Looking Beyond the Deadline

Editor's Note: This article was published in Pharmaceutical Technology Europe's January 2019 print issue. 

In 2016, the European Union parliament passed the delegated regulation to the Falsified Medicines Directive (FMD) 2011/62/EU, which is set to come into force from 9 February 2019 (1). This regulation-aimed at improving the security of both the manufacture and delivery of medicines throughout Europe-means that pharmaceutical manufacturers will need to implement specific safety features on all medicines packaging and invest in software that meets the data exchange and compliance reporting requirements.

“The regulation requires manufacturers to fix two safety features on all new packs of prescription medicines placed on the market in Europe from the enforcement date onwards,” explains Jean-Marie Aulnette, vice-president of EMEA sales, TraceLink. “These are a unique identifier (UI) in the form of a 2‑D data matrix (barcode) and an anti-tampering device (ATD).”

“Although the measures that need to be implemented sound relatively simple, in practice it is a time-consuming process to select the appropriate hardware and software then ensure full integration across packaging lines,” adds Erik Haeffler, vice‑president manufacturing services and head of CSR, Recipharm. “Companies also need to consider their data storage and transfer capabilities, staff training, and time to fully trial and test solutions to minimize disruption to supply. Without this it is very likely the industry will be at risk of supply shortages after the February deadline.”

A global issue

According to research from the World Health Organization (WHO), approximately one in 10 medical products in low- and middle‑income countries are falsified or considered to be substandard (2). Translating this across to the potential financial impact on the pharma industry, WHO estimates that approximately US $30.5 billion (approximately €26 billion) is spent on falsified or substandard medical products in low- and middle‑income countries alone (2).

“The counterfeit drugs market costs the industry billions each year and has huge implications for patient safety and the trust they have in drug manufacturers,” confirms Haeffler. “Serialization measures are an essential part of tackling the concerns surrounding falsified medicines, reimbursement fraud, and theft across the pharmaceutical supply chain. By making medicines traceable as they travel from packager to patient, we can reduce the likelihood of falsified products reaching the end user through legitimate channels.”

Additionally, the increasing complexity of the route to market for pharmaceuticals, such as via online pharmacies and crossing European borders, must be considered, notes Ingo Schraut, product and service manager, Vetter. “Therefore, to be effective, protection measures must be implemented on a consistent basis within the supply chain,” he continues. “When applicable, every step must be taken to block unofficial pharmaceutical products from entering the market.” 

Packaging requirements

As the EU FMD regulation requires additional safety features on all packs of medicines, artwork and packaging of products will need to be re-designed. “Given that some marketing authorization holders (MAHs) have thousands of stock-keeping units (SKUs), this has been a significant challenge,” says Aulnette. “In a recent poll, performed by TraceLink, it was found that while pharmaceutical and healthcare executives see the value of serialization, there are also a number of roadblocks that make being compliant a challenge (3). Packaging artwork updates were identified as one such problem area.” 

In agreement, Daniel Tedham, managing director, Wasdell Manufacturing a division of the Wasdell Group, adds, “Companies have had to consider a number of necessary changes to packaging components. For example, cartons need to have larger unvarnished areas added to them to cater for new lines of text such as a GTIN, batch number, expiry dates, serialized data, and 2D data matrices. Artwork templates may need to be reworked and designed at an early stage in the process. Anti-tampering devices also add an additional level of complexity, as do packages that require braille, so these will also need to be considered and adapted accordingly.”

However, it is not just the packaging itself that needs to be considered but also the packaging lines, as Tedham explains, companies will need to make a choice about whether to adapt the current line or to install an offline standalone (late-stage customization) serialization solution. “Both have their advantages, unique challenges, and impacts on packaging procedures,” he notes. “These complexities are leading many companies to look for third-party contract packaging providers to outsource their serialization requirements to.”

Then, there is the increased amount of data that will be generated through the changes to packaging brought about by serialization. These data, however, can be used to the benefit of the industry in the view of Dexter Tjoa, director corporate strategy, Tjoapack. “The additional data will give the industry the opportunity to make strategic improvements, such as refining order forecasting, increasing visibility of stock levels, and accessing shipment data,” he adds. “These improvements will, in turn, allow for more accurate demand planning, which will enable the reduction of waste across the supply chain by limiting the need for activities such as repackaging.”

Not prepared yet? Outsource

With the deadline now extremely close and the complexity of managing the various components involved in complying with the EU FMD regulation, businesses are looking towards third-party contract partners more and more. “At this stage, I would suggest that lesser prepared companies find providers that are ready and have experience in the process and follow their advice on conversion,” says Rick Seibert, senior vice‑president of innovation and technology services at Sharp. “Outsourcing to contract partners that have a validated solution in place is likely to be the only way that underprepared MAHs will make the deadline.” 

Haeffler also believes that outsourcing is the only option for those companies ill-prepared for the EU FMD regulation deadline. However, for those companies that are close to finalizing a solution but still concerned they may just miss the deadline, he advises that purchasing a bridging stock prior to 9 February 2019 could be a good way to prepare for any potential downtime in production.

“Companies that have not yet tried and tested an appropriate solution should be looking to third‑party providers that can support them with a compliant solution,” stresses Tjoa. “Onboarding and implementation take time, so it’s essential to approach a contract packager as soon as possible to minimize any disruption to supply. Selecting a provider who is well-prepared and has a good understanding of the market and regulatory requirements will go a long way to ensuring business continues as normal.” 

Even those companies that started preparing for serialization early on may encounter some timing issues. “Some businesses chose to create point-to-point connections with their trade partners, such as contract manufacturing organizations (CMOs) and third-party logistics providers (3PLs), for serialization data exchange,” explains Aulnette. “These companies are also at risk of failing to meet the deadline. It is also not uncommon for smaller companies to be behind in their serialization planning as resources, and budget constraints make it exponentially more challenging. In both of these circumstances, companies have no choice but to rely on support from providers that offer a network-tenant solution and have the resources to deliver cost-effective, turnkey solutions to meet the deadline.” 

In Tedham’s opinion, once a solution has been implemented and validated, it is imperative that businesses work together with partners and other members of the supply chain to ensure each connection is prepared. “At the end of the day, it is for the industry’s benefit for every company to be compliant, the supply chain is simply too vast and intertwined for there to be any missing links,” he says. 

Impact of Brexit

Despite the uncertainty surrounding Brexit and its potential implications on the pharma industry as a whole after the exit deadline date has passed, the United Kingdom’s government has committed to the implementation of the FMD regulation. “Therefore, in theory, the impact Brexit will have on serialization compliance will be minimal,” notes Haeffler.

However, some companies have still initiated preparative measures to try to ensure minimal disruption to supply. “We have seen that many of our clients are splitting their products upfront into two different variants or SKUs. This allows them to be independent of any outcome of Brexit,” says Schraut. 

“Companies have adopted different approaches to create contingency plans,” confirms Tedham. “Some have developed joint ventures and co-location of premises in the EU. Others, have looked to building a new facility and legal entity to provide continuity and contingency for their customers and markets. Due to the complexity of the manufacturing supply chains, not all operations can be moved, and more elaborate mechanisms will need to be developed.” 

Another important consideration is the UK’s access to the European Medicines Verification System (EMVS), notes Tedham. This established system should guarantee medicines authenticity by an end-to-end verification as each member state, with a national MVS, must share information with the EMVS. “The impact and consequences to how this will connect or not are not yet fully understood,” he adds.

For Haeffler, the biggest impact of Brexit will be seen in analysis and release activity. “If all pharmaceutical products that are manufactured, packed, analysed, and released in the UK need to be retested in an EU country before they can be released to market and vice versa, there will be a huge impact on the supply chain in terms of time and resource,” he notes.

Benefits of aggregation

Aggregation is not a mandatory requirement of the EU FMD regulation, yet, there is much agreement surrounding the benefits of implementing it proactively. “There are huge benefits to implementing aggregation,” says Tjoa. “By building parent-child relationships across three tiers of packaging, from unit dose to pallet, companies can avoid unpacking entire batches to verify the contents. This could speed up the passage of products through the supply chain and ultimately generate cost and resource savings.”

Supply chain efficiency is the biggest benefit of aggregation but there are other benefits to consider as well, explains Seibert. “Enabling businesses downstream of the product manufacturer to infer contents based on the identity of larger batched products is advantageous for receiving, inventory management, and pick, pack, and ship procedures,” he says. “These benefits, however, would only be enjoyed by wholesale distributors, re-packagers, and pharmacy chains with central distribution centres.”

Yet, implementation costs involved with aggregation cannot be ignored. “Incorporating aggregation into a serialization solution is far more complex and the costs are considerably higher, so it’s important that there is a good business case for implementation at this stage,” notes Haeffler.

One such business case would be if a company supplies products to the United States, where aggregation will be a required capability manufacturers must have in place by 2023 as mandated by the US Drug Supply Chain Security Act (4). “Forward-thinking companies should be considering what amendments are likely to be made to the EU FMD following its initial implementation,” says Tjoa. “It is likely that aggregation will come to all markets eventually, and those who prepare now will be in a much stronger position if this happens.” 

However, in order for aggregation to offer true value, it will be imperative for companies to thoroughly define the data integrity practices and adhere to these throughout each product’s lifetime, warns Seibert. “Every time a product is moved or handled it must be recorded, especially if there are changes such as cases being removed from a pallet,” he continues. “When there is an ‘event’, tiers must be disaggregated and rebuilt to ensure the change is tracked, maintaining the integrity of the tiered relationships. Businesses must ensure they rigorously control these hierarchies, otherwise they risk that improperly serialized and potentially counterfeit products will enter the supply chain, negating the very purpose of the FMD.”

Value beyond compliance

“As the legal landscape for drug serialization continues to evolve, industry leaders must look beyond short-term compliance requirements and think about how companies will adapt to future legislation, both in current and prospective markets,” says Tedham. “This will not only open the door for greater supply chain efficiencies but enable pharmaceutical companies to react faster when faced with new legislation.” 

Seibert adds that in order to create value beyond compliance, companies that are ready should be looking at developing programmes and services to allow clients use of systems that are already deployed. “A focus area should be around enabling patients to better engage with their treatment and care by providing access to resources and enhanced services via the unique data points on the package created by serialization,” he says. 

Taking advantage of the data that is connected with a specific product could allow manufacturers to provide more timely and accurate responses to patient concerns or complaints, he explains. Additionally, the barcodes on products could be used to proactively distribute information and adherence guidelines specific to the patient and the condition via websites and smartphone applications. 

“Although the pharmaceutical industry is being mandated to embrace serialization, those who do so with an approach that explores value-added features while future-proofing their solution will be able to reap the many benefits the programme has in store,” Seibert concludes.

References

EC Directive 2011/62/EU, Falsified Medicines Directive (Brussels, July 2011)

WHO, “A Study on the Public Health and Socioeconomic Impact of Substandard and Falsified Medical Products,” who.int, www.who.int/medicines/regulation/ssffc/publications/SE-Study_EN_web.pdf?ua=1 

TraceLink, “Global Drug Safety, Supply and Traceability report,” tracelink.com, 28 March 2018.

FDA, “Drug Supply Chain Security Act,” fda.gov, www.fda.gov/Drugs/DrugSafety/ DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/ accessed 4 December 2018.  PTE

Article Details

Pharmaceutical Technology Europe Vol. 31, No. 1 January 2019 Pages: 16–18   Citation When referring to this article, please cite it as F. Thomas, “Looking Beyond the Deadline," Pharmaceutical Technology Europe 31 (1) 2019.