Compliance Management

Serialization: 2017’s Savvy Essential

A “must-have” for compliance, serialization may help pharma’s wallet

By Karen Langhauser, Chief Content Director

Last month I walked the show floor at Pharma EXPO, executing my usual tradeshow-technology-trend spotting. It was difficult to advance more than 10 feet without hearing or reading the world “serialization.” I’m fairly certain serialization could have had its own hall at McCormick Place.

And perhaps the attention is warranted given the timing. The November 2017 DSCSA compliance deadline, after all, is a federally mandated requirement. The DSCSA will require all prescription drugs in the U.S. to have unique serial numbers to enable track and trace. This marks the first time that many pharma manufacturers and supply chain partners will have to implement serialization and manage serialized product inventory, though many are ahead of the game. This regulation means new systems and processes that need to be understood by every department — from Packaging to Quality Control to Engineering. According to Brian Daleiden, vice president, TraceLink, “Serialization and the management of serialized inventory fundamentally changes how your company conducts business.”

While the intended goal of DSCSA is patient safety, much has been written of the long-reaching benefits of supply chain visibility for pharma. However, is there a quantifiable business case for serialization? There’s the obvious answer here in terms of counterfeit drug costs. Given the black-market nature of counterfeit drugs, putting a price tag on losses isn’t easy, but the World Health Organization estimates that pharma loses nearly $40 billion each year globally due to counterfeiting. While serialization can’t prevent counterfeiting, it will make it more difficult and also speed the rate in which counterfeit products are detected.

Various conversations on the show floor were geared toward serialization ROI. For example, serialization data can considerably help traditionally fraud-prone process areas, such as returns and chargebacks — these areas tend to lack product authentication capabilities, which often leads to fraud and general inefficiencies. Here, serialization can help eliminate duplicate payments on refunds, and help distinguish genuine products from the counterfeit products that sometimes are returned — as well as determine the price point at which products were sold.

Companies can also potentially use their serialization infrastructure as an additional source of real-time inventory data to optimize inventory levels and eliminate stock-outs. The recall process, when necessary, can be tightly targeted and specific, and thus smaller in size. Recalled products could — if desired — be returned directly to the manufacturer, rather than taking a reverse trip through the entire supply chain, thus lessening the opportunity for exploitation or diversion.

It would seem as though there are, in fact, multiple benefits of serialization that can be leveraged in ways that are financially beneficial to the pharmaceutical industry. I’m interested in continuing the conversation. Do you think serialization will have a profound impact on the way pharma does business or is it more akin to that stuffy expensive suit that you wear when you have to, but otherwise keep hidden in the back of your closet?