The pharmaceutical industry is facing one of the biggest threats in recent years as more and more counterfeit medications find their way into the market. In fact, a recent U.S. Customs and Border Protection study reported that seizures of counterfeit pharmaceuticals tripled in 2011 compared to the year before.

Whether due to product contamination or a failure to include the right active ingredient, counterfeit drugs are posing a serious threat to consumer safety. But counterfeit medications are only a symptom of a much larger issue – the growing complexity and vulnerability of the global pharmaceutical supply chain.

At every stage of this increasingly lengthy and complex path lies the opportunity for unscrupulous suppliers to counterfeit, contaminate, adulterate and mislabel medications that millions of people now depend on.

From raw source materials to medications available on store shelves, the pharmaceutical industry remains responsible for complying with federal regulations and ensuring the safety and quality of its products. Breakdowns along the supply chain can lead to dangerous and potentially deadly outcomes for consumers and devastating blows to corporate brands.

Over the past decade, we have seen how disruptions in the pharmaceutical supply chain can lead to highly publicized product recalls and other adverse events from deadly drug products, to harmful mislabeling to counterfeits. This inability to retrieve all affected product from the market in a timely manner underscores the importance of maintaining a reliable and trustworthy track-and-trace system.

Preserving Supply Chain Integrity

The pharmaceutical industry is in the business of patient care and safety. Drug companies must be able to effectively handle any harmful issues and mitigate risks that arise within their complex global supply chain. For instance, outsourcing drug development to pharmaceutical companies and contract manufacturers in developing nations can result in operational risks that make it tough for companies to ensure that all companies are meeting their safety and quality responsibilities.

When a potential safety issue is identified in a global product flow, track-and-trace initiatives can help pharmaceutical companies efficiently and effectively respond to the problem by overcoming obstacles that might arise. By employing a system that can quickly detect the current physical location of any drug within the supply chain and provide a record of every control point in its global journey, drug makers can maintain control of their product supply and distribution channels. They can also confirm whether ingredients used in the manufacture of medications are authentic, safe and dispersed in a secure fashion.

It takes just one breakdown in the chain to result in placement of adulterated or contaminated products on store shelves. And, unfortunately, a company’s reputation can be destroyed in a matter of days if product recalls are not handled properly. Therefore, maintaining a supply chain that is sound and free of corrupting influences is essential to the pharmaceutical industry in the 21st Century.

Supply Chain Visibility & Product Recalls

While consistent, unfailing product safety is always the pharmaceutical industry’s goal, product recalls are inevitable. From lost revenue to potentially irreversible brand-damage, recall events can have an immediate impact on a company’s operations. To minimize costs and other unwanted consequences, every action a business takes during a recall event must be swift and precise.

A large component of effective recall management revolves around a company’s ability to accurately identify, locate and withdraw all affected products.  The ability to pinpoint affected units down to a batch or item level can save a great deal of time and limit the need of announcing a general, mass recall. This is where track-and-trace technology plays an invaluable role to a company.

By recalling only specific quantities and shipments affected by quality or compliance issues, businesses can limit their liability exposure and prevent lawsuits being filed by consumers who are not actually affected by a recall. Such a system also allows for a firm to isolate the customers who received potentially dangerous products, locate the contact information necessary to communicate with the affected parties, and collect the affected product in a timely fashion.

The Future of Track-and-Trace

Pharmaceutical manufacturers that already have track-and-trace strategies in place have done so voluntarily. However, such systems are likely to become mandatory soon. Legislators in both the United States and the European Union have previously advocated for the use of such systems in the past to authenticate, monitor and manage the global flow of drugs. In fact, the Obama administration last year recommended the implementation of a track-and-trace system as part of a package of proposals designed to fight counterfeit medications and protect consumers.

While many in the industry supported parts of the Administration’s proposal, they also opposed other sections. Industry representatives backed the government’s focus on collaboration and information sharing in the name of consumer safety. But they objected to mandatory systems, arguing that they are still under development, may not be effective in their current state and would be extremely costly to “try out” while awaiting a more permanent solution. 

Today there is no broad consensus within the pharmaceutical industry when it comes to track-and-trace systems. However, if there is anything recent regulatory events can tell us, it is that companies are better running to the light than resisting change.

Pharmaceutical companies need not wait for the government to issue mandates. Instead, they should act on their own and beat regulators to the punch. By leading on the issue of aggressively thwarting counterfeiters and unscrupulous suppliers, pharmaceutical companies can protect consumers and the industry’s reputation at the same time.  

About the author: Mike Rozembajgier is Vice President of Recalls for Stericycle ExpertRECALL™. Mike is responsible for all aspects of recall service offerings, including development of strategic recall business initiatives, product enhancements, pricing and contracts, and marketing. Rozembajgier has more than 10 years of experience in the healthcare industry. Prior to joining ExpertRECALL he held various management positions at Guidant Corp. (now Boston Scientific) and at Deloitte in the Strategic Consulting practice.