Magazine Article | April 12, 2012

The Long Road To Serialization And Track-And-Trace

Source: Life Science Leader
Gail Dutton

By Gail Dutton, Contributing Writer
Follow Me On Twitter @GailLdutton

The on-again, off-again efforts of the United States to implement serialization are on again, with a one-year phase-in scheduled to begin Jan. 1, 2015. At that point, California’s regulations become the de facto standard for the country. While large pharmaceutical companies are developing plans and piloting projects, smaller companies are maintaining a wait-and-see attitude.

Such hesitation is logical, given serialization’s regulatory history. Serialization and track-and-trace concerns began with the Prescription Drug Marketing Act of 1987.  The 21CFR Part 203 section of that act was intended to provide guidance for the FDA and the life sciences industry regarding enforcement efforts related to ePedigree requirements. Although 21CFR Part 203 was published in 1999 for implementation in 2000, implementation was delayed repeatedly until an agreement on definitions was reached in 2006. In the meantime, California, Florida, Texas, and New York developed their own ePedigree laws.

Because manufacturers don’t segment the California market, its regulation, which takes effect Jan. 1, 2015, effectively sets the standard for the United States. According to California Board of Pharmacy documents, “The goal is for any owner/possessor of a prescription drug located at a licensed wholesaler, repackager, reverse distributor, or pharmacy in California, upon request, to have and keep electronic records that show the lineage of the drug from the manufacturer through to the current point in the drug distribution channel (wholesaler, repackager, pharmacy).” More specifically, it calls for an ePedigree, interoperability, and serialization at the unit level and includes repackaging and returns. Implementation will be staggered, with completion mandated by the end of 2015.

Serialization Drivers
“The California Board of Pharmacy was concerned about counterfeiting and patient safety,” recalls Greg Cathcart, CEO of Excellis Health LLC. It worked with the California state legislature to pass anticounterfeiting and antidiversion legislation (SB 1307) in 2004 that mandated an ePedigree for drug distribution, according to the California Board of Pharmacy. Portions of that legislation were enacted in 2005 and 2006. At about that time, Katherine Eban’s book, Dangerous Doses: A True Story of Cops, Counterfeiters, and the Contamination of America’s Drug Supply, was published, underscoring the need to secure the pharmaceutical supply chain. Then, in 2006, the California Board of Pharmacy sponsored legislation that clarified the ePedigree requirement and moved implementation of that component of the law to 2009.

While California was developing serialization guidelines, the pharmaceutical industry was going global. Manufacturing began moving overseas, with pharma companies working with CMOs internationally and by establishing their own manufacturing facilities. Many of these facilities were in emerging nations that lacked a strong pharmaceutical industry  and regulatory framework. Because regulations often were weak, it was easy for organized crime to become involved, building a business that was considered less risky than smuggling narcotics, but equally lucrative. A stretched, fragmented supply chain made counterfeiting relatively easy.

Against that backdrop, patient safety is a primary driver, but there are additional concerns. “European nations back serialization as a reporting mechanism for healthcare providers to receive reimbursement from their government health programs for medications they dispense,” Cathcart says. In emerging nations, protecting the brand image is a potent driver to serialization. In India, the law requires manufacturers to serialize only drugs manufactured for export and to report the serialization to the government. If the drugs are for India’s domestic market, serialization is unnecessary. “India realized it had a counterfeiting problem and wanted to protect its image as a good place for pharma manufacturing,” he adds.

Industry Preparation
For the pharmaceutical industry, the challenges of preparing for serialization have been noteworthy. As Natalie Lotier, VP of strategic supply chain operations and planning for Bristol-Myers Squibb (BMS), recalls, “Within the industry, there was uncertainty surrounding the guidance for the protocol.” Technology to implement serialization and track and trace was still emerging — and continues to emerge.

In the time since the first serialization laws were passed, the industry has rightly sensed that guidelines could continue to evolve. In fact, the permissible technologies are still being determined. For example, this past February (2012), the FDA closed its comment period regarding the use of RFID as a technology to enable track and trace. According to CBER (Center for Biologics Evaluation and Research) spokesman Benjamin Chacko, “The comments will be reviewed, but no date has been set for a decision.” Even in late 2011, the California Board of Pharmacy continued to work on the regulations.

As the serialization and track-and-trace guidelines were being developed and then delayed, pharmaceutical companies had several questions to address. Tracking the regulations and their evolving requirements necessitated the involvement of multiple departments, causing leaders to question where the project fit into the organizational structure. Regulatory affairs, information technology, manufacturing, and supply chain were all involved at a foundational level.

At BMS, IT was involved early in the process and collaborated closely with other business units. “Industrywide, IT departments struggled to understand the standard and to select partners with the right capabilities,” says Terry Young, director of enterprise data operations at BMS.

When the standards were first introduced, the pharmaceutical industry had little involvement. In the intervening years, when implementation was pushed back from 2009 to 2011 and then again to 2015, many companies shuttered their programs, waiting for certainty. According to Lotier, during those times BMS focused on strategic awareness and development as it continued to track international serialization efforts. BMS also established its supply chain integrity council to provide global visibility into the international supply chain, including serialization and track-and-trace issues. With insights gained from its global supply chain council, BMS has been putting together its global plans.

Like other industry leaders, BMS is working proactively, providing input to standards and regulatory bodies and serving on GS1 committees. “We have people who are dedicated full time to understanding the regulations and responses,” Lotier notes.

Additionally, Young says, “We have developed formal and informal networks within the industry to help us appropriately interpret the regulations. When a new regulation is published or a change occurs, it’s sometimes subject to interpretation. In some mature markets, the regulations are self-explanatory. But in emerging markets, the regulations aren’t necessarily as clear. Therefore, discussions with regulatory authorities are required.” Collaborative networks within the pharmaceutical industry help keep the companies up to date on changes in regulations that sometimes are evolving monthly, as well as to develop consistent interpretations of the requirements so the industry speaks to regulators with one voice.

International Momentum For Serialization
While serialization regulations are pending in the United States, Canada, and the EU, they are already implemented in several other nations. Regulations are in place today in Turkey, India, China, Brazil, Argentina, and South Korea. Brazil launched a three-year rollout of track-and-trace requirements in 2009, culminating at the prescription level in January 2012. “Because the final requirements were changed at the last moment without industry consultation or time for adjustment, few, if any, pharmaceutical companies operating there are in compliance,” Cathcart speculates.

In Asia, India’s regulations went into effect July 1, 2011, three months after the industry comment period closed. The country mandates a bar code on every pharmaceutical exported from India, in an effort to thwart counterfeiting. China, in 2010, mandated that a “drug electronic supervision code” be printed on the smallest sales package by March 31, 2011. If the package is too small, it may be printed on the larger packaging.

In Europe, several individual countries have their own guidelines, in addition to those pending with the EU. French manufacturers must meet the EU requirements as well as slightly different national requirements mandating that lot, serial number, and expiration date must be readable by humans. That human-readable requirement poses obvious challenges for small packages. In contrast, Belgium’s requirement for sequential codes for medicines was published in December 2003 and implemented July 1, 2004. It calls for a 16-digit sequential code, structured as a product identification number, sequential number, and check digit. Unlike the EU requirement, it does not mandate a batch number or expiration date as part of the code.

Despite such differences, each nation’s regulations tend to be built around GS1 standards and are sufficiently similar so that pharmas, generally, can develop one program that meets all the global requirements. “The pending EU and California regulations, for example, only differ at the data transmission level,” Cathcart explains.

Although the GS1 format is the favored standard, ISO, IETF (Internet Engineering Task Force), and other competing standards also may apply to serialization. GS1, for example, has multiple standards that could be applied, including the GS1 Drug Pedigree Messaging Standard (DPMS) that governs track and trace. Additionally, Dirk Rogers, owner and sole contributor to the blog  RX Trace, points out, “There is some confusion in the industry about how to link the National Drug Code [NDC] and serial number of the repackaged drugs with the original manufacturer’s NDC and serial number on the source drug packages. This linkage cannot be done within an RFID tag or a bar code. That’s because these data carriers are not the pedigree.” Companies, consequently, are confused about which standard to use.

ePedigree Is Another Separate Challenge
Serialization is just one part of the challenge. The ePedigree is the other part. “The Network Centric ePedigree (NCeP) work group of the GS1 Healthcare Traceability group recognized that the current California pedigree law, as written, leads you down a path that only ends up at a document-based approach to compliance,” Rogers points out. “In the United States, the thinking is a new federal pedigree law may define a network-centric approach to pedigree that aligns with one of the models defined by the NCeP group, and — most importantly — that it will preempt the California pedigree law so the industry can veer away from document-based compliance before the deadline.

“If Congress does not enact a new law that can be met by 2015 using a network-centric approach, then companies will need to invest in DPMS-based systems. Those systems would almost certainly also make use of the EPCIS (Electronic Product Code Information Service) standard to capture and hold serial number events, but those events would be encapsulated in DPMS pedigree documents for exchange,” Rogers concludes. Given the frequency of the delays in implementing a U.S. serialization strategy and the still-evolving changes in the regulations, it’s no wonder that pharmaceutical manufacturers are cautious.

Editor’s Note: This is the first of a four-part series examining serialization strategies in the United States. Part two will look at strategies pharma manufacturers are using to meet the requirements for item-level serialization.