Countdown to Cali-serialization

With limited manpower and resources, the CBoP aims to place accountability on the manufacturers by making them responsible for identifying which product is compliant so that they police themselves. For each January deadline, manufacturers must submit, by December 31st of the previous year, an official declaration that details which 50% of their product was chosen for serialization and by what technology it was serialized. Specifically, the regulation states that the declaration must include:

• “A list and quantity of dangerous drugs by name and product package (SKU) type representing at least fifty (50) percent of the manufacturer’s total that are ready for initial implementation of the serialized electronic pedigree requirements as of January 1, 2015;
• A statement identifying which one of the following methods was used to measure the percentage of drugs ready to be serialized: (i) unit volume, (ii) product package (SKU) type, or (iii) drug product family;
• A statement describing the calculation(s) used to arrive at the percentage figure of dangerous drugs ready for serialized pedigree requirements;
• A list and quantity of dangerous drugs by name and product package (SKU) type that are in the remaining percentage not yet ready to be serialized or subject to pedigree requirements; and,
• A statement specifying the technology employed to meet the pedigree requirements, including but not limited to any platform(s), vendor(s), hardware, software, and communication technologies deployed.”

Serialization solutions can be easily broken down into two choices. First, manufacturers can invest more up-front and implement an in-line technology to serialize packages as part of the production process. Implementing a technology in-line will be a higher initial investment but a longer term solution that could support the entire product portfolio. Second, the manufacturer could take a lower, up-front investment approach and have a third party do an off-line “slap-and-ship” to the packaged product. The term “slap-and-ship” describes the practice of placing a serialized label on an already fully packaged product, whether by a third party or internally after the product comes off the packaging line. While less invasive to the packaging line and less costly because of its smaller initial investment, this approach is not sustainable long term. Slap-and-ship becomes more costly in the long run – especially when it comes to fully serializing one’s entire product portfolio for any length of time after 2016, when the California regulation is in full effect.

Other Implications
Packaging: There are many decisions to be made here. A best case scenario is when building a new packaging line the company makes it “serialization ready;” otherwise, it is necessary to retrofit the existing line. It is a big help if you have a packaging line (or partial line) that can be used for prototyping, because one of the major issues is getting line-time to implement and validate the serialization functions when the line does not have much downtime.

Data System: The system used on the packaging line must then send the serial numbers for the packaging hierarchy to a data system that can store this information. Some pharmaceutical companies are known to use SAP Aii (auto id infrastructure) for this purpose. The system that is storing the serialization hierarchy also needs to be able to handle (or interface with) the needs of exception handling, and distribution and warehouse movements. Exception handling includes several types of movements, for example: rework, removing cases from a pallet, removing units from a case, etc. The requirements of warehouse movements typically focus on inventory adjustments and shipments to customers. This means tracking all of the serial numbers and creating new packaging hierarchies as the materials are shipped or moved to new containers.

Communicating with Trading Partners: Manufacturers need to follow the California pedigree regulations, but also need to be involved in industry groups and discussions with trading partners to determine requirements for communicating serialized data. For example, many wholesalers are requesting a serialized ASN (logistics), in addition to the ePedigree (legal). Additionally, there is much conversation in the industry about how the ePedigree should be delivered – there is the DPMS (drug pedigree messaging standard), which meets the California pedigree requirements and the newer network centric pedigree models. DPMS is a document based method (XML document with digital signatures), which will require huge amounts of data storage.

Network centric models for handling the pedigree hope to reduce the data burden and make handling the pedigree easier, but these models have yet to demonstrate the ability to ‘certify’ the pedigree; although, there is a lot of activity in industry groups and GS1 to try to make this model compatible with the CA regulations.

Validation & Inference: Again, there has been much discussion in GS1 and the industry groups as to what inference is and when it would be allowed. From the manufacturer perspective, it is critical that the electronic data match the physical world exactly. Specifically, what the manufacturer tells the 3PL and trading partners is contained in the shipment must match exactly or there will be problems downstream that may not be discovered until a box is opened or the shipment reaches the final customer.  Manufacturers rely on inference in distribution – they will tell the 3PL what to expect based on a serialized ASN and the 3PL will only scan the pallet level on inbound receipt. Therefore, if the manufacturer has provided incorrect data in the ASN, it will probably not be discovered until picking (or not discovered until the customer opens the box if a full case was shipped).