How digital container twins can improve pharma manufacturing

Manufacturing Intelligence: Digital Twins Meet Pharma Containers

Navigating FDA Shakeups and Obesity Drug Wars

Behind the Headlines Episode 28

Ask the Expert

How evolving regulatory expectations are reshaping pharma development and manufacturing.

Drug Digest April 2026

How It Helps Avoid Facility and Equipment Problems

A “Plan, Prevent, Prove” Approach

Sandra Coufal, Toragen, discusses her team's research targeting precancerous cervical cells, backed by a Gates Foundation grant and world-class advisors.

Inside the Expert Network Guiding TGN-S15 to Market

Sandra Coufal, MD, CEO, Toragen, outlines the scientific foundation and clinical ambitions behind TGN-S15 and her team's HPV-focused research, highlighting the exceptional expertise guiding their work and the significant unmet medical need they are working to address.

Central to the effort is Aldo Venuti, chairman of the scientific advisory board and a leading global authority on the HPV E5 protein. His institution, the Regina Elena Institute in Rome, serves as a sub-awardee on a Gates Foundation grant and provides crucial access to a rare precancerous cervical cell line originally licensed from the University of Cambridge.

This cell line is pivotal because it could allow the team to test their drug candidate against abnormal pap smear diagnoses. As Dr. Coufal explains, "If you could successfully treat abnormal Pap smears, over 99% of which are from HPV infection altering the cells, then you wouldn't have to have partial cervical resections." Such resections, when extensive, can lead to an incompetent cervix and loss of the ability to carry a pregnancy.

HPV is the most frequently transmitted sexual infection, affecting approximately 85% of sexually active people, with 10% unable to clear the virus on their own and no routine blood test yet exists to identify who those individuals are.

Rounding out the advisory team are Dr. Ezra Cohen, lead investigator on Keytruda trials in HPV-positive head and neck cancer; Dr. Penelope Duerksen-Hughes, an expert in HPV E5 and E7 proteins; and Dr. Bill DeGrado of UCSF, whose chemistry expertise continues to advance the program.

Videos

Cheryl Barton is director of PharmaVision, 

Medicines in the European Union. Country flag and pills close up. | Image Credit: ©Verrone -stock.adobe.com

On 12 May 2026, the European Commission (EC) welcomed the landmark policy agreement on the Critical Medicines Act (CMA).

 The proposed EC CMA is one of the most significant industrial policy measures in the European pharmaceutical sector in recent decades. Launched in March 2025 as part of the larger European Health Union initiative, the CMA seeks to improve the availability, manufacturing, and supply security of essential medicines throughout the European Union (see 

 The initiative was launched in reaction to ongoing medicine shortages, geopolitical unrest, and insights gained from the COVID-19 pandemic, highlighting Europe’s reliance on external providers for APIs and essential medicines.

Figure: Key Features of the Critical Medicines Act (Figure courtesy of the author)

The CMA significantly shifts the strategic focus of pharmaceutical manufacturing in Europe. Traditionally, procurement processes in many European Union countries emphasized low costs, often favouring large-scale offshore production in Asia, especially in China and India.

 The new framework emphasizes supply security, resilience, diversification, and regional manufacturing capacity. During the next 5-10 years, this policy shift is likely to impact pharmaceutical development strategies, manufacturing sites, procurement approaches, and investment decisions throughout the European life sciences sector.

From Cost Efficiency to Supply Resilience

A key transformation in the CMA is shifting from procurement systems focused mainly on price competition. The CMA now includes resilience-related criteria, enabling EU governments to prioritize suppliers that have diversified and secured manufacturing networks, contingency capacity, and production within Europe.

 This change is likely to impact pharmaceutical economics throughout Europe. Manufacturers that once relied on highly centralized production outside Europe might now experience strategic pressure to regionalize parts of their manufacturing processes. Companies producing antibiotics, sterile injectables, insulin, vaccines, and other essential medicines may need to invest more in European API synthesis, fill-finish processes, and packaging to stay competitive in EU tenders.

The policy also promotes “strategic projects” that benefit from expedited regulatory processes, simplified access to financing, and possible state aid.

 These incentives could greatly reduce obstacles for manufacturers aiming to set up domestic or regional production in Europe. In practical terms, this suggests that the pharmaceutical sector might favour more modular manufacturing approaches instead of depending on a few large global production centres.

Implications for Decentralized and Distributed Manufacturing

The CMA might significantly accelerate investment in decentralized or distributed pharmaceutical manufacturing systems. Traditionally, pharmaceutical production has favoured very large central facilities to maximize economies of scale. Yet these plants are susceptible to supply disruptions, transport delays, trade conflicts, pandemics, and regional political instability. Distributed manufacturing offers an alternative, with smaller, modular facilities located closer to demand centres. These facilities can quickly adjust production levels and switch products during emergencies. Within the CMA framework, this flexibility is strategically important because resilience delivers economic and regulatory benefits.

According to Carol Houts, CEO, Germfree, Belgium/US, “The CMA signals a shift in how Europe thinks about pharmaceutical manufacturing. In the past, strategies have predominantly focused on cost optimization, global sourcing, and consolidated supply chains. The CMA is really moving towards resilience, regional capacity, supply security, and the ability to respond when global systems are disrupted.”

Advanced continuous manufacturing technologies are especially important here.

 They reduce plant size, lower inventory needs, and enable flexible production scaling. Unlike traditional batch methods, modular continuous systems can usually be set up more quickly and duplicated across different sites.

 In the coming decade, Europe is likely to see heightened investment in modular API production facilities, portable fill-finish systems, and hybrid digital manufacturing networks. This trend corresponds with wider European industrial policy aims centred on “strategic autonomy.”

 Policymakers are increasingly concerned that over 80% of certain antibiotic APIs used in Europe are sourced from Asia.

 A manufacturing network spread across multiple locations can help reduce risks linked to export bans, shipping delays, or regional emergencies.

Modular Manufacturing and Rapid Deployment Capacity

The CMA’s focus on preparedness and supply continuity highlights the potential benefits of modular and quickly deployable manufacturing facilities. Modular manufacturing uses prefabricated units that can be installed, expanded, or relocated more quickly than conventional pharmaceutical plants. These systems could be particularly useful during health emergencies or supply shortages. Modular manufacturing platforms are currently under consideration for vaccines, sterile injectables, biologics, and advanced therapy medicinal products (ATMPs). Looking ahead, the CMA might encourage public-private partnerships to invest in additional manufacturing infrastructure spread across multiple EU member states.

 These facilities could operate at reduced capacity during regular times but quickly ramp up production in emergencies.

Digitalization will play a key role in this transformation. Technologies such as automation, process analytical technologies (PAT), and AI-driven quality monitoring can help smaller facilities achieve regulatory compliance similar to large centralized plants.

 This approach may lower operational risks and support distributed production across different locations. The advantages go beyond just resilience. Decentralized manufacturing has the potential to shorten lead times, cut transportation emissions, and enhance medicine availability in smaller or underserved European markets. Nevertheless, implementing these systems will require significant harmonization of regulatory oversight, workforce training, cybersecurity infrastructure, and quality assurance frameworks across EU Member States.

The CMA also encourages collaborative procurement and cross-border cooperation among member states.

 This collaborative approach could expand into manufacturing ecosystems that include pharmaceutical firms, contract development and manufacturing organizations (CDMOs), hospital networks, academic institutions, and regional health systems. These collaborative approaches could be particularly vital for advanced therapies, personalized medicines, and niche critical drugs, where production volumes are low but clinical need is urgent. Regional manufacturing clusters might integrate local production with shared logistics, digital infrastructure, and clinical services.

“Over the next 5 to 10 years, we'll see a shift as European manufacturers and health systems start to work more collaboratively, geographically,” Houts agrees. “Global supply chain issues are not necessarily confined to a single region, and challenges may differ across regions worldwide. It's going to require strong support from countries and initiatives to bring these manufacturing capabilities to fruition, particularly in APIs. APIs are quite inexpensive to produce at scale in places like India and China, but reproducing them in Europe or the United States is extremely expensive.”

For instance, collaborations between pharmaceutical companies and hospital-based manufacturing centres can facilitate decentralized production of cell and gene therapies. Because these treatments typically have very short shelf lives and require highly personalized manufacturing, producing them closer to patients could help minimize transport delays and maintain product quality. The CMA may promote the creation of resilient manufacturing ecosystems instead of standalone production facilities.

 In this approach, pharmaceutical resilience relies not just on physical plants but also on collaborative networks that can quickly coordinate supply, demand forecasting, and emergency response.

Implications for Advanced Therapies and Point-of-Care Production

Over the next decade, the CMA could serve as a key driver for advanced manufacturing technologies and point-of-care pharmaceutical production. Cell and gene therapies are already challenging traditional centralized manufacturing models, as they are often patient-specific, time-sensitive, and logistically complex. Point-of-care manufacturing refers to the creation of therapies directly within or near hospitals and treatment centres. The CMA’s focus on regional resilience and localized production could naturally support this growing approach. Europe might increasingly invest in small, automated manufacturing systems designed to produce autologous cell therapies near the patient’s bedside.

Similarly, modular manufacturing systems for small molecules could evolve providing mini factories, in which highly automated facilities generate essential medicines on demand at regional levels.

 These systems might heavily depend on continuous flow chemistry, robotics, and digital quality management. Regulatory frameworks will need to adapt accordingly. The European Medicines Agency is already emphasising manufacturing resilience and digital innovation.

Upcoming European regulations might become more flexible, supporting decentralized manufacturing validation, remote monitoring, and real-time release testing. Importantly, the CMA does not suggest Europe achieve total pharmaceutical self-sufficiency. International collaborations continue to be a component of the strategy.

 Nonetheless, there is a notable move towards diversification and less reliance on single external suppliers.

The CMA represents a significant strategic change in European pharmaceutical policy. Instead of seeing medicines merely as market commodities, the EU now considers them vital public health resources that need a robust regional infrastructure. In the coming 5-10 years, this transition is expected to boost investments in European manufacturing capacity, decentralized production systems, modular facilities, and collaborative pharmaceutical networks.

“I think that distributed manufacturing, whether through regional manufacturing hubs or point-of-care, is going to be necessary to address both drug shortages and expand access,” says Houts.

For pharmaceutical manufacturers, the CMA could fundamentally reshape the basis of competitive advantage. Factors such as supply resilience, geographic diversification, digital manufacturing capabilities, and regional integration might become as vital as manufacturing cost efficiency. Companies that integrate advanced manufacturing technologies with flexible regional supply networks are likely to gain a competitive edge in the evolving European regulatory and procurement landscape. At the same time, the CMA could accelerate the adoption of modular manufacturing, continuous processing, and point-of-care production technologies, particularly for advanced therapies and essential medicines. If implemented effectively, the CMA could position Europe as a global leader in resilient pharmaceutical manufacturing, enhancing long-term medicine security for European patients.

EMA. EMA welcomes political agreement on the Critical Medicines Act

12 May 2026. https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1017

 11 March 2025. https://health.ec.europa.eu/publications/proposal-critical-medicines-act_en

Critical Medicines Act: Council agrees its position on new rules to tackle shortages

 2 December 2025. https://www.consilium.europa.eu/en/press/press-releases/2025/12/02/critical-medicines-act-council-agrees-its-position-on-new-rules-to-tackle-shortages/pdf

Critical Medicines Act: Council and Parliament reach provisional deal

https://www.consilium.europa.eu/en/press/press-releases/2026/05/12/critical-medicines-act-council-and-parliament-reach-provisional-deal/pdf

EU announces plans to cut reliance on Asia for antibiotics and critical drugs

https://www.reuters.com/business/healthcare-pharmaceuticals/eu-announces-plans-cut-reliance-asia-antibiotics-other-critical-drugs-2025-03-11

https://health.ec.europa.eu/medicinal-products/critical-medicines-act_en

EU agrees draft deal to tackle essential medicine shortages

https://www.reuters.com/sustainability/boards-policy-regulation/eu-reaches-provisional-deal-address-shortage-essential-medicines-2026-05-12

Modular and reconfigurable factories for continuous production innovation in pharmaceutical manufacturing.

https://doi.org/10.1080/00207543.2025.2575844

Regulatory perspectives on continuous pharmaceutical manufacturing

https://doi.org/10.1016/j.xphs.2017.06.015

Schaber S.D., et al. Economic analysis of integrated continuous and batch pharmaceutical manufacturing: a case study.

 2011;50(17):10083-10092. https://www.research.ed.ac.uk/en/publications/economic-analysis-of-integrated-continuous-and-batch-pharmaceutic/

Future of pharmaceutical industry in Europe: Addressing strategic autonomy, API production, affordable medicines and unmet needs.

https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/future-pharmaceutical-industry-europe-addressing-strategic-autonomy-api-production-affordable-medicines-and-unmet-needs/related-links-ccmi-212

New CMA proposals to drive growth, investment and business confidence. Competition and Markets Authority

. Blog. 13 February 2025. https://competitionandmarkets.blog.gov.uk/2025/02/13/new-cma-proposals-to-drive-growth-investment-and-business-confidence/

Regulatory and quality considerations for continuous manufacturing

The Industrial Forum. Advanced Manufacturing at the heart of a resilient, sustainable and competitive Europe. Recommendations by the EU Industrial Forum. 12 June 2023. 

tf5-report-final-version--12.06.2023-3.pdf

Modulus: Redefining Biopharma Manufacturing

. 8 October 2025. Accessed 25 May 2026. https://www.sanofi.com/en/magazine/ai-in-healthcare/modulus-redefining-the-future-of-biopharma-manufacturing

. 18 June 2025. Accessed 25 May 2026. https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/critical-medicines-act

Cheryl Barton, PhD, is founder and director of PharmaVision, Pharmavision.co.uk.

Articles

The EU’s Critical Medicines Act signals a major industrial-policy pivot from lowest-cost sourcing to supply security for essential medicines. Resilience criteria in procurement, coupled with incentives for “strategic projects,” are expected to drive investment in European API, fill-finish, and packaging capacity. The framework favors decentralized and modular manufacturing, continuous processing, and digitally enabled quality oversight to improve agility during disruptions. Cross-border collaboration and manufacturing ecosystems may expand, with particular relevance for vaccines, antibiotics, sterile injectables, and point-of-care cell and gene therapies.

The CMA will improve Europe’s manufacturing resilience and lead to greater diversification and reduced reliance on single external suppliers.

The Critical Medicines Act’s Impact on Pharmaceutical Manufacturing and Supply Resilience in Europe

Lilly Agrees to Acquire 3 Pharma Firms for a Combined $3.8B

On May 26, 2026, Eli Lilly announced agreements to acquire three biotechnology companies—Curevo, LimmaTech Biologics, and Vaccine Company—in deals valued collectively at up to $3.83 billion.

 The transactions signal a deliberate expansion into infectious disease prevention, with each acquisition targeting a distinct pathogen class and technology platform.

The strategic thread connecting all three deals is the concept of upstream intervention.

 Rather than developing treatments for conditions like dementia or multiple sclerosis directly, Lilly is investing in preventing the infections implicated in their development, which can represent a more efficient path. Shingles vaccination, for instance, has been associated in population studies with reduced dementia risk, and there is growing evidence linking the Epstein-Barr virus to multiple sclerosis and several malignancies. The framing of vaccines being tools for reducing long-term disease burden rather than simply preventing acute infection, has implications for how these treatments will be positioned in development and eventually in regulatory submissions.

The Curevo acquisition, worth up to $1.5 billion, centers on amezosvatein, an adjuvanted subunit vaccine candidate for shingles prevention.

 The current standard of care, while effective, carries tolerability challenges that contribute to second-dose hesitancy. Curevo engineered amezosvatein with a next-generation synthetic adjuvant intended to address this. In a phase 2 head-to-head trial, the candidate matched immune response on primary endpoints while cutting rates of activity-limiting fatigue, chills, and injection-site pain by more than half. From a manufacturing standpoint, synthetic adjuvant technology represents a formulation challenge that differs meaningfully from established aluminum salt or oil-in-water systems, and scaling this platform will require careful process development attention.

What Do These Platforms Demand on the Development and Manufacturing Fronts?

The LimmaTech Biologics acquisition, valued at up to $780 million, introduces a bacterial vaccine platform targeting pathogens for which antimicrobial resistance is progressively limiting treatment options including 

 The platform is designed to generate immune responses against the toxins and superantigens these bacteria produce, rather than surface antigens alone. The lead candidate, targeting S. aureus as a cause of surgical-site infection, is currently in phase 1. Complex bacterial vaccine antigens of this type present distinct bioprocess challenges compared to viral platforms, particularly around consistency of antigen folding and conjugation at scale.

The third acquisition, Vaccine Company, which shareholders could receive up to $1.55 billion, brings in a proprietary nanoparticle technology platform designed to replicate the antigen display properties of virus-like particle vaccines without the manufacturing burden those platforms typically impose.

 The lead program applies this approach to Epstein-Barr virus with a five-antigen candidate described as phase 1-ready. If the platform performs as designed, it could represent an advance in the manufacturability of complex particle-based vaccines.

All three transactions remain subject to regulatory clearance.

 Lilly has indicated it will determine the accounting treatment following closing, with financial results and guidance updated accordingly. These deals collectively illustrate how infectious disease prevention is being repositioned, not as a standalone therapeutic category, but as infrastructure for reducing the long-term burden of some of medicine's most intractable conditions.

How Does Lilly's Oncology Pipeline Reflect the Same Upstream Thinking?

The infectious disease strategy Lilly outlined this month does not exist in isolation.

At the American Society of Clinical Oncology Annual Meeting

 the company will present data across a portfolio that increasingly reflects the same logic: intervening earlier, with more targeted tools, to alter long-term disease trajectory. Two presentations have been selected for the meeting's Plenary Session. Primary event-free survival results from the Phase III LIBRETTO-432 study of selpercatinib as adjuvant therapy in fusion-positive non-small cell lung cancer will be featured alongside an investigator-initiated Phase III trial evaluating abemaciclib in advanced dedifferentiated liposarcoma, a rare soft tissue cancer with limited treatment options.

The meeting will also include the first clinical results for an investigational antibody drug conjugate targeting Nectin-4 in advanced urothelial carcinoma, representing an early proof-of-concept readout for a next-generation platform Lilly is actively expanding.

Updated data from Kelonia Therapeutics' in vivo chimeric antigen receptor T-cell program in relapsed and refractory multiple myeloma will also be presented, ahead of that acquisition's expected close in the second half of 2026.

The breadth of modalities on display, targeted small molecules, antibody drug conjugates, and in vivo cell therapy, underscores how diversified Lilly's technology platform strategy has become across both infectious disease and oncology.

Lilly announces three acquisitions to build infectious disease portfolio. Eli Lilly and Company. News release. May 26, 2026. 

https://investor.lilly.com/news-releases/news-release-details/lilly-announces-three-acquisitions-build-infectious-disease

Lilly to showcase oncology portfolio across tumor types and treatment modalities at the 2026 American Society of Clinical Oncology Annual Meeting. Eli Lilly and Company. News release. May 21, 2026. 

https://investor.lilly.com/news-releases/news-release-details/lilly-showcase-oncology-portfolio-across-tumor-types-and

Eli Lilly is expanding infectious disease prevention via acquisitions of Curevo, LimmaTech Biologics, and Vaccine Company totaling up to $3.83B, emphasizing “upstream” risk reduction for chronic disease. Curevo’s shingles candidate aims to maintain immunogenicity while improving tolerability using a synthetic adjuvant. LimmaTech adds bacterial toxoid/superantigen–focused vaccines for AMR-threat pathogens with distinct scale-up constraints. Vaccine Company contributes a nanoparticle antigen-display platform for a phase 1–ready multiantigen EBV program. Parallel oncology efforts reflect earlier, targeted intervention across modalities.

Lilly acquires three biotech firms for up to $3.83 billion, targeting vaccines that may prevent not just infection but also downstream neurological and oncological disease.

Lilly Makes $3.8B Bet on Building Infectious Disease Portfolio

Associate Director, IT Applications
Hikma

Pharmaceutical serialization is evolving through the power of operational intelligence

Pharmaceutical serialization has reached a decisive inflection point.¹

³ With full enforcement of the U.S. Drug Supply Chain Security Act (DSCSA) now operational across manufacturers, distributors, and big dispensers and parallel advancements like alert management, digital link, Blockchain etc. accelerating in Europe and other global markets, the industry has largely completed the compliance build phase of traceability, what I refer to as the foundation phase. What remains unresolved is how the unprecedented volume of serialized supply chain data, often reaching billions of EPCIS events annually in large networks, will be operationalized.

This article argues that serialization infrastructure should no longer be viewed primarily as a regulatory reporting mechanism, but as a strategic operational intelligence asset.⁴ Drawing on real-world experience across large pharmaceutical trading networks, it examines persistent failure modes that remain hidden behind nominal compliance, including exception overload, certificate expiry, third‑party logistics (3PL) complexity, network fragility, and untested manual fallback procedures. Grounded in current regulatory expectations and increasing legislative scrutiny, what follows outlines a pragmatic path for transforming serialization from reactive compliance into proactive supply chain stewardship.

From Regulatory Obligation to Operational Control

The pharmaceutical industry in major countries worldwide has been focusing on getting its serialization and track and trace infrastructure and network build for more than a decade and it would be safe to say that in these ten to fifteen years, the industry has built one of the most granular product traceability infrastructures of any regulated sector. At the package level, prescription medicines are now traceable across manufacturing sites, logistics providers, wholesale distributors, and dispensers. This transformation was driven by a clear and enduring need because threats to the supply chain such as counterfeiting, diversion, theft and imports of falsified, unapproved, or otherwise unsafe drugs, could result in unsafe, ineffective drugs in U.S. distribution.

 And as per WHO, at least 1 in 10 medicines in low-and middle-income countries are substandard or falsified.

 Overall, this leads to believe that counterfeit and diverted medicines are continuing to pose a significant risks to patient safety and global supply chain integrity.

Despite this progress, a critical operational gap remains. In many organizations, serialization systems function adequately under stable conditions but degrade quickly under stress, such as during partner outages, data mismatches, system changes, or peak distribution periods. Transaction data are captured, transmitted, and archived yet rarely leveraged to improve resilience or reduce disruption when conditions deviate from the norm.

This creates a paradox increasingly visible across the industry: organizations are technically compliant, yet operationally fragile.

Investment in supply chain analytics and advanced automation continues to accelerate across industries.

 As policymakers intensify scrutiny of pharmaceutical supply chain transparency, resilience, and foreign dependency, the role of serialization is being redefined.

 The question is no longer whether traceability exists, but whether it performs reliably under real-world conditions.

Persistent Operational Challenges in Serialization Programs

Even in mature implementations, several systemic challenges continue to undermine serialization effectiveness at scale and few critical one are addressed below:-

Exception Overload and Non‑Linear Growth

Modern serialization environments routinely generate thousands and sometimes even tens of thousands of exceptions per month within large trading networks. These events are rarely isolated. Minor defects, such as aggregation mismatches, incomplete EPCIS events, or partner‑specific formatting differences can cascade across multiple downstream partners.

In practice, exception volume often grows disproportionately as networks scale. Resolution requires cross‑referencing ERP transactions and correlating them against the touch points from Manufacturing till the end customer, serialization repositories with tracking and tracing details, partner acknowledgments, and historical communications—activities that are inherently time‑consuming and difficult to standardize.

A minor aggregation discrepancy originating at a contract packaging site could propagate through multiple customers including distributor and dispensers’ nodes, triggering product quarantine across the organizations. When performing investigation, we generally find that the technical defect itself was simple; the effort required to identify ownership, align stakeholders, and coordinate corrective action was not.

Organizations that have successfully reduced exception backlogs follow a consistent pattern: they start not with AI, but with taxonomy. Before any automated triage can be effective, exception types must be formally classified—by root cause category (data quality, system connectivity, partner configuration, aggregation error, Operator/clerical errors or quality related issues), by trading partner tier, and by regulatory risk level. Build patterns and trends and rank them. This structured classification becomes the training foundation for machine learning based detection and prioritization. Specifically, teams should: (1) export six months of historical exceptions from their serialization platform and categorize them by type and resolution path; (2) Apply 80-20 rule where identify the 20% of exception types that drive 80% of resolution effort—these are the highest value targets for ML prioritization; and (3) build a standardized exception intake and possible responses form that enforces consistent data capture, which in turn should improve AI model accuracy over time.

 Once this foundation is in place, ML based triage can be piloted on high-frequency, well defined exception types, allowing analysts to focus human judgment on novel or ambiguous cases where it adds the most value.

Exception handling remains heavily dependent on human intervention. Resolution quality varies based on individual expertise, familiarity with specific partners, and access to historical context. During peak shipping periods or organizational transitions, this variability increases and documentation consistency declines, introducing both audit and continuity risk.

Many organizations discover after go‑live that scaling exception handling linearly with headcount is neither sustainable nor effective. The limiting factor is not capacity, but consistency (i.e., how reliably issues are identified, classified, and resolved regardless of who is on shift) and resource churn increase those limits further.

The most effective near term intervention for human variability is a RACI-anchored exception routing model combined with natural language processing (NLP) tools that translate technical system logs into plain language action summaries. Practically, this means defining which team owns each exception category: quality for product level discrepancies, Distribution for Inventory discrepancy, Claims/customer service for Overages, Damages and mis-pick/mis-ships, for IT for connectivity and system and data failures, operations for trading partner coordination. Once routing is explicit, NLP engines can parse incoming exception logs, classify the likely root cause, and surface the relevant owner with a pre-populated action summary, reducing the cognitive load on any individual analyst regardless of their experience level. Organizations that have implemented this pattern report that on-boarding time for new exception analysts drops significantly, and that shift change handoffs become structured data transfers rather than informal verbal briefings, reducing audit documentation gaps.

Another key error point noticed which causes DSCSA disruption between trading partners is digital certificate expiry which is fairly a preventable cause. In EPCIS based exchanges, expired certificates can silently block data transmission without generating clear system level alerts. Operationally, this often surfaces downstream as unexplained product quarantines. ²

When a certificate lapse at an intermediary node occurs, it disrupts EPCIS transmissions i.e. Interoperability across multiple trading partners. By the time the issue been investigated and root cause is being identified, product movement had already been impacted, requiring coordinated remediation across several organizations. Even though the certificate renewal could happen quickly; the operational recovery extends to length and across an entire business cycle.

Certificate failures are entirely preventable with a structured lifecycle management program. Organizations should maintain a centralized certificate inventory, whether a simple spreadsheet or an integrated monitoring dashboard tool whichever could capture the certificate name, associated trading partner, expiry date, responsible owner, and renewal lead time for every AS2, SFTP, and HTTPS certificate in their serialization network. Automated monitoring tools available within most middleware platforms (e.g., LsPedia, TraceLink, rfxcel, Antares Vision) can be configured to send 90-day, 60-day, and 30-day expiry alerts and reminders to designated owners, escalating to management if the 30-day threshold passes without renewal confirmation. IT teams should additionally implement automated connection health checks daily or periodically and schedule them outside of business hours. These checks confirm that certificate handshakes succeed and will catch post-renewal mismatches (such as a new certificate not yet trusted by the partner’s system) before they affect live shipments. A written certificate renewal SOP, including escalation contacts and a 24-hour emergency renewal procedure, should be tested at least annually. Industry guidance from GS1 US provides specific technical recommendations for certificate management within DSCSA EPCIS implementations.

System Changes and External partner like 3PL Dependencies

Serialization ecosystems are highly interdependent. Configuration changes, API updates, or platform upgrades at a single wholesaler or 3PL can affect dozens of connected partners simultaneously. When logistics providers act as agents for multiple manufacturers, accountability can become diffused.

A recurring operational challenge is that the point of failure is rarely the point of ownership. This misalignment delays resolution and amplifies downstream disruption, particularly under DSCSA timelines for which responsiveness is critical.

Planning the internal changes and change management communication, periodic touchpoints are essential along with system and data impact assessment. involving the external partners with clarity of scope, independence and language helps avoid day 1 disruptions. The most effective intervention for CMO or 3PL related serialization failures is ensuring that trading partner and 3PL service agreements include a formal Serialization Change Notification requirement for example a minimum 30 days advance notice before any platform configuration change, API update, or certificate modification that could affect EPCIS transmission. Beyond contracts, what helps organization is a shared Serialization Change Calendar across all key partners, updated monthly and distributed to IT, quality, and operations leads, so that risk windows are visible before they become incidents. When failures do occur, resolution speed depends entirely on whether a pre-agreed escalation matrix exists hence a simple document that defines who to contact at the 3PL, the expected response time, and the remediation documentation required for regulatory audit. Organizations that have notification clause, change calendar, and escalation matrix in place could resolve partner caused exceptions faster and with less downstream disruption than those managing the same failures reactively.¹⁴

System outages, whether caused by infrastructure failures, cyber incidents, or third‑party disruptions are inevitable. Regulatory obligations for traceability do not pause during downtime.³

In practice, fallback processes are often improvised rather than rehearsed. Risk arises not because systems fail, but because organizations are unprepared to operate effectively without them.

A resilient serialization program requires a written, tested fallback SOP that operations staff can execute without IT support during a system outage. The SOP should specify, at minimum: (1) the maximum permissible outage window before shipments must be held (typically defined by the organization’s DSCSA trading partner agreement); (2) a manual exception log template that captures all product movements with required DSCSA data fields during downtime; (3) the re-transmission procedure for backlogged EPCIS events once systems are restored, including the sequence in which events must be submitted to preserve chronological integrity; and (4) a partner notification template for informing downstream trading partners of the outage and estimated resolution time. Critically, this SOP must be rehearsed—not merely documented. Quarterly tabletop exercises, in which the operations and IT teams simulate a four hour outage scenario and walk through the manual process step by step, expose gaps and build the operational muscle memory that prevents improvisation under pressure. Manufacturers supported by 3PL, the SOP must also define who within the 3PL has authority to invoke fallback procedures and how that decision is communicated back to the manufacturer’s quality and IT teams in real time.

The regulatory environment surrounding pharmaceutical traceability has shifted from implementation guidance to enforcement and assurance.

In the United States, DSCSA enforcement deadlines now apply across manufacturers, repackagers, wholesalers, and dispensers, with remaining stabilization provisions scheduled to sunset for smaller dispensers in 2026.³ Serialized data exchange at scale is now an operational reality.

In parallel, European regulators are advancing beyond the Falsified Medicines Directive toward broader Digital Product Passport concepts under the Ecodesign for Sustainable Products Regulation.

 GS1 EPCIS 2.0 and Digital Link standards provide the technical foundation for this expanded transparency.

Governance expectations for advanced analytics and artificial intelligence are also maturing. The FDA has published draft guidance on AI credibility for regulatory decision‑making, along with clarification on predetermined change control plans for adaptive systems.

 The European Medicines Agency has articulated similar principles emphasizing risk based governance and human oversight.

 These expectations align closely with the NIST Artificial Intelligence Risk Management Framework, which is increasingly referenced by regulators on both sides of the Atlantic.

Layered onto regulatory oversight is growing Congressional attention. Multiple hearings and committee reports between 2025 and 2026 have explicitly linked supply chain transparency to patient safety, national security, and drug affordability.⁸ These inquiries make clear that traceability data will increasingly be used not only by regulators, but by policymakers evaluating foreign dependence, pricing practices, and system integrity.

https://www.fda.gov/drugs/drug-supply-chain-security-act-dscsa/title-ii-drug-quality-and-security-act

EPCIS & CBV: GS1 Standards for Event‑Based Visibility.

DSCSA Compliance: Milestones, More Deadlines—and the Road Ahead.

https://www.pharmaceuticalcommerce.com/view/dscsa-compliance-milestones-more-deadlines-and-the-road-ahead

Prescription Drug Supply Chain Transparency and Resilience Hearings.

https://www.aging.senate.gov/hearings/prescription-for-trouble-drug-safety-supply-chains-and-the-risk-to-aging-americans

Research C for DEA. Drug Supply Chain Integrity. U.S. Food And Drug Administration. March 9, 2026. 

https://www.fda.gov/drugs/drug-safety-and-availability/drug-supply-chain-integrity

World Health Organization: WHO. Substandard and falsified medical products. December 3, 2024. 

https://www.who.int/news-room/fact-sheets/detail/substandard-and-falsified-medical-products

Mackey TK, Liang BA, York P, Kubic T. Counterfeit drug penetration into global legitimate medicine supply chains: a global assessment. 

https://pmc.ncbi.nlm.nih.gov/articles/PMC4455087/

 Intelligence in Supply Chain Market Size, Share & Trends Analysis Report 2024–2030.

https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-supply-chain-market-report

AI in Pharma & Biotech Market to Reach US$13.1 Bn by 2034.

https://www.pharmiweb.com/press-release/2025-02-27/ai-in-pharma-and-biotech-market-outlook-to-reach-us-131-bn-by-2034-driven-by-speedy-drug-development-and-gene-editing-advancements-latest-report-b

Foreign Dependence and Pharmaceutical Supply Chain Risk Reports.

https://www.aging.senate.gov/imo/media/doc/senate_aging_american_drugs_report.pdf

Understanding EPCIS: Benefits, Event Types, and Serialization.

https://kezzler.com/blog/understanding-epcis-benefits-event-types-and-serialization/

https://ispe.org/publications/guidance-documents/gamp-guide-artificial-intelligence

https://www.gs1us.org/industries-and-insights/by-industry/healthcare/standards-in-use/pharmaceutical/dscsa-implementation-guidelines

Stanton, D., Supply Chain Management for Dummies, Wiley & Sons. December 15, 2020. 

https://www.dummies.com/book/business-careers-money/business/operations/supply-chain-management-for-dummies-281875/

Ecodesign for Sustainable Products Regulation (ESPR).

https://green-forum.ec.europa.eu/implementing-ecodesign-sustainable-products-regulation_en

https://www.gs1.org/standards/gs1-digital-link

Considerations for the Use of Artificial Intelligence to Support Regulatory Decision‑Making.

https://www.fda.gov/regulatory-information/search-fda-guidance-documents/considerations-use-artificial-intelligence-support-regulatory-decision-making-drug-and-biological

Predetermined Change Control Plans for AI‑Enabled Systems.

https://www.fda.gov/regulatory-information/search-fda-guidance-documents/marketing-submission-recommendations-predetermined-change-control-plan-artificial-intelligence

Reflection Paper on the Use of Artificial Intelligence in the Medicinal Product Lifecycle.

https://www.ema.europa.eu/en/use-artificial-intelligence-ai-medicinal-product-lifecycle-scientific-guideline

National Institute of Standards and Technology. 

Artificial Intelligence Risk Management Framework (AI RMF 1.0).

https://www.nist.gov/itl/ai-risk-management-framework

https://www.nist.gov/publications/artificial-intelligence-risk-management-framework-generative-artificial-intelligence

Pharmaceutical serialization has moved from build-and-comply to full-scale operational execution under DSCSA, with parallel global momentum via EPCIS 2.0, Digital Link, and emerging Digital Product Passport concepts. Despite technical compliance, many networks remain operationally brittle when stressed by outages, partner changes, data mismatches, and exception surges. High-volume EPCIS data should be treated as an operational intelligence layer to improve resilience, reduce quarantine events, and strengthen stewardship. Pragmatic controls include exception taxonomy, RACI-based routing, certificate lifecycle monitoring, change governance, and rehearsed manual fallback procedures.

Pharmaceutical serialization must evolve from regulatory compliance into operational intelligence, addressing hidden failures like exception overload, certificate expiry, and 3PL complexity.

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