Pharma 'may be overconfident' on serialization readiness

Pharma companies and contract manufacturing organizations may not be as prepared as they think to meet serialization deadlines in the US and EU, according to a recent survey.

The poll of 660 companies* – revealed towards the end of last year by TraceLink and market research firm Penn Schoen Berland (PBS) – gauged the readiness of drugmakers and other supply chain partners to meet the requirements of the EU Falsified Medicines Directive (FMD) and the Drug Supply Chain Security Act (DSCSA), both of which have deadlines looming within the next year or so.

The responses revealed that around a third of respondents felt they were “very ready” for the DSCSA and FMD, although no single company had completed all the basic steps for serialization, and in most cases no single step has been completed by all the companies.

“The reality we’re facing is that pharma companies who feel very ready are considerably less ready than they think,” said Carter Holland, TraceLink’s chief marketing officer, whilst presenting the results in a webinar. A written report of the survey findings will be published later.

Among the third of companies professing to be ready for the DSCSA, most had taken steps to prepare for master data management, shipping serialized product in time, understand the requirements and have enough resources allocated to drive the implementation process.

However, only around half had projected the number of units they would be serializing per year, just over a quarter had carried out a serialization pilot. Moreover, just 13 per cent had serialized one fifth of their volume, 11 per cent said their contract manufacturing partners were mostly (80-100 per cent) ready to ship and 8 per cent were integrated with their CMOs.

Drilling down into the steps reveals that the industry “still has a lot of work to do to prepare,” said Holland, and TraceLink estimates that only around one quarter of pharma companies are truly prepared to meet the DSCSA requirements on time.

In a similar manner, no CMO company had completed the basic steps, but more had conducted pilots (around three quarters) and a third said they had 80-100 per cent of packaging lines ready. At the other end of the spectrum however, more than 90 per cent had concerns that equipment shortages might affect compliance.

With regard to the FMD, which has a longer implementation runway, once again no company had completed all the steps but in general there was a greater degree of readiness on master data management and serialized unit projections, for example. There are however still concerns about the pace of getting connected to the EU hub and pharma companies integrating with the majority of their CMOs.

“Overall, the story is similar to the US with a number of steps still to completed,” said Holland, with TraceLink estimating that only 15 per cent of this group are truly on the path to serialization readiness, and although most are in the “somewhat ready” category there is a sense that there is over-confidence in the ability to reach compliance, particularly among CMOs.

Preparation disparity in Europe

Among pharma companies, 68 per cent said they were somewhat or very prepares for serialization, with 4 per cent yet to start the process. In comparison, 94 per cent of CMOs aid they were somewhat or very prepared, but almost half (46 per cent) had yet to get going.

Commenting on those data points, TraceLink chief executive Shabbir Dahod said companies serving the EU market seem to be viewing the integration with the European hub and national medicines verification system (NMVS) as simple, whereas in reality it is quite complex, and may be being lulled by the longer implementation timeframe which is actually only a few months longer than the US.

There is also a lack of understanding about the complexity of the EU market, which involves a full supply chain implementation spanning not just pharma manufacturers and CMOs but also wholesalers, parallel importers, hospital and retail pharmacies, and NMVSs in 22 countries.

“They don’t have much more time, there implementations are actually even more complex than the US, and on top of that most started later than the US companies,” he said. “That’s going to pose a significant challenge in 2018.”

Serialization deadlines are later in the US for wholesalers, but 26 per cent of them are considered to be early movers – with a majority taking steps such as participating in pilots and working out how to handle saleable returns, for example. Around 11 per cent of hospitals and pharmacies are considered early movers, according to the survey.

* The survey included pharma companies (174), CMOs (155), wholesale distributors (50), hospitals (195) pharmacies (81) and third-party logistics (3PL) providers (11)