One of the focuses of RxTrace is to explore global pharma serialization and tracing regulations in an attempt to discover some of their implications. Some implications turn out to be obvious, but some turn out to be surprising. Identifying the implications early provides us with a better understanding of what to expect from our investments in time to fine-tune those investments. If company leaders have a realistic understanding of what to expect from different investments, they will make better decisions for their stakeholders. Can they expect to be fully compliant? Only partly compliant, thus needing to spend more down the road? Will they be fully compliant with the law, but disappoint their primary customers and thus find that their business takes a hit? If they have a good idea of what to expect before they make decisions, they will make better choices. Better choices that end up maximizing profitability overall. That’s the goal of RxTrace.
I think there are some surprising answers to the question in the title of this essay. Serialization mandates in various markets around the world are often sold as anti-counterfeiting regulations. Some are, but some are not. You can tell which will have an anti-counterfeiting effect by looking at how often the serial number printed on drug packages will be verified prior to a patient receiving them. In Turkey, that will happen multiple times within the supply chain for most drug packages. In most cases, once at a wholesale distributor and once at the pharmacy. It’s kind of hard to get a counterfeit through the legitimate supply chain with so much scrutiny going on. In Turkey, that’s the point of the regulation. As far as we know, it’s working well there (although I’d like to see some hard numbers regarding counterfeits before and after the regulation).
In the European Union, the serial number on each drug package will be verified once, in most cases, at the “point of dispense” (PoD). That won’t happen until February 9, 2019, but it should have a solid anti-counterfeiting effect. That is, assuming they are successful in getting everyone in the supply chain to always decommission drugs that exit the supply chain early (see “Decommissioning Under the FMD/EUDR”). If they fail to get that to happen, there will be plenty of holes that will be exploited by well-organized criminals. We probably won’t know for sure until well into the 2020s.
But what about the United States? I am always surprised at how many people think that the Drug Supply Chain Security Act (DSCSA) will force members of the supply chain to verify every drug serial number throughout the supply chain (see Myth #3 in “5 Myths About The DSCSA In 2023“). Technically, that would have been true in the operation of the supply chain that was intended by the California Pedigree Law (see “The California Pedigree Law”), but that law no longer exists. It was preempted in 2013 when the DSCSA went into effect. In fact, very few drug serial numbers will ever be verified anywhere within the U.S. supply chain under the DSCSA—even after 2023. The DSCSA requires verification of a drug’s Standardized Numerical Identifier (SNI) only under certain circumstances:
- After November 2017:
- when a manufacturer receives saleable returns
- when a manufacturer is investigating suspect product
- After November 2018:
- when a repackager is investigating suspect product
- After November 2019:
- when a wholesale distributor receives saleable returns
- when a wholesale distributor is investigating suspect product
- After November 2020:
- when a dispenser receives saleable returns (only 10%, or 3 units, of the suspect product must be verified)
Odds are, less than six percent of all drugs flowing through the U.S. supply chain will ever have their serial number verified. Most of those that will be verified will be on packages that wholesale distributors receive after November of 2019 as saleable returns from their customers. Saleable returns is the point in the supply chain that is logically the most susceptible to the introduction of counterfeit drugs today, but no one has ever documented any kind of frequency of that happening, even there. This is Congress’ way of maximizing the anti-counterfeiting features of the law while minimizing the negative impact on the efficiency of the supply chain.
Verifying the serial number only in a small number of situations will help plug the hole in today’s supply chain operation that people assume is the most susceptible, but by doing so, it could also cause a false sense of security everywhere else in the U.S. supply chain. People will see the serial number on drug packages and that could cause them to feel protected. If criminals figure out how to exploit that feeling, there is a chance that the DSCSA could actually make this supply chain easier to game and therefore less safe.
WHAT DOES THIS MEAN?
Pharma serialization laws should not be viewed as air-tight roadblocks to drug counterfeiting. Just because you are forced to put a serial number on your drug packages in a given market doesn’t mean it will protect your product in all situations. There are limits to the value of serialization in fighting crimes, including counterfeiting. Companies who market products that have been the targets of counterfeiters may want to include their own traditional anti-counterfeiting technology on their drug packages—or the doses themselves—in addition to the government mandated 2D barcode with a serial number in it. This is also true of products that have experienced other problems in the supply chain, like diversion or cargo theft. Of course, my favorite anti-counterfeiting/anti-crime technology is fingerprinting, which makes use of the government mandated serial number without adding anything else to your packages (see “Your Plain Old Package: Unlock Its Built-in Brand Protection Capability”).
Just in time for this exact situation, the 6th Pharma Anti-Counterfeiting & Brand Protection Summit takes a comprehensive approach to uphold quality and integrity of your brand and create a pro-active anti-counterfeiting strategy. Be prepared for internal and external audits to improve operations, combat cybercrime and foster unique business partnerships while ensuring compliance with the latest DSCSA regulations. To find out more, download the agenda: http://bit.ly/RxTraceEssayAgenda. You can also download a report from a recent survey of pharma supply chain executives regarding pharma anti-counterfeiting: http://bit.ly/RxTraceSerReport.