Post Serialization: Have we done enough to secure the global supply chain?

Systech reviews the progress made so far in the efforts to combat anti-counterfeiting and what weak points still exist




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In this article, Systech reviews whether progress has truly been made following serialization, or if we need to do more to secure the global supply chain. For full insight into this topic, read their in-depth whitepaper. 

 

The industry seems poised to step up onto the first plateau of their mountain climb to the summit—compliance towards unique product identification.

This part of the journey was certainly a Herculean task given the level set required for subject matter expertise, problem identification, standards development and the enablement of resources.

However, just as the industry gets ready to raise their arms in a “V” for an initial victory and accomplishment, we all need to step back and ask the question: What has truly been accomplished?

Having multiple formats and disparate guidelines transformed pharmaceutical serialization from an anti-counterfeiting and patient protection initiative into a “compliance” mandate for manufacturers. More than that, the counterfeiters out there quickly realized that:

  • These systems are not globally integrated
  • Copying and fabricating serialized barcodes is easy
  • There are plenty of geographies around the world with no serialization requirements whatsoever.

A shortcoming is best highlighted at this juncture. In order to achieve compliance, the industry has lost sight of the issues that put this dedicated effort in motion. The regulatory requirements that have driven serialization enablement to this point are mainly directed at the United States and the European Union—two of the safest and most secure pharmaceutical supply chain markets in the world. Meanwhile, bad actors remain unchallenged in areas such as counterfeiting and product diversion that the industry sought to thwart.

These threats continue to endanger patient safety, damage company reputation/brand integrity and steal industry profits.

 

Post Serialization: Product Identity Challenges

Serialization was introduced by governments as a mechanism to protect the pharmaceutical supply chain. Whether it actually does, is up for debate. While there is little doubt that serializing each salable unit of medications will be a good thing overall, will it truly end global counterfeiting and supply chain diversion? That answer is likely “no”.

But is there a way to leverage this significant investment for greater value and protection?

Read More: In this whitepaper, Systech details how to drive value from serialization and increase your internal efficiency

Serialized barcodes are easily copied. There is comprehensive data contained in serialized 2D barcodes that when scanned can be used to find much more pertinent product information. Unfortunately, counterfeited products with a replicated barcode read the same and provide the same information as the legitimate item.

If we look at the EU Falsified Medicines Directive, for example, it utilizes a “bookend” model for drug authentication. First, each drug is identified with its product code and serial number and commissioned upon packaging. These numbers are communicated to a central repository or “hub” for storage. The medication then passes through the supply chain without ever being scanned. Then it is scanned upon dispense to the patient. This is bookend authentication.

Counterfeited products with a replicated barcode read the same and provide the same information as the legitimate item 

If a counterfeiter obtains, then replicates, a legitimate serialized barcode that is already in the central hub, they will have a fake product that completely mimics the legitimate product when scanned. Meaning, if they inject their counterfeit product into the legitimate supply chain, and the counterfeit is scanned before the legitimate product, it will be authenticated as legitimate. Subsequently, when the legitimate product comes through later and is scanned, it will be recognized as “dispensed” and flagged for investigation and removal.

Additive and overt mechanisms like foils, seals and holograms are also easily available to counterfeiters. With the profit margins seen in the counterfeit industry, along with the innovations and cost reductions in commercial printing technology, counterfeiters have an easy time of making their illegitimate products look legitimate.

This is especially true in markets where there is no serialization mandate. No serialization equals minimized focus on regional pharmaceutical supply chain security and safety.

Related: Frank Binder, Santen Pharmaceuticals, discusses the early challenges with serialization compliance

 

Establishing Individual Product Identity Goes Beyond Compliance

As with human identity, the concept of product identity relates to the combination of characteristics that make one product uniquely recognizable over another. Establishing a product’s identity involves the collection of multiple data points throughout its lifecycle to render it unique. The shift towards item-level traceability coupled with the development of intelligent consumer interfaces and smartphone technology offers manufacturers the opportunity to drive competitive differentiation from the personification of their products.

Initial industry investment in establishing product identity has been largely driven from a defensive perspective—in response to consumer safety issues or concerns about brand protection. While the value created by product identity varies by industry and brand, it goes far beyond this defensive positioning.

Product identity can be used to solve real business problems and offer tangible returns through cost reduction, revenue protection and revenue generation. It is important to consider the totality of these benefits when determining the value of product identity to a given brand owner.

eFingerprints through serialized 2D barcodes could provide next level security and authentication

Pharmaceutical companies can leverage what already exists on their drug packages—serialized 2D barcodes—to derive a unique digital identifier (e-Fingerprint®) for every product that can be used for item authentication.

In theory, serialization gives us uniquely identified products. But innovative solutions like e-Fingerprinting can help truly accomplish what regulatory bodies set out to do with serialization. That is, give each drug package a unique digital identity that can be used to confirm product authenticity, combat counterfeiting and prevent product diversion.

This approach leverages the power of smartphones and mobile networks to image the barcodes wherever the package is in the world, and uses it to authenticate that product immediately. With e-Fingerprinting, the product becomes instantly “connected” to the Internet of Things. The non-additive nature of this technology also represents a substantial cost saving on capital purchase, artwork redesign and change management as compared to additive solutions like RFID.

This might be the answer for brands fighting counterfeit goods and product diversion in minimally regulated markets.

 

Have you read our latest industry update? Find out how the 2020 Russian Serialization requirements will impact your supply chain

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