US Drug Supply Chain Security Act How the US Drug Supply Chain Security Act Impacts Manufacturers Catering to American Markets

Author / Editor: Autor Christophe Devins* / Anke Geipel-Kern

The US Drug Supply Chain Security Act and the EU Falsified Medicines Directive both contain similar basic requirements in terms of serialization. However, while the overall objective – a safer drug supply chain – is the same on both sides of the Atlantic, the respective regulations differ widely in many aspects.

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The differences between visually readable data elements on pharmaceutical packaging for the US market and the EU market: serial number and date format.
The differences between visually readable data elements on pharmaceutical packaging for the US market and the EU market: serial number and date format.
(Source: Adents)

Both, US and EU, will require unique product identification at sales unit level in human-readable format and as a machine-readable data carrier using GS1 standards in form of a 2D bar code or data matrix. These need to be printed on the outer unit level packaging and verified before product enters the supply chain. Given that serialization-readiness in both markets is worryingly low, manufacturers need to start acting now in order to be compliant on time as there are few qualified solution vendors on the market.

The Deadlines: Big Bang vs Phased Implementation

Even though the US Food and Drug Administration (FDA) has announced a potential grace period of one year, the official deadline for serialization of sale units and homogenous cases officially remains November 2017. As many drug manufacturers catering to the US market still have no future-proof serialization solution in place, the industry welcomed this respite. However, this delay is likely to entail a complete zero-tolerance approach in 2018 as anyone not in compliance would technically have been in violation of the law for a full year.

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While scrambling to meet deadlines however, drug manufacturers need to remember that serialization affects all aspects of an organization, from Overall Equipment Effectiveness (OEE) to Standard Operating Procedures (SOPs), IT systems and other mission-critical aspects. To reduce impact on production lines during and after implementation, you will need a serialization solution that is interoperable with existing line equipment and devices of your brand of choice. Avoid vendor-lock for better scalability. You should also look for a solution that allows for easy changeovers with minimal impact on efficiency and risk for human error.

The proximity of the deadlines can be an advantage as some requirements are similar. While the Falsified Medicines Directive (FMD) 2011/62/EU will immediately be applicable in its entirety from February 2019, the US have opted for a phased approach with different milestones for different supply chain partners. The 11/2017 deadline applies to serialization at unit level and for homogenous cases. Aggregation is likely to be a business requirement from 2019 to manage product returns. Major US wholesalers have already sent letters to the manufacturers informing them that aggregation is going to be expected. It is important to keep this in the back of your mind when choosing a serialization solution today: in the future, your platform might need to be able to automatically handle more processes than ‘just’ serialization, for instance tamper-evident packaging in the EU.

Scope of the Law

The advantage of the DSCSA as opposed to the FMD is that it applies to all states equally, covering prescription drugs. The Falsified Medicines Directive applies to prescription drugs as well but the EU has published a whitelist of exempted pharmaceuticals. Given that a European Directive needs to be transposed into national law in each of the member states, application might vary as the FMD expressly leaves room for interpretation and certain national exceptions. Thus, the member states are free to add further drugs to the list covered by FMD requirements, meaning that medicines that do not need to be serialized in Portugal might have to be serialized in Poland.

Serialization and Coding Requirements

For the European market, randomized serial numbers can be generated on site by the manufacturer/ pharma company. A contract manufacturer might also get serial numbers from the pharma companies it produces for. Serial codes in the EU must not exceed 20 digits and be unique until at least one year after the expiry date of the pack or five years after the pack has been released for sale or distribution, whichever is the longer period. In addition to the Serial Number, the FMD requires Lot Number, Expiry Date and Global Trade Item Number (GTIN) to be printed in machine- and human-readable format.

As many EU countries are already using some form of coding, migrating towards a GTIN-14 format should be pretty straight forward. The real challenge will be the coding of multi-market packs as the FMD allows for additional data elements to be printed on the packs, like reimbursement codes (NHRN or REIM) or the German PZN (Pharmazentralnummer). This means that, just to be able to cater to the seemingly harmonized EU market, you will need a rather flexible serialization solution.

The United States require unique product identification and printing of National Drug Code, 12-digit serial number, lot number, expiry date in a 2D bar code or data matrix and, part of it, in human-readable format. For the American market, serial numbers don’t have to be randomized. Another, more cultural than legal difference is the packaging format: traditionally pills in the US come in bottles rather than blisters and cardboard boxes. German pharma companies therefore require serialization solutions that can handle different packaging formats and printing masks if they want to produce for both, EU and US markets.

Only a fully configurable serialization solution can ensure permanent compliance with current and future regulations, leaving you the flexibility to quickly react to regulatory changes or conquer new markets. Central configuration also has the advantage that production lines get information about serial numbers and printing configuration directly from a central server, avoiding unnecessary hard coding and subsequent requalification on line-level.

Verification and Reporting System

In the European Union, authenticity will be guaranteed by an end-to-end verification system supported by risk-based verification carried out by wholesale distributors. This means that, unless there is doubt regarding a product’s authenticity, verification of medicines in the EU is only required at point of dispensation. Compared to the US, this sounds easy but will nevertheless have profound impact on the supply chain beyond the production lines: Wholesalers and 3PLs will have to adapt IT systems and establish business processes for decommissioning (which is not mandatory in the US) and risk-based verification whereas retail pharmacists and hospitals will need to integrate verification in workflows.

In the United States, verification is required once the product leaves the manufacturer all the way through the supply chain at each transfer of liability.

At each change of ownership, the previous owner is required to provide the new owner with certain types of transaction documents (T3: Transaction Information, Transaction History and Transaction Statement). The FDA can organize product investigations and manufacturers then have only 24h to respond to inquiries. German manufacturers will have to connect to the European Medicines Verification System EMVS in order to upload serialization and product master data. This European Hub will communicate information directly to the national repository managed by the stakeholder organization securPharm.

Keeping control of your serial number generation strategy from the start of the serialization project implementation is therefore key. Bigger organizations with multiple sites and/or CMOs should opt for a level 4 system linked to a strong, highly configurable level 3 system. Whether producing medicines for the American market or for the EU, manufacturers, especially large-scale ones, will need a serialization system that is able to communicate with enterprise-level systems (i.e. ERP, MES) and central databases. For Marketing Authorization Holders (MAH), safe connectivity with third parties like authorities and/or 3PLs incl. easy on-boarding is a must as well.

The Big Data Issue

These new regulatory requirements will have profound impact on the pharmaceutical industry. Given the differences between FMD and DSCSA, compliance represents a major challenge requiring flexibility, effort and investment for companies producing prescription medicines for both markets.

Serialization affects more than just the packaging lines. What many companies fail to understand or understand too late is that, in fact, serialization is a complex data management issue that impacts multiple departments within the organization. Serialization and track&trace processes generate an immense amount of data: serialization data for hundreds of thousands of units per year, plus event reporting in different formats for different authorities. Pharmaceutical companies therefore need a system that is designed for big data, to safely store, manage, exchange and report huge quantities of data. Only enterprise-level solutions can offer this type of data management capabilities.

Today, there are solutions that open up new horizons beyond regulatory compliance in terms of data analysis and machine learning that improve supply chain visibility and help optimize processes. With the right solution, pharma companies and CMOs will be able to accelerate the digital transformation of the pharmaceutical supply chain for increased patient safety and ROI.

* * The Author is Founding Partner & CEO at Adents

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