Pharmaceutical companies must constantly respond to changes in regulation, many of which address supply chain security and require changes to product packaging. Jim Banks looks at the implications of new legislation such as Europe’s Falsified Medicines Directive and the packaging innovations that are helping companies keep up with the demands of traceability and tamper-evident solutions.
Pharmaceutical companies accept regulatory change as a fact of life that affects every part of their business from clinical research to the cold chain. One important regulatory priority is to secure the supply chain to prevent the infiltration of fake medicines. Track and trace technologies, mass serialisation and tamper-evident packaging are among the biggest weapons in the war against counterfeiters, but incur costs for both packaging and pharma companies.
The industry is global in nature and must, therefore, deal with many legislative regimes. In the US, the Drug Quality and Security Act (DQSA) was signed into law in November and lays the foundation for an electronic system to identify and trace certain drugs throughout the distribution process. In 10 years this system will facilitate the exchange of information at the individual package level about its route through the supply chain.
In Europe, the Falsified Medicines Directive came into force in January. It targets pan-European, harmonised safety and control measures using 2D barcodes and tamper=proof technologies. Each pack must feature data including a manufacturer code, a serialisation number, a batch number and an expiry date. A repository system stores this data and validates the barcodes at each stage of the supply chain.
Brazil, China and India are among the other countries changing their regulatory framework, although India has been pushing back the deadline for adopting a new barcode system to track pharmaceutical exports. Around 80% of regulatory requirements are common around the world and focus on item-level serialisation, which affects pharmaceutical companies, contract manufacturing organisations (CMOs) and their packaging partners.
"Regulation is front and centre for pharmaceutical companies," says Tim Marsh of Marsh Consulting. I don’t think manufacturers would be implementing track and trace or serialisation technologies on a grand scale without pressure from regulators. Big pharma will be spending hundreds of millions of dollars to be compliant with the Falsified Medicines Directive and new regulatory regimes in countries like the US and China. They would not invest that amount of money without a return of value to the business, except this is about regulatory compliance."
Now an independent consultant, Marsh spent 10 years at Pfizer leading its supply chain security and serialisation strategy teams. Recently he focused on similar issues for Adept Packaging. He is heavily involved in GS1 Healthcare, which promotes the implementation of global standards and solutions to improve the efficiency and visibility of supply and demand chains globally.
"Pfizer is one of the leaders in this space and it is on track to be compliant, but then there is a long line to the companies at the other end of the compliance spectrum, which are only just coming to understand the requirements and the necessary investment" adds Marsh. "Some CMOs have not yet begun to understand what serialisation means, but that is starting to change because they realise that new requirements cannot be avoided. Regulation is non-negotiable."
Pharma companies and their packaging partners face pressure on two fronts – time and money. They cannot implement serialisation solutions overnight or without cost. Those leading the way on compliance came to this realisation early.
"Eli Lilly is perhaps the most mature with serialisation implementation because it consciously decided to implement in a standard way across all of its operations," says Marsh. "It recognised the business need involved with regulatory compliance and its leadership endorsed it. Personally, I think the time value of money weighed heavily on their decisions, understanding that regulations would not go away. Other companies will struggle with the volume of what is required. For big companies using many CMOs there are lots of moving parts, so compliance is a complex process."
Counting the cost
Compliance always comes at a price and in the case of the Falsified Medicines Directive there are those who believe that the cost implications for packaging will endanger the supply chain. Among them is Maarten Van Baelen, medical affairs manager at the European Generics Association (EGA), who estimates that changes to printing and serialisation could cost up to $397,000 per packaging line, anti-tampering changes up to $265,000.
These costs include the installation of systems to generate and print barcodes, as well as to scan, store and track the data. Packaging designs may need to change to accommodate the barcodes.
"The implementation of safety features for the EU markets will have a huge impact on the industry’s packaging lines, packaging sites and the supply chain," comments Van Baelen. "Our experts have calculated that the implementation costs are around €500K per packaging line. According to the European Commission’s impact assessment there are 12.000 packaging lines operating to supply the European markets. This means an implementation cost of €5 billon. Commercial providers of printers, scanners and serialisation software have expressed concerns that they will not have the resources to upgrade all these lines by 2018."
The EGA advocates a phased-in approach to build up the system on a smaller scale, initially without the tamper verification feature in the packaging.
"By starting small and solving any arising complications on a small scale, continuity of supply of affordable medicines will be less at risk, much of the cost can be spread over time and the credibility of the control system can be maintained. The use of anti-tampering features on the outer package will not prevent falsified medicines from entering the legal supply chain as it can easily be copied or imitated," adds Van Baelen.
There is no universal consensus around the EGA’s view, and Marsh is among those who feel its case is overstated.
"The EGA has been saying for years that rising costs will harm competitiveness because companies selling generics for lower prices have smaller margins. It also says that the generics market is not a target for counterfeiters, but we know that is basically false. Counterfeiters will act if they have a means and a market. The generics market is enormous and they can make the products cheaper because they have no regulations to comply with and no GMP standards to meet. In order for the False Medicines Directive to be effective it has to be comprehensive, covering branded and generic medicines. If it were simply to apply to branded medicines based on higher prices it would simply drive counterfeiters to the lower cost generics even more," notes Marsh.
Impetus for innovators
One issue Van Baelen has with anti-tampering features is that pharmacists and other healthcare professionals often make the anti-tamper feature obsolete by opening the package to read or show the information leaflet to the patient. An innovation from the Polyhedra Group, however, could overcome this problem.
"It is becoming general consensus in the pharmaceutical industry that the days of just selling the pill are over. Pharma companies need to offer services that address stakeholder needs along the patient pathway, leading to better health outcomes. In most cases the pharmaceutical package is undifferentiated. It contains the product with the required statutory information, but there are significant opportunities to differentiate the functionality of the package by using innovative labelling," says Steve Hobbs, Polyhedra’s chief business development officer.
"Unique codes can be applied to each package, which when read using a smart phone or tablet can turn the pack of tablets into a powerful means of one-to-one communication. To enable interaction in this way costs just a few pence per pack and can provide significant benefits for everyone involved. In a very user-friendly way, the patient can access a website where they can get immediate access to unbiased, code-compliant information and apps that can help them adhere to their treatment and better manage their condition," he adds.
For now, however, the biggest issue in pharmaceutical packaging is serialisation.
"Everyone knows serialisation will strengthen the legitimate supply chain, but there is still a huge black market out there, which this technology will not stop," says Marsh. "What is true is that the relationships between pharma companies and the packaging partners are in a transition phase. Eli Lilly and Pfizer on the packaging side, and ABC, McKesson and Cardinal Pack on the wholesaler side are among those that are ahead of the game. They have shown not only that companies can work together, but also that a huge amount of learning is needed."
The next step in serialisation is to learn to cope with exceptions. Even with the most efficient operations errors occur, and when these mistakes affect a small proportion of a batch of pharmaceuticals that otherwise comply with serialisation requirements, there is no set process to determine the response wholesalers should take.
"Even if you assume six sigma (3.4 defects per 1 million) for allowable errors in the data, the supply chain process for a given transaction with an error can bring the flow of the associated product to a screeching halt. Compound that error rate across the hundreds of suppliers and tens of millions of units and what results could be very disruptive to the flow of safe medicines. The only way to resolve this is to have a collaborative dialogue between trading partners and with regulators. Everyone wants safety without stopping the flow of these important products," Marsh adds.
Regulation is necessarily a moving target and the pharma industry has no choice but to keep up. To do so, it must adopt a collaborative approach with packaging companies working to innovate and to adopt the technologies that will keep the industry compliant.