use for those running Oracle’s E-business Suite?

J.D.: We are providing a productized integration layer between Oracle Pedigree and Serialization Manager and Oracle E-Business Suite. This will reduce the time and cost of implementation, and reduce cost of ownership, complexity and risk for customers utilizing this integration.

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