One, Two, Three: Making the Most of E-Pedigree … Compliance

Pharmaceutical manufacturers should think beyond California as they evaluate and implement serialization strategies.

By Scott Pugh, vice president, Solution and Service Innovation, Verify Brand

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California’s electronic pedigree (E-Pedigree) law is approximately a year and half away from its first implementation deadline. The law, which is pushing most of the pharmaceutical industry to adopt a point-to-point chain-of-custody model for prescription drugs, is designed to protect the state’s legitimate supply chain from the infiltration of potentially harmful counterfeit drugs. 
 
Pharmaceutical serialization and authentication regulations aren’t new. A similar law is already in place in Turkey – albeit with a different messaging and reporting model than what’s proposed in California – and several governments around the world are working toward the adoption of anti-counterfeiting or supply chain security laws for the pharmaceutical industry. This includes China, Argentina, India, Nigeria and the European Union.
 
Manufacturers focused solely on the U.S. market may be tempted to adopt a solution that is designed to specifically comply with California's E-Pedigree law. This approach may indeed keep their product flowing into California, but the narrow-sighted scope may create challenges down the road as the number and complexity of serialization and traceability regulations increase.

Any manufacturer that wants to be active in global markets will need to have a flexible serialization solution that can meet varying standards and requirements. Furthermore, manufacturers should understand that countries' regulations will more than likely evolve over time, making flexibility in their serialization solutions all the more important. Lastly, serialization doesn’t have to only be an expense – it can help manufacturers improve efficiencies and realize savings.
 
Following are three primary factors pharmaceutical manufacturers should consider as they develop serialization strategies for California and beyond:
 
1. One Approach for Multiple Governments
Pharmaceutical manufacturers initially approached laws in separate countries with one-off approaches for each country. They worked with local, in-country solutions providers to help meet requirements, ensure compliance and keep products flowing into that market.
 
The growth of regulations and the varying complexity that comes with each new law is driving pharmaceutical companies toward a new approach. This includes automating the creation and receipt of messages, while connecting to government agencies or supply chain partners through a single, centralized, cloud-based platform to simplify compliance.
 
This approach will greatly reduce the burden for internal compliance, IT and supply chain personnel when compared to using a one-off approach for each country or regulation.
 
2. Sequential Vs. Random
Some pharmaceutical manufacturers are deciding to use sequential numbers in their serialized codes despite some major drawbacks. For example, if counterfeiters get their hands on even a small number of products that use sequential codes, they could be capable of producing large quantities of fake product with ‘valid’ serial numbers. 
 
Randomized codes make it virtually impossible for a counterfeiter to replicate large quantities of ‘valid’ codes. A counterargument might be that the counterfeiter can reproduce a legitimate code several times, but with the proper tracking tools in place, that will only increase his or her likelihood of being caught. This happens because the traceability data can point to exactly when and where the counterfeits first appear in the supply chain.
 
3. Return on Investment
Manufacturers tend to value serialization in terms of their ability to meet regulatory requirements. Yet serialization solutions offer numerous benefits to manufacturers beyond compliance.
 
Product recalls are a great example of the broad value of serialization. Recalls can be a significant undertaking for manufacturers when they can't differentiate the origin, or final destination, of their safe drugs versus those that need to be recalled. Serialization gives manufacturers a more granular view into their operations to pinpoint which line or production run resulted in products that need to be recalled. This can greatly minimize the scope of recalls while increasing operational efficiencies.
 
Additionally, there is tremendous potential to leverage data from serialization for business intelligence benefits. The serialization data can be pulled from across a manufacturer's operations – from manufacturing to distribution to the supply chain – to discover issues like process bottlenecks or inventory shortages. Manufacturers can even use serialization data to better understand carrier and workforce efficiencies – such as productivity comparisons between teams, vendors or locations.
 
Where to Begin?
Keeping up to date with the developments of a single regulation, such as the E-Pedigree law, and each requirement within the regulation can be a daunting task for pharmaceutical manufacturers. This is complicated at an exponential rate when companies have to monitor the multitude of regulations being developed around the world. 
 
Manufacturers can turn to serialization and supply chain visibility solution providers to help them formulate and implement the right serialization strategy. Additionally, many serialization and supply chain visibility vendors also serve as consultants or advisors to help manufacturers navigate their way through the increasingly complex maze of serialization and traceability regulations.

 
Scott Pugh is vice president of solution and service innovation at Verify Brand. 
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