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Looming deadlines for pharmaceutical supply chain regulations are found in the DSCA (U.S.), Falsified Medicines Directive (EU), and other regulations in China, India, Japan, Brazil, South Korea, Turkey, Argentina and many more countries. Most of these require some sort of serialization at the final unit of sale level. This alone is a significant impact on the manufacturing process, in particular at the packaging stage. But the bigger challenges lie in the traceability and verification requirements coming on the heals of serialization mandates. Non-compliance is not a viable option, as it appears the regulators are serious about enforcement.
Upcoming or already past deadlines include:
• January 2015 - United States: Lot-level traceability and verification for all players (dispensers had until July 2015 to comply)
• December 2015 - China: All drugs serialized and tracked from manufacturing throughout distribution and reported to CFDA (China Food & Drug Administration)
• January/July 2016 - South Korea: Serialization of all drugs (January) and full reporting to KPIS (July)
• November 2017 - U.S.: Serialization by manufacturers of every package and sealed case; verification of identity upon request. Re-packagers have until 2018 and by 2019 wholesalers must only accept serialized products.
• 2018 - EU: Serialized barcodes on every package, reporting to EU hub, verification at dispensing.
• 2023 - U.S.: Full electronic package-level traceability end-to-end from manufacturer through to dispenser.
This list is only a fraction of the milestones coming up across the globe.
These changes represent major investments in new systems, changing processes, and ensuring interoperability between all the players across the supply chain. It will force players up and down the chain to implement much more granular (dispensed-unit-level) trace-and-track of drugs, all the way from the manufacturer to the point of dispensing.
There is tremendous potential value once these capabilities are in place, such as:
• Far greater visibility across the chain - manufacturers will know what is selling, where, how much, how it got there, and has it been handled properly. Production and inventory levels can be more precisely aligned with actual demand.
• Reduction in incorrect chargebacks and disputes - Serialization makes it possible to precisely link returns and chargebacks to the specific original sale, so the correct amount is paid. The same holds for rebates.
• Reduction in counterfeits - especially valuable in developing economies where counterfeits are a major problem.
• Reduction in gray market/parallel trade - precise end-to-end visibility will dramatically reduce parallel trade.
Creative pharmaceutical companies will no doubt find other areas of value they can gain from these implementations and new capabilities, including various analytics on that treasure trove of new data.
The Outlook
Right now, virtually no one in the pharmaceutical supply chain is looking at how to get ROI beyond compliance with these regulations. The deadlines are looming and everyone is racing as fast as they can to get there and not get stuck unable to sell product. Nobody wants to be the one to test the regulators’ resolve in enforcing compliance with these rules!
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