Vision and Visibility: Converting Compliance into Competitive Advantage
The pharmaceutical industry’s understanding of serialization is maturing as companies slowly begin to recognize the added business value supply chain traceability can provide. Historically, the industry’s focus on serialization has been driven by the need to satisfy evolving regulations. However, progressive companies are finally realizing that the benefits of traceability extend far beyond compliance.
Serialization unlocks an end-to-end supply chain visibility that has the potential to yield significant business gains. Through the smart deployment of fully integrated and validated solutions, forward-thinking organizations are looking at the bigger picture, and using serialization as a catalyst for operational efficiency, enhanced partner engagement, and stronger patient-centered care. It’s a sensible move. With the clock ticking toward the enactment of major new regulations to strengthen the medicines supply chain, the industry has a great opportunity to convert compliance into competitive advantage; but exploiting it is all about selecting a technology partner that can give you the visibility to support your vision.
The regulatory drivers for serialization are well-understood. Between 10-15 percent of the world’s drug supply is counterfeit, causing the avoidable deaths of more than 100,000 patients each year. Patients — and governments — need reassurance that medicines are authentic and safe. Imminent regulations, such as the Falsified Medicines Directive (FMD) and the Drug Supply Chain Security Act (DSCSA), are designed to combat counterfeit medicines, mandating complete visibility of a drug’s journey from manufacturer to patient. Serialization, a core requirement of both FMD and DSCSA, will not only enhance patient safety, it will help eradicate the hundreds of billions of revenues pharma loses every year due to counterfeit practices.
Serialization is about much more than being compliant. It adds four orders of magnitude to supply chain visibility, giving pharma companies the opportunity to increase the value they provide to stakeholders involved in a drug’s journey from bench to bedside. That journey typically encompasses manufacturers, contract manufacturers (CMOs), logistics providers, wholesalers, distributors, dispensers and, ultimately, patients. Serialization has the potential to add value every step of the way — providing transparent, reliable and accessible data to drive efficiencies, manage and maintain stock control and assure product provenance.
The imminent addition of individual serial numbers to every prescription medicine represents a seismic shift for supply chain management. Today, companies have batch-level visibility of their medicines — meaning that, every day, several thousands of their products are indistinguishable as soon as they leave the warehouse. Tomorrow, with serialization, every product will be identifiable as a distinct entity; companies will know what it is, and (system rules permitting) where it is, where it’s been and where it ends up. Such end-to-end visibility could, beyond satisfying regulations, have powerful, high-value applications.
The introduction of serialization presents significant challenges around business integration and risk. Companies need to ensure that the data associated with every unique entity stays with that product, with full integrity, as it moves through the supply chain. It’s a complex process that, without robust validation and integration, is prone to risk. But getting it right has the potential to transform the value pharma provides to every stakeholder.
#1: Value to the patient
If we reverse engineer the supply chain journey and begin with the end-user, it’s easy to visualize a future where patients can reap the value of serialization. At present, the emergent regulations don’t require manufacturers to give patients access to information on product authenticity. Patients have to trust that the dispenser issuing the product has verified its legitimacy. The approach will not last forever. Over time, consumers will expect to be able to scan a barcode on a drug to access further information on its provenance and use. We’re not there yet, but in a world of patient empowerment, it’s an inevitable destination. The technology is already there to support it.
Ultimately, the vision of every pharma company is to be patient-centered. Serialization provides a new means of achieving it.
#2: Value to the dispenser
FMD and DSCSA certainly strengthen product visibility at the dispenser level. But there remain gaps in the regulation that good technology can overcome. In the US, dispensers are only required to validate ‘inbound’ products as deliveries are received. In the EU, serial numbers are validated at the point of sale. However, in each case, the law doesn’t require dispensers to track and trace products within their own enterprise. This can mean that dispensers lose visibility of products once they’ve been received and validated. Although visibility in the EU reappears when the product is dispensed, the information vacuum in between is a missed opportunity.
Full track and trace capabilities can empower dispensers to manage stock control and inventory more efficiently. This reinforces patient safety and helps businesses maintain profitability with better, real-time analytics. Crucially, it provides added value beyond regulatory requirements.
#3: Value to the wholesaler
Good serialization software can help manufacturers solve a major challenge facing one of their most powerful customers: wholesalers. There’s currently widespread concern amongst wholesalers that serialization could slow down their operations. The regulations only require manufacturers to let wholesalers know which serial numbers they have received. In some cases, manufacturers are refusing to give wholesalers aggregated ‘case IDs’ that detail all the serial numbers in a given case. Consequently, wholesalers – who didn’t previously need to open cases – are now having to do so. This impacts the velocity of the wholesaler’s business. Smart serialization software makes this easier – allowing manufacturers to manage aggregation and wholesalers to capture aggregated case data, and maintain compliance, via a single barcode scan.
Similarly, full track and trace capabilities can help wholesalers manage operations more efficiently. Wholesalers typically need to break up pallets so that cases can be sent to a variety of locations and retailers. Maintaining visibility of individual units is critical. Effective solutions can help wholesalers maintain accurate connections between purchase orders and customers. Moreover, robust visibility can help other complex challenges such as reverse logistics and audit requirements.
#4: Value to the manufacturer; brand owners and CMOs
Finally, end-to-end traceability provides terrific value to manufacturers. With pharma companies increasingly outsourcing to CMOs, brand owners often have limited visibility of remote activities. Serialization solves that challenge. With a good end-to-end solution, and collaborative business partners, manufacturers can benefit from real-time analytics of performance across their partner network. How many units have been manufactured? How many shipped? Were there any issues? Moreover, companies can access intelligence on reverse logistics — enjoying full visibility of returns from wholesalers or dispenser and the reasons for them. Such visibility can also help with complex pricing or ‘diversion’ challenges.
Catalyst for Competitive Advantage
Regulatory compliance is undeniably the primary driver for the deployment of serialization solutions. However, with organizations already spending heavily to refit their manufacturing lines for serialization, serialization software must provide significant value beyond compliance. The best systems will be those that focus on data validation and integration to create a ‘single version of the truth’ for stakeholders across the supply chain. Moreover, they’ll provide full end-to-end visibility to help drug companies — and all their partners — improve operational efficiency, increase profitability and give patients safe, timely access to authentic medicines. That’s how you convert compliance into competitive advantage.