The year 2012 has come to signify “the end of the world” in pop culture, a sentiment fueled by doomsday theorists. Despite scientific fact to the contrary, a feeling of uncertainty and unpreparedness lingers in the minds of the general population. If I were a betting man, I’d gladly take the odds of surviving on through the next calendar year. What keeps me awake at night is the far more likely – and significantly under appreciated – deadline that is approaching the pharmaceutical industry.

The year 2015 is widely considered the beginning of the end for sales of non-serialized drug products. The entire pharmaceutical supply chain will soon undergo a monumental transformation. Yet, despite this pending reality, many decision makers who discuss “2015” continue to do so hypothetically.

California is the largest U.S. state economy and represents roughly nine percent of the prescription drug market. On January 1, 2015, the California e-Pedigree mandate is scheduled to take effect, requiring manufacturers to serialize, at the unit level, 50 percent of the products they send to the state. The remaining 50 percent must be serialized a year thereafter. And according to Virginia Herold, Executive Officer for the California State Board of Pharmacy, “The serialization requirement is not easy; [it] takes time to perfect. There will be no further extensions of time.”

In 2010, the U.S. Food and Drug Administration issued its final industry guidance for serializing the drug supply chain. Soon, the U.S. may follow other industrialized countries by introducing regulations at the federal level. Despite this, many pharmaceutical companies are not adequately addressing the time, resource and strategy challenges that serialization will present.

The most underestimated obstacle is time. As this issue of Pharmaceutical Processing goes to print, there are fewer than 1,000 days until 2015. The time to move on serialization is now, because serialization is a multi-step process that takes years to incorporate and implement successfully.

Consider the following scenario of a company upgrading its line with serialization equipment. Let’s assume the company’s management fully embraces serialization, knows exactly what it wants, has authorized a budget, and has allocated the required personnel.

Quoting (3-6 months)

If the company has targeted its serialization vendors, personnel will need time to request quotes and refine the technical specifications (RFQ & URS). This process will take longer than usual for serialized lines because of the need to collaborate with additional third parties (capital equipment and vision system vendors, data management specialists, system integrators, etc). Expect 3-6 months to pass before the purchase order gets submitted, assuming this back-and-forth process goes smoothly.

Manufacturing (4-8 months)

Assuming the company submitted its purchase order before the serialization rush, we can allocate 4-8 months for vendors to, first, source the appropriate parts, and then proceed to manufacture, assemble, and factory test the equipment. This time frame, of course, may vary with the complexity of the serialization solution and the selected vendors involved. Further, the longer a company delays its serialization decision, the more likely equipment vendors and data specialists will be too busy to accept new business.


Timeline to meet California's January 1, 2015 e-Pedigree mandate

To better understand this challenge, imagine the manpower (sales, purchasing, engineering, production, etc.) and the time required to upgrade, install or replace a single packaging line. Now think about how many lines there are in the United States (hundreds) and globally (thousands). Now consider that 73% of pharmaceutical companies do not currently serialize any of their products, a figure quoted in a 2011 article. Clearly, the demand for resources will outpace availability, as the vast majority of companies scramble to upgrade or replace packaging lines by 2015.

Integration (1 month)

Now we will assume the company experienced no delays or issues with shipping and has the serialization equipment on site. Add another month for equipment installation and integration into the packaging line.

Validation (3-6 months)

After the equipment has been successfully integrated, the company will need to validate the installation, operation and overall performance of the line. Under normal circumstances, this documentation-intensive process can take several months as personnel meticulously test, correct, and retest the various safety features, controls, alarms, functions, and machine speeds.

Serialization will introduce a new layer of complexity to this process. How will personnel validate the serialized data capture and data management? How will they develop test protocols when there are no established standards from which to work? Expect at least 3-6 months for validation documentation to get through the first few serialized lines.

Warehousing (1-3 months)

Depending on the operation, the company may ship its product to wholesalers or distribution centers. Factor in a few more months before the product arrives in California.

No More Time to Assume

The previous scenario ignores the fact that most companies have multiple and diverse packaging lines which will require more time or manpower to scale up, respectively. Also, our scenario took liberty with its assumptions, and posits that 12-24 months are needed to serialize a line. By those estimates, January 1, 2013 would be the latest a company could begin their serialization upgrade and still meet the California deadline. For companies that have not yet started, little time remains to conduct a serialization needs assessment, research solutions, secure strategic partnerships and, most importantly, establish a robust pilot line.

Pilot Lines: One Solution Doesn’t Fit All

Wouldn’t it be great if all pharmaceutical products were processed in the same way, on similar packaging lines using the same equipment, and governed by one set of regulations? Unfortunately, companies must manage variations across their lines, such as packaging formats (bottle, carton, blister pack, vial), container shapes (round, square, oblong, asymmetrical), line operations (automatic, semi-automatic, manual), equipment (in age, make, model), and different regulatory environments, depending on where in the world each facility is located.

GS1, a global organization that designs and implements supply chain standards, tested a specific line configuration and issued a Pilot Report on Lessons Learned About Serialization and Pedigree. The report cited many technical difficulties encountered with printing, inspection, rejection, and maintaining line speeds, among others.

Companies need to design a robust pilot line that reflects real-world conditions. If the technical challenges are not discovered and addressed in a pilot line, companies will risk slowing or halting production to address them later. Also, companies should avoid bringing out mothballed equipment or issuing shoestring budgets for their pilot lines if they seek to learn anything meaningful about actual serialized lines. Companies that strategically invest resources in their pilot lines are more likely to find solutions that scale and meet the requirements of various line configurations.

Develop a Serialization Partnership

Pharmaceutical serialization and the e-Pedigree mandate did not happen overnight; serialization vendors have been refining their solutions for years. That said, the real challenge for pharmaceutical companies is choosing the right vendor, who can properly address the technical issues associated with container handling, data capture and data management. The right serialization partner also can advise on – and team up with – secondary and tertiary vendors to meet each pharmaceutical manufacturer’s specific needs.

At Omega, we consider serialization to be far more than a “compliance only” issue. To us, serialization has as much to do with increasing visibility along the supply chain as it does with increasing visibility along the packaging line. Data visibility before, during, and after product labeling can lead to significant cost savings, whether through improved line efficiencies or by producing safer drug products with fewer – and far more targeted – recalls.

True supply chain control is lifting a shrink wrapped bundle or standing by a case filled with loose containers, and knowing that there is a detailed history for every unit inside. And the time is coming when you’ll need to be in control.