Drug Companies Face Year of Reckoning for Serializing Products

By Dave Vaczek
“e-Pedigree cliff” looms for manufacturers sitting on the side lines.
Pharmaceutical manufacturers that have been hoping for a reprieve from e-pedigree requirements will have to jump into the game in 2013, if California’s deadlines for product serialization hold, as most observers believe they will.
Companies can expect up to a two-year process for planning and implementation depending on the number and complexity of their production lines. And as the state’s first deadline of January 2015 draws closer, solution providers will be hard pressed to help manufactures if they do not get started this year.
Most companies missing the deadlines will likely face increased distribution costs including fine schedules for non-compliant product shipped in California, provided for in the state’s pedigree law.
A provider of track-and-trace solutions for line-level serialization and data management, Xyntek Inc. is implementing the Antares System  with an installed base of over 270 systems and 114 fully aggregated lines in Turkey, France, Brazil, and China.  It is promoting its turn-key solution into the U.S. market.
“Companies have no choice but to start with planning since there is so much prep work to be done ahead of time. A full multi-level eco-system of technologies and disciplines have to be united and integrated in order to make this all work,” says Mac Hashemian, Xyntek’s president and CEO.
Companies will benefit by methodically mapping out the functional specifications prior to spending too much time with any one vendor. Design documents have to be developed as different technologies and vendors are evaluated.  A company has to the accomplish integration of the chosen technology into their lines and into the IT infrastructure for data management and for sending pedigree information to trading partners, Hashemian says.
“I’ve seen eight lines beside each other that each operate a little bit differently. They have to be configured differently for each process and need.”
“At the end of the day, you have four or five major product/solution providers—everybody is going to be slammed back,” Hashemian adds.
Large pharmaceutical companies have implemented parts of the solution.  But over 70% of pharma companies do not currently serialize any product, D. Bruce Cohen, principal, PackTechPlus LLC, advised an audience at PackExpo International last October.
“Most of the small- and mid-sized companies  I work with are literally sitting on the sidelines waiting for something to happen.  California has pushed this issue to the boiling point. If you are a manufacturer and haven’t started on serialization, you are late. And the more you delay, the more it will cost you,” he said.
“There are a finite number of resources.  If you don’t make a decision now, these resources will not be available. And don’t look for a deadline reprieve,” Cohen said.
Communication driven by a champion from the top is critical in a resource-intensive serialization project. Companies should allow three to six months to select a solution provider and obtain a quote. Line retrofitting is a 11 to 22 month process depending on line complexity, Cohen said.
“The toughest part is internal data management and system integration [at line and enterprise level]. Take the smallest, simplest line you have and manage that as your pilot where you do all your design work. You can make a decision to your advantage by focusing on large-volume products for outfitting lines [for serializing 50% of product by 2015],” Cohen said.
“Serialization will change everything you do on the packaging floor [and in warehousing and distribution].  All of these business processes and protocols will need new SOPs and revalidation.  [And] you have to make sure what you do is compatible with your supply-chain partners,” he said.
The prospect for relief from California’s requirements and deadlines through preempting federal legislation diminishes by the month, though supply-chain participants and legislators continue to work for national track-and-trace legislation.
A 117-page discussion draft presented late last year by the Senate Health, Education, Labor, and Pension committee and the House Energy and Commerce Committee lacks the specifics of the RxTEC act, the collaborative effort by supply-chain parties for a national pedigree regulation that failed in July.
The latest measure is a fill-in-the-blanks document that includes “hundreds of policy options,”  said Dirk Rodgers, president, Dirk Rodgers Consulting (www. RxTrace.com).
“[The latest discussion draft] would preempt all existing state laws. But it is designed to accommodate all existing desires in the supply chain, many of which are conflicting,” Rodgers advised a PackExpo audience.
Conceived as a first-stage approach to track and trace, the RxTEC Act—dubbed “Pedigree Lite”—ran afoul of proponents, including FDA, of a California-like pedigree system based on coding and tracking of product eaches.
Supported by a coalition of drug manufacturers, wholesalers, and pharmacies, RxTEC  is “ a pragmatic first step” toward a solution, Steve Drucker, director, global technical services, Merck, said as a panelist at the Healthcare Compliance Packaging Council’s November Pharma Workshop.
 “Manufacturers are not happy with it but believe it is a reasonable step to move us forward . We see a national law as a strong positive. We want the playing field level,” Drucker said.
A proposal that includes the lot number and expiry date, along with a serial number, in a bar code, RxTEC provided “a convergence of technology with what we do on a day to day basis.”  The solution enables lot level pedigree, with a serial number in place for use in applications such as returns, Drucker said.
“Now there is no lot control in the system-- for recalls we do a broadcast. [Supply chain lot records would] provide some granularity,” Drucker said.
“Pharmaceutical manufacturers have the most skin in the game. We have to pay a phenomenal amount not just to bar code but [for] managing the data that goes with it. It has to be an interoperable secure system to transfer data with integrity. Our concern is, are we spending all this money and not getting value out of it? Will products truly be protected?,” Drucker said.
If some manufacturers are hanging back on their serialization plans, others are responding to the inevitable requirement for technology investment.
“It is highly doubtful the California law is going to change Even if it were pushed back a year, companies still have to get going with upfront design and planning,” says Elliot Abreu, senior vice president  of Xyntek.
“We are seeing everyone from brand owners to technology vendors gearing up to move forward with a lot of activity in planning and funding being set aside. For these companies, 2013 is the starting point,” says Abreu.
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