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In this article, Jean-Marie Aulnette, vice president of EMEA at TraceLink and Rick Seibert, senior vice president, global innovation and technology services, Sharp Services, discuss the survey findings as well as their implications for the industry. The article will also analyse the striking disparity between ‘feeling’ ready and truly ‘being’ ready for serialization regulations, discuss what has caused this and offer advice on how to avoid common pitfalls.

It’s all in the data

Aulnette – The data from our Global Drug Supply, Safety and Traceability Report paint a clear picture of the pharma sector’s readiness and thinking around serialization.

Despite the decision from the FDA to delay active enforcement by a year, there remains an uncomfortably large number of businesses that simply aren’t ready for serialization. More worrying, is the number of businesses that feel “very ready” yet have not taken some of the fundamental steps towards serialization. This was also prominently seen in the EU where businesses working towards the Falsified Medicines Directive (FMD) have an equally skewed perception of readiness.

Key results
DSCSA

  • One-third of pharma businesses feel ‘very ready’ for serialization however only one in four respondents are truly ready, by taking the fundamental steps towards serialization;
  • Not one of the respondents who feel “very ready” for serialization had taken all the fundamental steps towards serialization readiness;
  • Half of CMOs feel ‘very ready’ and have taken fundamental steps towards serialization; and
  • 82 per cent of pharma businesses said the FDA’s postponement decision would not affect project plans. 67 per cent of CMOs said the FDA’s postponement decision would not affect project plans.

EU FMD

  • 4 per cent of pharma businesses with EU FMD requirements have not begun preparations, 68 per cent feel ‘somewhat or very prepared’ for serialization
  • 94 per cent of CMOs serving clients with EU FMD requirements feel ‘very ready’, however 42 per cent haven’t began preparing
  • One-third of all the EU FMD pharma and CMO respondents feel ‘very ready’ however only 15 per cent feel “very ready” and have taken most of the fundamental steps
  • Only 4 per cent of the “very ready” EU FMD pharma companies and CMOs believe they will be sending serial numbers to the EU Hub by the February 2019 deadline.

The survey also compared the state of play in FMD preparations to the DCSCA preparations one year previous, giving a like-for-like comparison of readiness one year out from the respective deadlines.

There are similar trends to the results of last year’s survey which focussed on readiness for DSCSA. However, businesses operating in the EU do seem to have an advantage as they have witnessed, and seemingly learned from, some of the mistakes that resulted in the FDA having to extend its deadline for active enforcement.

  • EU FMD pharma companies feel less prepared for serialization than DSCSA respondents felt in 2016 – 46 per cent of the respondents did not feel prepared for the US DSCSA deadline. In comparison, that number had increased to 68 per cent for businesses preparing for EU FMD.
  • EU FMD pharma companies realized the need for more staff dedicated to serialization ahead of time – well before their DSCSA counterparts, with 30 per cent of EU respondents disclosing that they’ve already hired additional staff for serialization. In 2016, only 9 per cent of DSCSA pharma respondents said they were planning on hiring additional staff for serialization. However, in the latest survey, it was found that 23 per cent of the respondents had hired additional staff.

While the EU respondents may appear to be better prepared than their counterparts were 12 months previously in the US, there remains a problematic gap between how ready businesses are and how they perceive levels of readiness.

The problems with disparity
Aulnette – The disparity indicates a lack of understanding of the complexity and resource intensiveness associated with serialization in some quarters of the life sciences industry. One of the biggest misconceptions is that many pharma companies think that vendors have sufficient amounts of delivery capacity and that later implementation will lead to lower costs. However, the reality is a stark contrast, a serialization programme typically takes 6-9 months to implement, meaning businesses looking to make the February 2019 FMD deadline should have started their projects by the end of Q1 in 2018. More problematic is the timeframe for selecting, delivering and validating line systems. Some vendors are currently proposing 12 to16 month timescales to deliver line systems which will take implementation beyond the EU deadline.

If we look at the results of the survey, nearly half of the contract manufacturing organisations (CMOs) in Europe hadn’t started their projects yet. These late movers face a very different challenge to those businesses who began preparing earlier.

As the serialization implementation process is almost entirely new to the industry, there remains a lot of unknowns and uncertainty when it comes to understanding what is really needed to comply with different markets. Serialization requires fundamental changes to business including new manufacturing and enterprise IT systems, and respective systems and data integration, which is especially new for the small and mid-size pharma companies.

When planning for serialization, it is vital that companies understand how all their operations, processes and systems will be affected. This helps to specify any required third-party support, the total internal resource needed and the level of collaboration with partners that will be required for successful implementation. This can be an expensive process, and if businesses fail to realise the extent of this work, these costs could prove to be unmanageable.

Seibert – From the perspective of a contract packaging organisation (CPO), there is a very high level of initial investment required to adequately prepare packaging sites for serialization readiness. These investments include the required hardware and software to support the serialization architecture and include some other investments that may be subtler at first glance. Specifically, skilled engineers, project managers and validation resources need to be added to the various CPO functional groups to support the process on an ongoing basis.

Structural and graphic design resources also need to be enhanced to support the overall programs. When it comes to new drug launches and products that need to be serialized, the kits or package themselves will need to be redesigned either from scratch (if a new drug) or the design of the box (and the carton and potentially the bundled wrapper) and the artwork will need to accommodate the serialization data. This is key and adds a bit of complexity which isn’t always understood in advance.

The foundations of misconception
Aulnette – Many companies feel that they have more time than those aiming for DSCSA compliance thanks to the 2019 vs 2018 deadlines, but this isn’t the reality. EU FMD complexity is higher due to the multiple countries within the EU, the different national systems and multiple languages that need to be considered on packaging. In the US, there are a handful of major wholesalers/distributors and this isn’t the case in the EU where the situation is much more fragmented.

There’s also significant challenges when it comes to data exchange and network connectivity – sending data to the EU hub involves multi-party contracts with on-boarding partners and respective European Medicines Verification Organisations. Only 4% of the very ready EU FMD pharma and CMO respondents believed they would be connected and sending data to the EU hub in time for the deadline.

Seibert – Some brand owners as well as contractors have been taking a risk by anticipating regulatory delays that may allow them more time to deploy their serialization programs.

There is also an issue with some businesses’ approach to collaboration and communication across the various enterprises. Some companies have seen readiness as a competitive advantage, and as such are eager to share capabilities and experience. In other cases, less resourced or qualified providers may not be as well prepared and make the mistake of not sharing their situation and working collaboratively towards a solution. Most companies, brands and providers, tend to create their own specific program strategies that often are not aligned across the industry. The pathway to success, however, is paved with detailed, open and honest dialogue with clients and technology partners and the sharing of learning and experience to improve collective programs.

Aulnette – Smaller, less well-resourced or less experienced CMOs and CPOs are often not aware of all the requirements of serialization or are working with solution providers that work to an over-simplified deployment plan. The result is a false-confidence among businesses when it comes to readiness as they are yet to consider or encounter some of the fundamental steps.

Final thoughts
Aulnette – Developing a comprehensive roadmap, even in retrospect, with regular milestones should allow businesses to accurately assess their current state of readiness. It’s also vital that businesses are inquisitive when it comes to serialization and appreciate that there are unknowns and very subtle requirements – spending time to explore the challenge fully and engaging with partners and experienced vendors is essential.

Seibert – All brands should be undertaking detailed supply chain reviews and identifying areas of risk across their supply chain. It’s also important that a conscious effort is made to rally and consolidate their product lines towards providers that already have deployed and qualified systems.

The full GDSST report is available for download here.

The results of the report and their implications for the pharmaceutical industry will be discussed at FutureLink Munich, which will take place June 5-7, 2018. The event will see leaders from across the pharmaceutical and healthcare industries gather to discuss regulatory compliance and shaping the future of digital drug supply with information sharing networks.