Lessons Learned: Tracelink on track & trace regulations

Shabbir Dahod, president and CEO of TraceLink, highlights insights to take from DSCSA to help with EU FMD.

Satisfying the requirements of track and trace regulations in the world’s two largest pharmaceutical markets isn’t easy. With the US serialisation mandate fast approaching, and the EU deadline coming in February 2019, businesses across the supply chain are working to determine how best to navigate through uncharted territory.

The good news is that earlier serialisation deadlines for the US Drug Supply Chain Security Act (DSCSA) offer lessons and insights that can be mined to help global and EU manufacturers prepare for serialisation under the EU Falsified Medicines Directive (FMD).

Insights from DSCSA

While many companies thought that DSCSA lot-level traceability would be easy to implement, it was far more challenging than anticipated. In fact, our findings from the TraceLink 2016 Global Drug Supply, Safety and Traceability Report confirmed that the complexity of the requirements prevented some companies from achieving lot-level compliance altogether.

The reality is that lot-level compliance in the US required a more significant investment in IT infrastructure and staff resources than expected, and the level of connectivity for customers and suppliers to exchange data was much more complicated than estimated.

The lack of a single standard around data formats and exchange also opened the door for trade partners to make unique demands on each other. With trading networks of dozens to hundreds or thousands of partners, some companies found that accommodating so many unique requests greatly magnified the burden of compliance and challenged business relationships.

So, how can we apply this knowledge to EU FMD preparation? Despite the variations in US and EU regulations, companies can expect similar complexities with serialisation, whether they are selling product outside or inside the EU.

One such complication is the challenge of managing and exchanging massive amounts of data that comes with serialising product down to the unit level. Another is the burden of adapting to the particular business preferences of partners across the supply chain. Let’s take a closer look at these specific challenges.

Data exchange and processing: Ever more complex

Companies that have already invested heavily in serialisation have been surprised by the level of commitment required. In addition to higher capital costs is the complexity of data integration, and beyond that, the networking and data exchange aspects of serialisation. Both the US and EU serialisation regulations require some sharing of data across the supply chain, an entirely new concept for the life sciences industry. Under DSCSA, the data that is exchanged moves from the seller to the buyer whenever a change of ownership occurs.

While no data will be exchanged directly between all supply chain trading partners under EU FMD, manufacturers that use CMOs will need to exchange serial number data with one another because manufacturers must report to the European hub, which in turn passes the information to national repositories so that verification can take place at the point of dispensation.

Along with introducing data sharing where none existed before, serialisation compliance is going to ramp up data and transaction volumes steeply and quickly. The computer power needed to process the exponential increase in data transactions is often misunderstood, and if not addressed early on can result in stopped shipments — a devastating outcome for any drug manufacturer.

To give an idea of the magnitude: In the US, before serialisation, processing a single batch of 10,000 units required a mere 2 KB of DBMS storage and just four transactions [batch created, then the pallet picked and shipped, and an advanced shipping notice (ASN) sent]. With serialisation, processing that same batch could take 11 MB of DBMS storage and at least 60,000 transactions because of the processing done at the unit level.

New tasks that didn’t exist before, such as provisioning, commissioning, and potentially aggregating serial numbers — plus the regular pick, pack and ship tasks — introduce tens of thousands of new transactions. The increase in storage requirements from 2 KB to 11 MB for this single shipment is unprecedented.

In Europe, where medicines are generally packaged and sold at the ‘unit of use’ level (as opposed to in the US, where the saleable unit is distributed in larger bulk quantities), the volume of product and the magnitude of transactions for serialisation will be five to seven times what companies will handle in the US. Any operations that rely on traditional application architectures for enterprise-class problems involving far fewer transactions will not be able to scale to meet the new demands. 

It can’t be emphasised enough, that underestimating data exchange and processing requirements will present significant business risk to any prescription drug marketing authorisation holder (MAH) that serves the EU market.

Trade partner demands: Unpredictable expectations

As compliance requires a new level of collaboration across supply chain business relationships, it naturally introduces the opportunity for trading partners to place additional information demands on one another. Findings from the 2016 Global Drug Supply, Safety and Traceability Report show that companies gearing up to meet the first DSCSA regulation deadlines were not prepared for these unforeseen trade partner demands. Of the pharmaceutical companies surveyed*, more than 50% had to modify their systems to meet customers’ data requirements and 44% of them asked at least one customer to make modifications to their systems to accommodate unique data requests.

Though these early learnings are based on DSCSA lot-level compliance, it’s clear that custom demands from trade partners greatly magnify the burden of compliance. Failing to recognise this potential outcome will introduce even more risk, as companies prepare for meeting EU FMD requirements.

Final thoughts: How to prepare

Companies that are complying with DSCSA lot-level regulations, and who have started the journey toward serialisation, understand that the complex implementation process will have a ripple effect throughout their operations. Serialisation will introduce enormous data and transaction volumes, a magnitude unlike we’ve ever seen before, driving the need for a smart strategy and long lead time.

A key piece of advice — start preparing now. Planning and executing a successful strategy will take longer than you think, and you will need the time to have crucial conversations with trade partners about how serialisation and regulatory data will be managed; what their specific serialisation needs are; when upgrades should begin; and how financial responsibilities will be divided. All of these critical decisions can take months to resolve, so open and clear lines of communication between you and your trade partners will be paramount to achieving success.

The decisions you make today will impact your operational performance. Pharmaceutical and contract manufacturers that demonstrate seamless integration with each other will move forward without incident — while those who are unprepared may lose valuable business.

By the year 2020, more than 50 countries around the world will have set standards and deadlines for item-level pharmaceutical serialisation and traceability. Every day, we’re learning more and more about the challenges the industry faces implementing such critical standards in a very short time frame. Now is the time to use the learnings from early adopters to successfully move into a serialised and electronic world. One thing is for certain — everyone’s serialisation readiness is critical to the industry’s success in ensuring that medicines flow safely through the supply chain to patients without interruption.

*A survey of 331 industry professionals, which took place in the 1st quarter of 2016, examined the experiences of companies across the supply chain that had a DSCSA lot-level requirement.