Serialisation: The Future Role Of The CDMO

The pharmaceutical industry is increasingly falling victim to counterfeit medicines, reimbursement fraud and theft throughout the supply chain. A 2013 World Health Organisation (WHO) initiative launched a global surveillance and monitoring system to encourage Member States to report incidents relating to Substandard, Spurious, Falsely labelled, Falsified and Counterfeit (SSFFC) medical products, with the aim of developing a more accurate and validated assessment, both of the scope of this issue and the harm it has caused. By January this year, over 920 medical products had fallen under one of these categories, a figure which represented all main therapeutic categories and which included both innovator and generic medicines. The challenges posed by this have led to the introduction of serialisation requirements in most of the world’s major pharmaceutical markets.

Many industries are in a constant process of acquiring new safety and standards regulations and pharma is no different, however responding promptly to new track and trace requirements can be a complex and time consuming task. As new regulations loom in both the US and Europe, it will hopefully prove useful for pharmaceutical companies to know what to expect from their CDMO suppliers in the near future.

A Challenge CDMO Businesses Can Rise To

Counterfeit medicines are widespread, offering unscrupulous distributors high profits at a relatively low risk. While there are obvious health and safety risks to consumers, there are also other issues for pharmaceutical manufacturers and retailers to deal with. Counterfeit products can reduce demand for genuine goods, lowering revenues. Plus, to uphold their brand reputation, companies often have to get involved in product recalls, investigations and legal action – a tremendously costly process in terms of both time and money. What can be done?

The CDMO represents an important part of the pharmaceutical supply chain, particularly for smaller, mid-sized and virtual companies, and must do its part to ensure security is maintained throughout the process, from the initial production and packaging of medicines to their eventual consumption by patients. Making changes now will be a measure that will save time and effort in future. By November 2017, all licensed drug products sold in the U.S. must be serialized to comply with the U.S. Drug Supply Chain Security Act. And similar changes in Europe are afoot, with the same legislation requiring the serialisation of licensed drug products set to take effect from early 2019.

This will require CDMOs to secure a robust serialisation process. This might mean using multiple production lines in different locations, which must be equipped with the equipment – both software and hardware – to perform serialisation in line with varying global regulations and client specifications. Teams must be trained and the unique needs of each client must be attended to; as an example, Recipharm know that 85% of their future production will require serialisation.

 Understanding the market requirements is becoming even more important than choosing the right serialisation solution provider. Whilst Big Pharma tends to have a solid grasp of regulations due to specialist in-house compliance teams, smaller and mid-sized companies often have to rely on their CDMO partner for advice to clarify the varying requirements.

CDMOs can be tasked with helping drug developers assess their own needs. This means answering questions such as: how many products will they need to serialize and for which markets? Will they require randomised serial numbers to be generated by the CDMO, or will they be generated centrally and distributed to manufacturers? Logistical issues such as how the pharmaceutical company sends its serial numbers and master data to the CDMO then come into play, including the integration of customers’ IT systems to ensure data can be easily transferred. By looking at every stage of the process and identifying potential pitfalls from the very start, the path towards compliance becomes clearer, with hurdles (hopefully) removed ahead of time.

Potential Hurdles...

There are three looming obstacles for pharma businesses looking to tackle counterfeiting by implementing serialisation.

1. Timing With new legislation looming, achieving an effective timeframe for serialisation is critical. Many people tend to underestimate the time a serialisation rollout will take, thinking it can be achieved in a couple of years. However, the European Stakeholder Model (ESM) suggests that in fact, four to five years is a realistic timeframe for implementation. This means it’s important to act now, or risk being left behind by more proactive competitors. You should look to create a clear plan with staged deadlines for implementing serialisation across your sites, looking to equip production lines and train staff far ahead of time so potential problems can be addressed.  

2. Cost As serialisation is going to be required across the pharmaceutical sector; some smaller players are grimacing at the potential costs involved. The new technologies and processes which will be needed will bring obvious financial burdens, but CDMOs can and should work with their customers to reduce the burden where possible. To stagger the costs of serialisation across an on-going supply agreement can make it more manageable for a smaller business with cash flow issues.

3. Disruption Thirdly, potential disruption of production lines and operators as they adjust to new systems and initiatives should not be overlooked. Productivity declines should be factored in when forecasting to set targets in the short term, as time will be needed to adapt to new processes. This will avoid any morale drop if regular targets are not met. This highlights why you should endeavour to ensure serialised production lines are already operational ahead of the legal requirements to eliminate any downtime issues in the early stages.

Business owners shouldn’t be surprised if requirements grow and change over time with the development of new legislation. CDMOs should look to work together with their customers now to map out each of their unique requirements and assist in the process of achieving compliance. Without proper planning now, disruption to product supply could mean a loss of sales for pharmaceutical companies. CDMOs that place serialisation firmly on their agenda will find a competitive advantage in an increasingly crowded sector.

That in turn will require hiring the right talent – first and most obviously, specialists in serialisation who have the knowledge required to plan and implement the process. However, there will also be a strong need for high-calibre Business Development personnel to help convey he benefits of this added value service to clients, not to mention Project Managers to help oversee the smooth rollout of serialisation and minimise losses due to the factors mentioned above. Any talent gap during the process of switching to serialisation can make the whole process take up more time, energy, and indeed revenues, than would be necessary had the right people been brought in in good time. With this being said, recruitment may need to be the first priority of any business wanting to benefit from the expected rise in demand for serialisation in the near future.