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The State Of Track & Trace Technology: Is The Industry Ready?

Tue, 07/15/2014 - 1:03pm
Kelly Ng, Product Manager, Healthcare, Epson America

As serialization becomes an ever more important part of the pharmaceutical industry and the FDA's track & trace deadlines loom in the distance, we sat down with Kelly Ng, the Healthcare division's Product Manage at Epson, to talk about the state of track and trace/serialization technology, whether the industry is ready for the new requirements and how companies can make sure that they will make the upcoming deadlines. 

The government seems to keep pushing back the deadlines for implementing track and trace/serialization technologies, why is this? 

Many of these delays can be attributed to the recently signed Drug Quality and Security Act (DQSA) preempting California’s e-pedigree law in favor of setting forth overarching federal track and trace regulations. Covered in scope under the DQSA’s Drug Supply Chain Security Act, these regulations revolve around the content of pharmaceutical product labels and capturing of pedigree information. The prevailing driver is to improve supply chain security and product integrity to curtail counterfeiting and improve patient safety. It is likely that delays were incurred on the regulation side of things as lawmakers sidestepped the state-by-state “patchwork” approach in favor of a national system.

While implementation deadlines have been set, the FDA is in the midst of establishing standards for the industry to follow regarding the exchange of transaction data. The FDA has been seeking feedback on current processes used by the industry with the hopes of finalizing guidelines by November 2014. From a technical standpoint, DQSA implementation falls on evaluation. Pharmaceutical manufacturers, wholesalers or repackagers (the parties directly impacted by the first implementation deadline) should assess whether their current coding, labeling or packaging technologies can potentially meet serialization requirements under DQSA.

What are the current deadlines?

The new regulations on label content are to be in place by the end of 2014. The first implementation deadline under DQSA goes into effect January 1, 2015. By this time, manufacturers must be able to provide transaction information reflecting lot-level pedigree information, transaction history (available electronically or on paper) and a transaction statement. This includes the ability to provide information for subsequent transactions every time ownership of product is transferred. The final deadline for DQSA does not occur until 2023, but by November 2017, all of this information must be available electronically. Additionally, product identifiers must be attached or imprinted on labels at the product and case level. 

How far along is the pharmaceutical industry in meeting these requirements?

Most existing technologies can adapt to meet these requirements, digital and flexo printing have evolved to be quite flexible, though some solutions are faster than others. Depending on where a company falls in the supply chain, there are staggered implementation benchmarks. For example, while pharmaceutical manufacturers are required to place unique product identifiers on drug packages by November 2017, repackagers have until November 2018 to fulfill this requirement. Given the diverse allocation of prescription drugs throughout the supply chain, this will require a flexible approach to packaging, labeling and shipping product.

The more significant time sink here will be the effort that goes into revamping software management systems and redesigning label formats. With serialization, it becomes more difficult since each label will need to carry a unique product identifier. With the obligation to incorporate additional transaction information as products travel to different trading partners, label variability and complexity will also play a larger role. Between batch information, location and package contents, the information on labels will change constantly and frequently. High volume producers and distributors will largely feel this requirement. Smaller companies that regularly deal in low volume, high mix product applications may be familiar with the flexibility required here, but may face challenges in the sheer volume of changes required under serialization implementation.

What questions should a pharmaceutical company ask before implementing a track and trace/serialization system?

Companies should establish how they are defined within the FDA’s breakdown of implementation, to develop an accurate timeline for serialization planning, testing and execution. However, given the requirements for all supply chain parties to reflect exchange of product on required transactional documents, providers should hold into account all aspects of serialization. For example, while wholesale distributors may have divergent deadlines, it may be beneficial to align implementation with their primary upstream partners. 

Focusing more specifically on the labeling aspect, valuable qualifiers include: How is my business organized? Do I operate long, continuous packaging runs? Can I consume a conventional printed quantity in a finite period of time? For example, 15,000 to 20,000 labels is the range typically associated with economic conventional label printing. With sufficient volume stemming from multiple sources of business, many converters will consider a smaller scale of 10,000 pieces or less, but this is not considered ideal and may incur a premium. Depending on where a company falls in the pharmaceutical supply chain, cost containment in packaging and labeling operations may fall on this issue.

For purchasers ordering smaller quantities more frequently, there are separate issues to consider, namely scalability. Can I predict how much inventory to produce at one time to be shipped within a define period of time? This high-mix, low volume application of product can complicate inventory management and shipping. Companies in this segment have multiple stock keeping units (SKUs) in their catalog and in the process of product fulfillment or distribution, may mix and match hundreds to thousands of distinct items on a weekly basis.

As with finished goods inventory, every label in the store room is cash on the shelf and if used predictably, results in productive cash management. Conversely, the challenge arises when companies must house that “cash” for an indefinite period of time. We have encountered companies housing anywhere from 25 to 50 percent worth of obsolete label stock in their inventory. To this point, companies should be asking, “what proportion of my stock is outdated, obsolete or requires color? How much cash does this represent?” Ultimately, this falls as a costly expense to any business. 

Print quality and durability are also key factors that contribute to label performance, and if undervalued can result in inaccurate product tracking data. Pharmaceutical companies should consider whether labels can retain readability and integrity with water spray, immersion, harsh chemicals, abrasion, etc. Durability is essential when considering the impact degradation can have on barcode information. For example, smudged ink can lead to “bad” barcode readings on labels which contribute to shipping rejections, a particularly critical factor for federal regulations depending on the accurate exchange of transactional information and product tracking.

What can providers of these technologies do for pharmaceutical companies to make implementation and compliance easier, quicker and less costly?

Providers must be ready with tools to help manage the impending complexity and variability these requirements will create for their supply chain operations. Serialization will add label complexity to everyone’s operations, including managing various barcodes, lot/identification numbers, dosage instructions and color elements. As technological providers, it is also important to consider how interconnected everything is. Whether IT infrastructure or on-demand labeling, technologies must be flexible enough to interact with the various obligations manufacturers and distributors face throughout the supply chain. Between market pressures for more branding and shifting regulations this operational flexibility will be paramount. 

With looming deadlines in mind, what will be the future of track and trace/serialization technologies?

In many ways, this will depend on how the FDA builds out its guiding standards for implementation. Technological providers will continue to consider flexibility, variability and the interaction between capturing data and efficiently producing it as human actionable information on a product. Few companies have the luxury of selecting solutions for just one process. Many high volume producers also operate in the high-mix, volume SKU segment. Down the line, we definitely see the presence of color playing a larger role in pharmaceutical packaging and labeling operations. Color elements can enhance label readability and supply chain picking accuracy. Many customers are also looking to incorporate private branding elements onto their labels as they facilitate prescription packages to users further downstream.

Can you tell us about an implementation of your technologies in a pharmaceutical environment?

Taking a step back to look at our evolution in this space, Epson’s printing solutions have been in use with compounding pharmacists for years, specifically with prescription and product labeling applications. Pharmacists rely on our color labeling technologies when dispensing pharmaceuticals in bottles, IV or syringe form, labeling them to reflect specific patient requirements or for inventory in small batches. As our printers have become faster and more robust, we are beginning to supply the repackaging community. A smaller repackager (<10 million bottles per year) relies on our label printer for shorter product runs (50 to 5,000 pieces). This provides them with the flexibility  to produce complete serialized labels in short time frames (e.g., the morning of or day before) then run their product applicator immediately after. We have been serving manufacturing companies in this fashion for several years.

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