Serialisation: Time is running out

In 2014, a record number of falsified drugs flooded the legal supply chain. Expensive biologics, including Herceptin, Remicade, and Gardasil, were stolen in Italy, repackaged and reimported in 390 cases throughout Europe. However, that same year, the police confiscated nine million falsified medicines in over 100 countries and shut down more than 10,000 illegal online pharmacies. Only rarely, as in the case of the German Pillendienst, the criminals responsible are sentenced to imprisonment, as law firm Dentons and Boehringer Ingelheim reported at the end of January. Counterfeit drugs cost Europe more than €10bn a year, a new report by the European Observatory on Infringements of Intellectual Property Rights estimated last October. However, nobody knows the precise figures, and the WHO stopped publishing estimates on the economic impact in 2012.

According to a global surveillance and monitoring system implemented by the WHO in 2013 to assess the economic impact of counterfeit drugs, over 920 falsified medical products have been reported by member states thus far. “While counterfeit drugs are leaking into the legal supply chain, it’s highly important to secure it from criminal action,” says Dr Rein­hard Hoferichter, spokesman for the board of securPharm. Germany’s National Medicines Verification Organisation (NMVO) is the very first early adopter of the EU’s Falsified Medicines Directive 2011/83/EG and its delegated regulation. The regulation, which must be implemented in the EU member states plus Norway, Iceland, and Liechtenstein by February 2019, decribes exactly what drug manufacturers and prescription med sellers must do to block stolen and repackaged drugs from leaking into pharmacies: print a unique identifier onto every prescription medicine, and seal drug packs with an anti-tampering device. 

The NMVOs are responsible for building the appropriate IT-infrastructure. Linked to a central EU data hub, it tracks and verifies the unique identifier along the entire value chain. "It’s a highly complex task. That’s why we already started work in 2011, five years before the EU’s delegated regulation defined the requirements for practical implementation,” Hoferichter says. “Today, this decision has proved to be correct.”

Currently, the EU sees two different speeds of implementation. Early adopters such as Germany and Sweden needed about two years to build their NMVOs with the players of the value chain and establish the technical system required for authentication of a drug. All other countries waited for the publication of the delegated act in February 2016.

Industry lagging behind

According to the European Medicines Verifi­cation Organisation (EMVO), two-thirds of EU countries are lagging behind in implementation. The EMVO manages the EU data hub that will pool all data uploaded by NMVOs through their national blueprints to verify pharmacists and hospitals. By February, only 14 NMVOs had been incorporated and two IT providers for implementation had been selected, with Germany and Sweden taking the lead (see map). Four countries had not started technical preparations.

In the industry, implementation of serialisation is also lagging behind, particularly among smaller companies that do not belong to pharma industry associations. According to a recent study of TraceLink among 200 drug makers, nearly 80% of respondents were concerned about hitting the deadline. As serialisation efforts are currently implemented on a worldwide scale, drug makers, CMOs, and Contract Packaging Organisations must adapt all packaging lines to be able to print machine-readable unique identifiers on the pack and seal it. "Printing and tracking the identifier is a big challenge," says Hoferichter. "Costs for technical adaption of a single packaging line are estimated to be in the range of €100,000-200,000, or 3-5 cents per pack. If you take the German market alone, with its more than 700 million packs of prescribed medicines annually, implementation cost will be about €21m-€35m per year." Other estimates are up to four times higher.

Intensive training required

SecurPharm’s system is currently the only one throughout Europe that can already feed its database with 2D matrix codes provided by drug makers. They include a randomised Unique Serial Number, the manufacturer product code, the batch number, and the expiry date. Each time a drug is dispensed, data is sent to another database used by pharmacists to authenticate the drug as legal. "Providing one database for drug makers and another for the pharmacists and wholesalers improves data protection," explains Hoferichter. However, it takes almost a year to make the process run perfectly, because without proper training mistakes can occur from the manufacturer’s side. That’s why the EMVO is pushing NMVOs to start the training phase early in 2018, at the very latest, to prevent gaps in the system.

The switch to the new serialisation and traceability requirements could become expensive, particularly for midsized companies. They not only must retrofit packaging lines and adapt manufacturing and IT systems to the new requirements, but also train operators, which comes on top of the annual EMVO/NMVO service costs based on the number of countries in which a drug is authorised. For small enterprises, this can be a substantial expenditure affecting product margins. For biopharmaceutical companies that have outsourced manufacturing and packaging, the challenge is to align their IT systems with those of their partners in order to appropriately transmit batch numbers etc. covered by the unique identifier. As securPharm’s system is in the advanced stage, 25% of German manufactures of Rx medicines have already joined it for practical testing. However, for most companies, it’s time to act now.