Preparing for a serialized supply chain

Pharmaceutical CommercePharmaceutical Commerce - July/August 2013

Upcoming California regulatory mandates, and the prospect of a national compliance requirement, are focusing industry attention. Here's what some industry leaders have to say

The advent of product serialization and enhanced supply chain visibility is imminent as the 2015 California drug pedigree requirement deadline quickly approaches. With less than two years to go, manufacturers are at various stages of preparation. To find out more about the current state of serialization and data sharing efforts, we spoke with some progressive manufacturers about their perspectives and next steps the industry must take to move forward with this process.

Product serialization: the business benefits

In addition to the widely recognized benefits of enhancing patient safety and helping to ensure regulatory compliance, manufacturers anticipate additional benefits to emerge from product serialization. Some foresee a more granular level of visibility into product movement within the supply chain. According to Mike Rose, VP of supply chain visibility at Johnson & Johnson Health Care Systems Inc., this finer level of detail will allow his company to innovate by making better business decisions around supply chain integrity, inventory management, returns and rebates. This sentiment is echoed by Peggy Staver, director, product integrity at Pfizer, who added that once we have widespread adoption of serialization and are exchanging serialized information, financial processes like chargeback administration, rebate processing and pricing of returned goods can also be streamlined.

Rich Feldman, VP of trade and product security at EMD Serono, also touches on the topic of returned products, but from the viewpoint of protecting product authenticity and lowering healthcare costs. If manufacturers have the ability to track units, then they can better ensure that patients are taking authentic medicine. With the rise of Internet pharmacies and increased purchasing of products over country borders, the risk that a patient could accidentally purchase and take a non-authentic product is growing. On top of that, if the product is then returned, it could then re-enter the supply chain and potentially be resold. With serialization in place, manufacturers will be able to track individual unit serial numbers and better identify incorrect returned product. As these non-authentic products are taken out of the supply chain, the risk is lowered that patients could obtain goods that do not have therapeutic effect, and will therefore reduce the impact of higher healthcare costs for the individual and the system.

Improving business processes with better data

Manufacturers anticipate that improved business processes will likely result from widespread product serialization data access. A common process that will be improved is recall management. According to Staver, serialization data will help to more quickly identify where recalled product is in the supply chain and more efficiently remove that product before it reaches patients, enhancing patient safety. In addition, in the case of in-transit cargo theft, Staver points out that a manufacturer would know what serial numbers were involved in the stolen shipment and this may avoid the need to recall an entire lot of product, if only a portion of the lot is stolen. Feldman adds that the ability to recall only certain serial numbers could also help prevent product shortages that may come as a result of a full lot recall.

Better data access can also help streamline accuracy of orders, and returns processing because manufacturers will be able to verify data about delivered shipments, according to Rose.

Sharing data: point-to-point vs. the cloud

When it comes to sharing serialized product data there are two options: point-to-point or cloud-based solutions. Point-to-point solutions are typically the starting point for manufacturers as they begin the data-sharing process, but these solutions have their limitations. According to Kimberly Fleming, senior manager, product security at EMD Serono, the company started using point-to-point on pilot projects and is now familiar with its restrictions. Based on their work, point-to-point has proven to be time consuming and hard to manage.

Lloyd Mager, manager, strategic initiatives, supply chain operations at AbbVie, also mentions that he evaluated point-to-point solutions, but determined that they were not likely to be a manageable alternative and could lead to issues with master data downstream.

Cloud-based solutions offering a repository and communication hub to receive, analyze and transmit data between trading partners are emerging as a next step for many companies. These systems enable supply chain visibility, chain of custody reporting and track and trace functionality across the supply chain. Staver says that while much of the work Pfizer has done so far has been with point-to-point, it is starting to look at cloud solutions as a real opportunity moving forward. The cloud will allow Pfizer to post information and push it to trading partners seamlessly. This point is echoed by Mager, who said he feels data will be more secure in a cloud, than spread-out across the supply chain.

Another benefit of a cloud-based solution, according to Rose, is that it does not require a heavy footprint at the customer level. The flexibility of the cloud opens up opportunities for other services like track-and-trace and product authentication.

Roadblocks: the hiccups to every new process

New processes implementation usually has a few roadblocks along the way. According to Feldman, industry participants need to put in the effort to make product serialization happen instead of focusing on reasons why it can’t be done. If stakeholders engage at the same time, and test solutions together, then this will help eliminate potential issues. Increased trust among trading partners will also help push the process along, said Rose, who suggested industry participants should not focus on monetizing the data, and instead focus on sharing it to benefit healthcare as a whole.

When it comes to internal roadblocks, Fleming and Feldman report few hiccups with their own efforts to utilize serialized data in pilots. There were some initial master-data issues with slightly different wholesaler names and addresses in different databases, but once this data was cleaned up, they reported no technological issues with transmitting data in their pilot projects.

The question is whether this pilot project success will translate to the entire industry. Looking at their own trading partners, some manufacturers are concerned that technology barriers will hinder the widespread use of serialized data, especially on the provider side. Mager and Staver mention lack of provider technical capabilities as a concern, particularly with small, independent pharmacies. The investment in the technology to allow shared data may be too high for some providers, says Rose, accentuating the need to develop lower cost solutions for pharmacies. While some pharmacies have scanners today, a culture among all parties to obtain and use this technology will need to be developed within the supply chain and be widely accepted.

Who needs these data?

A culture of scanning and utilizing product data must be universally accepted within the supply chain, because all parties, at some point, will need access to this information. EMD Serono anticipates that anyone who it ships and sells products directly to will need to access the data, including wholesalers and pharmacies with direct relationships to the company.

Data sharing will also not be a one-way exchange from manufacturer to other parties, added J&J’s Rose. He envisions a two-way data exchange, and highlights how it will require security measures in place that can be achieved through use of a cloud-based service that can segment customers to varying levels of data access.

Potential parties that may require data access expand beyond trading partners, to regulators, law enforcement and even consumers at some point in the future. Fleming mentioned how EMD Serono has already worked with law enforcement, providing product data to assist in investigations. Mager echoes this need to be able to provide data to enforcement bodies, specifically regulators who may need this information. Staver points out a growing trend in some developing markets and elsewhere to directly involve the consumer in this process through the use of mobile phone services thwat access serialization data to authenticate products.

Preparing for the future: tips to begin serialization efforts

As forward-thinking manufacturers are refining their product data sharing efforts, there are others who have not yet started on this journey. The overarching recommendation for these manufacturers is to start as soon as possible. But, how can they start this process? Fleming and Mager recommend pilot projects, which their companies have already conducted. It’s important to test not only small volumes, but real-life commercial volumes, said Fleming. While organizing pilots, manufacturers must also ensure they get the senior management team involved and establish a budget.

Teamwork is critical when starting the path to pilots. Mager suggests that companies not try to tackle pilots on their own, but rather look to other industry participants to work together. If manufacturers can leverage one another’s work and best practices, this can play a large role in the evolution of data exchange.

Manufacturers can also engage other industry organizations that have knowledge on the steps necessary to complete this process. Staver and Rose highlight GS1 as an organization that can be a great resource to help participants understand requirements and capabilities.

There is no time to waste for manufacturers who need to jump on the product serialization bandwagon. With deadlines looming for California and a potentially larger federal compliance initiative, the entire supply chain must get on board to ensure that data can be seamlessly exchanged to enhance patient safety and advance the healthcare supply chain.


As executive director, global strategy at GHX, Margot Drees leads strategy for an organization that brings together healthcare providers, manufacturers, distributors and GPOs in a collaborative and connected community to improve efficiencies, visibility and accuracy in the healthcare supply chain. Drees is responsible for development of an industry solution for track and trace and e-pedigree.

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