Estimated Rise in Serialized Drugs in The U.S. Supply Chain, 2015 Serialization Estimate 2014.zoomIt’s August and that means it is time to check in on the progress toward full serialization of drugs in the U.S. supply chain.  This is an annual look I’ve been doing for five years now.  For my previous essays, see:

In each essay I produced a graph of my own personal estimate of the likely rise in the percentage of drugs that I thought would result, based on the deadlines that were in place at the time.  Of course, things changed last year because the Drug Supply Chain Security Act had preempted the California Pedigree law the previous November, so last year I made a new estimate that took into consideration the DSCSA dates.

My estimates have always been based on my best guesses, and those are based on what I have seen manufacturers do with the barcodes on their products in the past, plus my experience working with various drug manufacturers as a consultant.  I am skeptical that we will see the percentage of drugs being serialized rise to high values until just prior to the date the DSCSA mandates it.  That date is November 27, 2017 for manufacturers and November 27, 2018 for repackagers (see also “Progress Toward Serialization!?”).

One of the problems making guesses like this is that there is not much data out there about what is actually happening, or what companies are planning to do.  By now, all drug manufacturers and repackagers should have a solid project plan for meeting the 2017 deadline, but no one has collected data about when those companies plan to begin shipping their products with those serial numbers.

I have done an unscientific survey for the last two years, both times sponsored by Frequentz (see “DQSA: Did The Authors Get The Timeline Right?” and “2015 RxTrace U.S. Pharma Traceability Survey Results, Sponsored by Frequentz Now Available!”), in which I tried to find out when we will see a big rise in the percentage of drugs with serial numbers on them entering the supply chain.  What I found is that companies are making progress in adding serial number capabilities to their packaging lines, but many are choosing not to turn those systems on until sometime in mid- to late-2017—just prior to the deadline.  If true, that will result in a rise that is in line with my predictions over the years.

A few years ago the Center for Healthcare Supply Chain Research, an independent research “partner” of the Healthcare Distribution Management Association (HDMA), began including some questions about serialization in the supply chain in their annual survey of wholesale distributors.  This is close to what I have been looking for.  They have been asking U.S. wholesale distributors to report the percentage of SKU’s received inbound from manufacturers with 2D bar codes on them.  It is safe to assume that any drug in the U.S. that has a 2D barcode on it is serialized.

In 2012 their respondents reported that only 1.1% had them.  In 2013, the year with the most recent data, that percentage “leaped” to 2.6%.  That is a big jump over a single year, but the numbers are still very small and I’m not sure you can trust these companies to report such numbers accurately.  I assume these responses come from someone at the corporate office who is mostly just guessing at what is actually happening in the distribution centers.  I would be very surprised if anyone is actually measuring this number scientifically.  They should, but I doubt they are.  Correct me if I am wrong.

Click image to enlarge
Click image to enlarge

I am including the graph of my prediction again this year, with no modifications because the HDMA’s “actual” numbers are within my predicted range for 2012 and 2013.  That gives me at least some minimal confidence that my prediction from last year will reflect the eventual reality.  If my estimates are accurate, then right at this moment wholesale distributors should be receiving Rx drugs with serial numbers on more than 10% of their Rx SKUs.

Does anyone think this is what’s happening?  Are there any wholesale distributors out there who would like to anonymously tell us what you are seeing right now?  Feel free to respond through the “Contact Dirk” link, or just send me an email.

Going forward, I am going to move this annual look at the rise to sometime right after the HDMA publishes their annual survey results so my analysis of their data is fresher.  I think they publish in December or January.  Watch for that.