Making the case for the strategic outsourcing of serialisation

Published: 8-Oct-2018

Global track and trace laws have forced a well-publicised and dramatic sea change in the pharmaceutical industry

However, despite the industry’s recognition of the potential challenges posed by serialisation, a significant number of businesses have failed to react adequately. Companies that should have developed and implemented a clear strategy for compliance well in advance of the EU’s Falsified Medicines Directive (FMD) and Drug Supply Chain Security Act (DSCSA) have delayed preparations to the point whereby they now risk missing the respective deadlines. Any organisation that is not well under way with the implementation of its serialisation programme will now struggle to acquire the necessary equipment, let alone introduce and validate a solution in time.

These delays are often a result of inadequate resources or limited access to the expertise required to deliver a compliant solution. The pressures of compliance have also prevented many companies from exploring some of the added value services that should come together with serialisation. Whereas the DSCSA mandates aggregation, the FMD does not … and many pharma operators in the EU are neglecting it as a result.

It is these challenges that are leading many companies to look for third-party contract providers to outsource their serialisation requirements to. Here, Daniel Tedham, Managing Director of Wasdell Manufacturing, a division of the Wasdell Group, discusses the benefits of outsourcing serialisation and the importance of investing in aggregation now.

Preparation for compliance

Serialisation has been the pharmaceutical industry’s biggest challenge for some time; it’s a resource intensive, complex and time-consuming process. Beyond investing in hardware that can add data matrix codes to packaging, there are numerous additional considerations, such as data management and secure exchange, as well as establishing connections with partners and other necessary organisations to ensure compliance.

A number of companies throughout the pharmaceutical supply chain have underestimated these requirements and are now exploring alternative routes to meet deadlines as a result. Many are now looking to outsource the process to contract packing partners that already have the capabilities and expertise required to perform serialisation for them. Some manufacturers that do not count packaging as one of their core competencies opted for this approach at a much earlier stage to offset some of the cost implications of buying and installing new hardware and IT infrastructure. Similarly, they also negated the costs associated with training staff and the production downtime required to equip lines. When you combine these factors, it is easy to see why this outsourcing approach is appealing to late-starters in the push for compliance and, as the deadlines loom, this trend is expected to continue.

Ultimately, it is for the benefit of the entire pharmaceutical industry that every business is compliant — the network of partnerships throughout the supply chain is simply too vast and far-reaching for there to be any missing links. Once businesses have implemented and validated a solution, they should be working with their partners, collaborating with other members of the supply chain and sharing knowledge to ensure their entire supply chain is compliant. They can then look to make the most of their serialisation investment by exploring the additional opportunities presented by this increased level of supply chain visibility.

Future-proof serialisation solutions: investing in aggregation

Beyond the core serialisation requirements, businesses should consider implementing or partnering with companies that offer aggregation. Although not mandated by the FMD, there is a business case to invest now to future-proof operations against any amendments to regulations during the coming years. In addition, organisations operating on a global scale — or that aspire to do so — will no doubt be required to have aggregation capabilities — as it is required in many markets, including Turkey, China, Brazil and Russia. It will be required by the US DSCSA in the next 5 years. In addition, India, Pakistan and Egypt also intend to mandate it in their pending laws.

The EU’s point of dispensing (POD) model, in which a drug product’s authenticity is only verified when a prescription is filled, has been designed in such a way that negates the need for aggregation. As a result, many pharmaceutical companies operating in the EU have decided not to invest at this stage. This may prove to be a false economy, however, as some industry commentators believe that aggregation will be required in the EU in the future, creating a strong argument to invest in this capability now.

Implementing aggregation retrospectively is significantly more expensive than doing so alongside serialisation, so there is also a commercial argument. Most big pharmaceutical companies are choosing to implement aggregation alongside serialisation, as well as demand it of their suppliers, as they must adopt a global view of regulatory compliance. Larger contract manufacturing organisations (CMOs) are following suit for the same reasons and, despite the increased costs, many CMOs are investing now to remain competitive.

The most obvious advantages of aggregation can be seen in logistics operations. Those handling the products scan one code and understand what is contained in a shipment, simplifying the movement and handling of products. In the event of batches needing to be reworked or recalled, aggregation can minimise the need for large amounts of manual reworking in the supply chain.

There are also some specific use cases in the EU. First, when two wholesalers exchange products, they must check that codes are legitimate and that they have been updated properly in data repositories. Without aggregation, the receiving wholesaler would need to open all the cases and reprocess each carton. The FMD also dictates that if a product is stolen, it should be decommissioned within the relevant databases. With aggregation, it is possible to scan a small number of pallets to identify the stolen goods instead of manually scanning a huge number of products.

Although the efficiencies offered with aggregation should make a strong business case for investment, many organisations lack the adequate resources or expertise. However, turning to contract packing partners that can deliver aggregation alongside serialisation will allow them to ensure compliance as well as realise the added-value opportunities offered as a result of increased data flow.

Final thought

By leveraging the expertise and experience of contract packing partners, pharmaceutical companies will be able to minimise the costs and disruptions associated with implementing serialisation. Choosing the right partner, one that has invested in aggregation capabilities, will also open the door for greater supply chain efficiencies, future-proof against changing regulatory requirements and ensure businesses can both access global markets and service their customers.

This article appeared in the October issue of Manufacturing Chemist.

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