There has been plenty of buzz these days in pharma supply chain conferences about serialization and electronic pedigree systems. The U.S. Congress has again started discussing development of a nationwide Track & Trace (T&T) system for pharma products that would replace various state programs. The House Energy & Commerce’s Health Subcommittee held a hearing last month in April on T&T and heard testimony from the FDA, manufacturers, distributors, and pharmacists. The legislation would establish lot-level tracing requirements for pharma manufacturers, wholesalers, distributors, pharmacies, and re-packagers based on changes in ownership. The proposal would also require manufacturers to serialize prescription drugs at the at the unit level.
Pilot projects and biannual public meetings would be used to build consensus regarding how and when to move to unit-level T&T.

While the House and Senate proposals are similar, their end result could be different, possibly delaying passage. Congress had tried before to implement a nationwide T&T system for drugs. Section 913 of the FDA Amendments Act of 2007, which included reauthorization of the prescription drug user fee act (PDUFA), set the framework for the identification, validation, authentication, and tracking and tracing of prescription drugs. The target date for implementation was March 2010 but this section was removed. Congress also removed T&T legislation from PDUFA reauthorization legislation in 2012.

One thing that will spur Congress to action is an incursion on its authority; this latest attempt at a T&T system comes as California and other states moved forward with their own tracing systems. California is leading the charge and the state’s E-pedigree law is scheduled to begin in 2015. Pharma manufacturers would like to see Congress pass tracing legislation before they will need to begin establishing procedures to comply with the California law, which could take as long as 18 months. California’s system would record each change of ownership from the manufacturer to the pharmacist in an interoperable, electronic system. Some pharma manufacturers have already begun developing an electronic tracking system in preparation for the California law. “They are preparing packaging sites, distribution centers, business and information technology systems to serialize and track & trace pharma supply chain products so that they can comply with the California E-pedigree law,” one pharma member told the health subcommittee.

Pharma’s supply chain is facing a persistent and increasing threat from counterfeit, misbranded, adulterated, or diverted prescription drugs, so government leaders, politicians, and executives from major drugmakers are driving efforts to develop reliable T&T methods for prescription drugs. Because of this growing threat, many nations have started to address vulnerabilities in the supply chain by enacting legislation to require a comprehensive serialization system. This growing movement toward utilizing serialization to track drugs will inevitably result in investigations of companies that are found to be receiving or sending un-serialized drug shipments.

Many big pharma companies have already started to focus on implementing serialization strategies and defining their needs to trusted partners with production line serialization solutions. All drugmakers will be affected by serialization regulations. Wait-and-see if not an option; it’s imperative to be a leader in the industry. The basic idea behind serialization is very easy to understand but very difficult to implement in the manufacturing process. It requires a comprehensive system to follow the passage of prescription drugs through the entire supply chain.

A complete serialization program represents the complete history of a given product’s chain of custody from the manufacturer to the point of dispensing. Much of the early work around implementing solutions has focused on support of serialization using electronic solutions, in terms of applications for managing serialization data, printing of human-readable markings, and sensory technologies for verifying these markings. Although there are many advantages in early implementation of a serialization program, there is still much less clarity as to how laws and regulations will evolve in the near future.

Pharma manufacturers are investing in ways to set up serialization systems. There are several factors that influence the complexity, risk, as well as cost of implementing and managing serialization solutions, including regulatory uncertainty, ongoing technological evolution, and infrastructure requirements. Prescription drugs are distributed to every place on the globe. Drugs are produced, distributed, repacked, and sold by hundreds of thousands of manufacturers, including CMOs. This complexity creates many questions about how best to address serialization and how it will affect the supply chain and distribution channels.

It remains to be seen as to how and when serialization laws will be implemented, and how all pharma manufacturers (including CMOs), distributors, and retailers will be ready to comply with them. The industry must be ready to address these technological challenges in a timely fashion!