Supply Chain: Scanning the Future

Nov 01, 2013


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The state of the pharmaceutical supply chain can be summed up in three words: serialization is coming. The era of "track and trace" is upon us. Although it is unclear at this moment what level of tracking will ultimately be required, companies need to be prepared for regulations that will alter the way pharmaceuticals are packaged and shipped. New laws will raise your risk profile—particularly in ensuring product safety.

The changes are occurring as the act of manufacture itself has become a strategic global priority for Big Pharma. Unlike a decade or two ago when much of the production was handled in-house, pharma is relying more on contract vendor manufacturing to keep pharmacy shelves full. As more and more of the R&D and manufacturing functions are outsourced, the importance of a safe and secure supply chain becomes ever more prevalent.

In response to some high-profile thefts and product counterfeits that have occurred over that past few years, governments around the world have turned their attention to securing the supply chain through regulation focused on product serialization.

Currently, during manufacture every batch of pharmaceuticals is assigned a lot number. Each container of product produced in that batch has the same lot, or serial, number. This allows the manufacturer some ability to track its product as it moves through the supply chain to its final stop at the pharmacists' bench. Product is being followed, but it is being tracked with a wide net. If there is a problem with the lot from theft, tampering, or counterfeiting the entire lot must be recalled—there is no way to differentiate individual containers produced in the same lot.

"The issue with pharmaceutical cargo is not so much the impact of the product itself that is stolen [or counterfeited]," says Don Hsieh, director of commercial and industrial marketing at Tyco Integrated Security. "The products are made in lots. If that particular lot has to be recalled the cost will be in multiples of the original loss."

Under the upcoming regulations, product will need to be traceable at the unit level. Giving each unit it own serial number will allow individual packages to be tracked up and down the supply chain, allowing for greater security and lessening large-scale recalls.

The United States and Europe have fallen behind Turkey, Italy, Chile, and even India and China in the area of regulatory requirements for track and trace and are in the process of playing catch up. Although each entity is proposing different levels of traceability, one thing remains constant: increased regulations are on the way.