On the Right Track

Published on: 
BioPharm International, BioPharm International-06-01-2019, Volume 43, Issue 6
Pages: 42–44

Proactive approaches that consider long-term supply chain security compliance are recommended to ensure companies stay on the right track.

Despite there being various terms used, counterfeit, falsified, fake, and so on, a drug that has been fraudulently manufactured and distributed to mimic an authorized medicine, whether branded or generic, poses significant risks to companies and, more importantly, to patient health. The World Health Organization (WHO) estimates that one in 10 medical products are substandard or falsified in low- to middle-income countries, based on a literature review of previously published papers (1).

In financial terms, as reported by Strategy&, PricewaterhouseCoopers’ strategy consulting business, falsified medicines represent a lucrative proportion of illicit goods sold within the global market, estimated to range from EUR150 billion to EUR200 billion (US$163 billion to $217 billion) per year (2). Given the size of the market and the risk to patient health, many authorities have been implementing regulations to protect the security of the supply chain.

“The proliferation of online pharmacies, and the Internet in general, has meant that the pharmaceutical black-market has trickled into mainstream society and consequently become a widespread issue,” asserts Staffan Widengren, director corporate projects, Recipharm. “As a result, health regulators have established new legislation and surveillance strategies around supply chains in a bid to prevent and minimize the circulation of falsified drugs. Without supply chain security measures, we cannot effectively track or determine the legitimacy of a drug product.”

“Supply chain security is a core end-to-end capability in a business to ensure that all products reaching the patient are safe, compliant, and delivered on time and in full,” adds Roddy Martin, chief digital strategist, TraceLink. “Most importantly, the elements of risk and security are proactively tracked across the end-to-end business so that any deviations are detected quickly and responded to, without impacting the continuity of supply or impacting patient safety.”

Security of the supply chain is critical for all companies that offer products and services to consumers, concurred Ettore Cucchetti, CEO of ACG Inspections, particularly in terms of counterfeit products, product damage or theft, and smuggling. “For the pharmaceutical industry, which is dealing with products and services directly impacting human health, supply chain security becomes more crucial in terms of a company’s product integrity, brand image, and, ultimately, its bottom line,” he says.

Different approaches

As Michael Pisa and Denise McCurdy reported in their policy paper in February 2019, at a basic level there are two traceability models that can be adopted (3). One model is to have a point-of-dispense verification approach where verification occurs at the top of the supply chain and then also at the bottom. The other model is full traceability, which is more complex in nature as the tracking and tracing of products occurs every time they change hands within the supply chain.

Many countries and regions have already signed a traceability approach into law, including China, India, Turkey, the European Union, and the United States, and approaches vary from country-to-country. “Verification and full traceability can both facilitate and improve supply chain security,” says Widengren.

The EU and US, for example, chose the adopt different approaches. The former employing the point-of-dispense verification approach, while the latter is using the full traceability approach. “In the EU market, serialization requirements were implemented as part of the falsified medicines directive (FMD) regulation to protect the safety of patients,” adds Widengren. “Essentially, through serialization, dispensers gain the ability to verify product legitimacy before a drug reaches the patient by scanning the unique identifier included on the pack. 

“Whereas, track-and-trace systems can not only determine the authenticity of a product at the point of dispense, but also track the movement of products and prohibit falsified medicines from progressing through the supply chain,” he continues. “Each partner involved in getting drugs to market can scan unique identifiers to access data around the journey of medicines and verify the authenticity of medicines as they move through the supply chain.”


Dealing with data


Each traceability approach being implemented across the world has inevitably impacted industry, in particular as a result of the need to deal with vast amounts of data. “Due to the sheer amount of data generated by serialization requirements, organizations have been required to evaluate and adopt software technology solutions to create, capture, store, report, and share compliance data at scale,” notes Martin. “This question of technology scalability remains a real concern when it comes to simply meeting the requirements of these legal mandates themselves, which is one of the critical reasons that a cloud-based, network platform is optimal,” he continues. 

In agreement, Widengren states that cloud-based networks have been found to be the most successful in terms of connecting supply chain partners and enabling the exchange of serialization data. “As well as enabling compliance with serialization regulations, these platforms also offer the opportunity for businesses to improve supply chain visibility and gain additional value from their investment,” he says. “By giving companies greater insight into their operations, businesses can make more informed decisions in areas such as supply and demand forecasting, product recalls, and even achieve engagement with patients.”

Additionally, Martin emphasizes that as industry looks to the future and leveraging the data gained from serialization, there will be a shift away from the fragmented silo nature of the bio/pharma supply chain that has existed previously as a fractious supply chain hinders visibility and impacts performance. “Instead, serialization should be used as a lens to look at the end-to-end digital supply chain and, if done right, will lead to transformative benefits in terms of increasing business value through more collaborative supply chains and end-to-end visibility into value networks,” he explains.

“Blockchain will be considered as one of the critical factors when it comes to selecting a supply chain partner in the future,” adds Cucchetti. “Product traceability and recalls are known to be the biggest challenges for most industries, and blockchain landscape can be used to secure the transaction between the supply chain partners. With blockchain, companies can address counterfeit issues through the authentication process, and they can perform product recall smoothly. This can help them to identify the issues in logistics and distribution channels, using the complete supply chain data to optimize the supply chain.”

Regulatory initiatives

“Regulatory and government bodies are looking into all available and emerging technologies for securing supply chains,” notes Ettore Cucchetti. “Each regulatory body has multiple objectives, but the preliminary goal remains the same-to secure the product from manufacturer to end consumer.”

Giving some examples, Cucchetti highlights Russia, which has mandated crypto tail into barcoding processes; Indonesia, which is assessing product authentication techniques; and the US, which is looking to evaluate blockchain with serialization. “Currently, most of the regulatory requirements are focused towards serialization and track and trace, as well as mandates for the pharmaceutical industry,” he says. “Going forward, it is likely that similar regulations will be applicable to all other industries as well. Government and regulatory bodies will be more stringent in regulation-considering consumer health and safety requirements. As the technologies evolve, each government will be evaluating possible technological implementations to secure supply chains to fight against counterfeiters, and also to have complete visibility of the industry.”

Specifically focusing on the US and its exploration of methods to enhance the safety and security of the supply chain, Martin discusses FDA’s Drug Supply Chain Security Act (DSCSA) pilot program. “Recently, FDA announced a pilot program project seeking innovative and emerging approaches for enhanced tracing and verification of prescription drugs in the US to ensure suspect and illegitimate products do not enter the supply chain,” he confirms. “TraceLink was accepted into the pilot program and will focus on two workstreams; blockchain and digital recalls.”

Companies of varying sizes will be included in the TraceLink pilot project, covering the end-to-end supply chain. “Together, through network connectivity and innovative software solutions, participants will explore and collaborate on ways to improve the safety and security of the drug supply chain and will use early stage technology to do so,” Martin adds.


Safeguarding future supply chains

“Companies should always be mindful of new ways they can safeguard their supply chains, especially when the political landscape is in a state of flux,” emphasizes Widengren. “It is essential to consider long-term prospects so that a plan can be made around new legalities. As such, pharmaceutical manufacturers should invest time into understanding the markets they operate in, as well as the ones they may potentially pursue. This way they can design a strategy that will help facilitate market entry and progression with as little complexity and limitation possible.” 

For Cucchetti, a proactive approach to supply chain security is key as it can afford companies time to be able to adapt to all changes required when complying with regulations. “Companies should form a dedicated team with all business functions involved in the serialization project, documenting all regulatory and business requirements,” he says. “At all times, organizations should work alongside the implementation partner and possibly with the regulation bodies to understand the upcoming changes and work towards accommodating them.”

As a final note, Widengren explains that for companies to be able to reap the benefits of supply chain security requirements and for optimum preparedness and future safeguarding, companies should consider implementing aggregation capabilities. “Aggregation is not always a mandatory measure,” he summarizes, “but it is expected to become part of legislative requirements in the future.” 


1. WHO, “A Study on the Public Health and Socioeconomic Impact of Substandard and Falsified Medical Products,” Report, November 2017.
2. Strategy&, “Fighting Counterfeit Pharmaceuticals New Defenses for an Underestimated-and Growing-Menace,” Report, June 29, 2017.
3. M. Pisa and D. McCurdy, “Improving Global Health Supply Chains Through Traceability,” Center for Global Development Policy Paper 139, February 2019. 

Article Details

BioPharm International
Vol. 32, No. 6
June 2019
Pages: 42–44


When referring to this article, please cite it as F. Thomas, “On the Right Track,” BioPharm International 32 (6) 2019.