By Gail Dutton, contributing editor
Pharmaceutical executives are hustling to finalize plans to implement the Drug Quality and Security Act, which became law last November. Although that law was seen as allowing extra time to serialize packaging lines, it actually moves up some deadlines and adds additional requirements that are causing pharmaceutical companies to adjust their serialization strategies and implementation timelines.
The industry is uncovering a lot of unexpected complexity that may have a dramatic effect on manufacturers,” says Rob Young, Accenture’s life sciences North America lead for serialization. Compressed timelines are the biggest concern, followed by added requirements.
For example, the California Board of Pharmacy requirement — the de facto U.S. standard before the federal mandate was enacted — called for complete unit-level traceability for dispensers in 2017. The new federal mandate extends that deadline to 2023, but requires product identifiers to be added to each package and homogeneous case of product by November 2017. It also adds interim steps, so that the first deadline manufacturers must meet is Jan. 1, 2015.
By 2015, manufacturers must incorporate product transaction data into a single document that is available, either electronically or on paper, each time ownership is transferred. This document must include transaction data listing lotlevel information, a complete transaction history, and a transaction statement and must be maintained for six years after the transaction. By November 2017, that information must be available electronically, and the product identifier must be affixed or imprinted on the label at the product and case level.
In light of these changes, “Big companies are moving faster now. They recognize they have only a limited time in which to get things done,” Greg Cathcart, CEO of Excellis Health LLC, says. “They can’t slow down.”
While the federal mandate avoids a state-by-state legislative patchwork, it extends serialization requirements to entities that otherwise would not have been affected. As an example, Cathcart cites large and regional wholesalers that could manage the California requirement by deploying solutions to sites that shipped to that state, but which now must deploy solutions for their entire networks. “In some cases, this will increase the number of sites affected by as much as 75 percent,” he says. Healthcare providers unaffected by the California mandate now must develop track-and-trace plans for their inventories. Some regional healthcare providers, for example, have more than a dozen pharmacies they must prepare for serialization.
Pharma Focuses on Near-term Requirements
“At Pfizer, we’ve been preparing for the California mandate for several years, so we are able to leverage that work to prepare for the federal mandate,” says Peggy Staver, director, product integrity. The Pfizer team is continuing to deploy serialization throughout Pfizer packaging lines and is building out a cloud-based IT solution that integrates with the company’s contract manufacturers to ensure Pfizer meets the November 2017 compliance deadline for lot-level serialization.
“For the pharmaceutical industry to meet the 2015 deadline, there’s a great deal of work that must be done in a short time frame,” Staver says. “Within Pfizer, there are some near-term requirements we need to work toward. We’re moving forward with the development of our IT enterprise solution and are reassessing the effects of the new law on our packaging lines’ serialization plans. While some capital investments required to meet the 2023 deadline may be deferred, we’re not slowing in any way.”
Stephen Kovary, senior director, operational excellence in supply chain and technical operations at Daiichi Sankyo, Inc., says Daiichi’s approach to serialization and data aggregation hasn’t been affected. However, he adds, “We have reevaluated our implementation schedule and have delayed some of those activities based on meeting the new federal legislative date of November 2017, versus the California Board of Pharmacy dates of January 2015 and January 2016. Our focus has shifted to the federal lotlevel pedigree requirement, which has a January 2015 due date.”
“To meet lot-level pedigree compliance, companies have 13 data elements that must be incorporated,” Cathcart points out. “These elements include the name of the authorized reseller, product quantity, lot number, and container size. The information must be stored and made available to the FDA within 24 hours.” That means a database of authorized trading partners must be developed, he adds.
“Additionally,” Cathcart says, “wholesalers must be able to receive the data, make it available for FDA audits, and send it with their sales information downstream to their customers. However, the FDA guidance interpreting these requirements isn’t due until Nov. 27, 2014,” one month before mandatory implementation.
“A wait-and-see approach will not leave us much time to implement a proper solution,” Kovary says. Daiichi is assessing the requirement and identifying options now.
Hussain Mooraj, global managing director, life sciences supply chain and ERP (enterprise resource planning) for Accenture, cautions, “We expect this lotbased regulation to potentially disrupt the industry by forcing manufacturers to divide their resources between this requirement and maintaining momentum for unit-level serialization.”
Third-Party Issues Involved
The federal mandate also includes a provision to deal with suspicious and illegitimate products. It calls for quarantine, an investigation with trading partners, FDA notification with 24 hours, and, by November 2017, the ability to verify the product at the package level with a standardized numerical identifier. For some, that’s a backburner issue that will be addressed in concert with their third-party distributors.
Pfizer is engaging with the FDA and industry to better understand the requirements regarding suspect and illegitimate product. “To some degree, we have a system in place,” Staver says. “For example, today if a pharmacy sees a suspect product, it phones us to check the lot number, discuss any recent packaging changes, and determine appropriate next steps.” To implement the new approach, the FDA must provide additional guidance regarding identification and disposition of suspect and illegitimate product by May 2014. That leaves manufacturers only a few months to implement compliance strategies, she points out.
Another challenge, according to Young, is that the FDA now has oversight of processes and operations in which it may not have deep experience. “Therefore, companies may be forced to spend extra resources to make their processes more straightforward and consistent (both in-house and with the industry). For example, in the logistics and supply chain space, many organizations — especially the smaller ones — haven’t thoroughly documented their processes. So, when FDA regulators ask for details of a particular process, like they do for manufacturing, many companies may not be ready to reply. Therefore, life sciences companies must become more vigilant [about documenting their supply chain processes]."
Use Serialization to Increase Visibility
Mooraj encourages companies to look beyond the deadline and focus upon the opportunities serialization offers. “The companies that will succeed are those with concurrent strategies to meet the requirements and to extract value by increasing visibility into the global supply chain,” he says. “Don’t lose sight of longer-term efforts. Think about ways to extract value from these investments.”
The data required for serialization should be in demand throughout the supply chain. The level of tracking enabled by serialization enables forward-thinking companies to use that data to gain more comprehensive understanding of the entire supply chain and, for example, minimize distribution bottlenecks and more tightly target recalls. Additional uses may be identified once the FDA guidelines are developed.
To meet lot-level pedigree compliance, companies have 13 data elements that must be incorporated.
Greg Cathcart, CEO of Excellis Health LLC
The immediate challenge, Kovary says, is determining how best to collect and move this data while meeting the yet-to-beestablished FDA requirements. “While we can’t predict the exact FDA requirements, in today’s sophisticated electronic world, this hopefully would be nothing more than determining what data to extract and what report format to use.”
Incorporate a Global Approach
Traceability is a global need, and “The U.S. serialization law lags behind those of other countries,” says Michael Lucas, president and founder at Frequentz, a track-and-trace technology specialist. Given the global proliferation of serialization regulations, “This law has marginal to no impact on the overall global traceability requirements and planning efforts. Serialization laws and regulations have already been piloted, if not fully executed abroad.”
Serialization requirements are in various stages of development in the EU and in its member nations, as well as in Turkey, India, China, Brazil, Argentina, and Korea. The most recent change occurred in Brazil, which in December published RDC 54/2013, specifying trackand- trace requirements. According to that document, manufacturers must provide serialization and tracking data for three batches of products by Dec. 10, 2015. All pharmaceuticals must be serialized and tracked by Dec. 10, 2016. “For a growing market, that’s a critical milestone,” Young says. The first public hearing discussing implementation was held Jan. 23, 2014.
With so many different reporting requirements throughout the world, onesize- fits-all responses are inadequate. “You have to take a harmonized approach to compliance,” Young says. “Think from a global perspective, and then break the program down for specific countries.”
As implementation deadlines approach, “There’s no more breathing room,” Mooraj adds. “Manufacturers need to get this right.”