As we kickstart the last quarter of 2021, the federal deadline for full interoperability in pharmaceutical serialization, as dictated by the DSCSA (Drug Supply Chain Security Act), will soon reach its two-year countdown on November 27. Since November 2018, all manufacturers, including virtual manufacturers and brand owners, have been required to serialize products at the lowest salable unit. Products that do not contain a unique serial number on the packaging, along with other required information (GTIN, serial, lot and expiry date), are not authorized to be sold or purchased. As stated in the guidelines, “Failure to comply with DSCSA can lead to fines, suspension or revocation of license, and even potential imprisonment or civil penalties.”
Technical challenges coupled with a global pandemic have hindered the roadmap towards serialization compliance. Pressured by the supply chain amidst the COVID-19 outbreak, the FDA announced an enforcement discretion on verifying salable returns — a major DSCSA milestone originally planned for a November 27, 2020, deadline. However, the FDA also stated that further postponements to the legislation were highly unlikely to happen. Furthermore, the major pharmaceutical distributors also announced plans for and expectations that all manufacturers and brand owners be fully prepared for serialization interoperability by November of 2022 — one year before the official federal deadline.
Most pharmaceutical manufacturers and brand owners have taken initial steps to assure DSCSA compliance, with various degrees of success — or a lack of, in many instances. However, several organizations are now facing whether to adhere to original plans and retain their current service or pursue assistance elsewhere. Although every serialization project contains its unique individual characteristics and challenges, there are some common points to consider before renewing a serialization contract.
Performance: Is your system performing as intended? Are test and production results positive, or are there ongoing issues? System performance throughout the packaging site and the supply chain should undoubtedly be the most evident concern for any organization implementing serialization.
In 2018, the FDA conducted a pilot study to validate the data embedded in data matrix bar codes printed on pharmaceutical product packages. Even among large drug manufacturers, results were far from impressive, with anywhere from 15–25% of products returning bad data results on perfectly legitimate products. In this particular scenario, most of the data errors resulted from brand owners using CMO’s and contract packagers, which were using serialization solutions with poor performance. Hardware and equipment failure on the packaging line level are also common issues that may hinder performance.
If your serialization solution performance has been subpar and underperforming during the initial stages of serialization, chances are you should be considering a new partner to manage your serialization needs.
Scalability: Are you able to leverage growth and expand on production with your current solution? Scalability goes hand in hand with performance. As all organizations target expansion, being able to sustain growth is an important aspect to consider. Often with serialization, adding new product SKUs in production may be cumbersome. Your serialization solution should be flexible and allow you to seamlessly add and manage new SKUs without the need to drastically modify current workflows in place.
In recent surveys conducted by the HDA (Healthcare Distribution Alliance), its results suggested that slightly over 50% of drug manufacturers indicated to be prepared for data aggregation and interoperability. Furthermore, when asked about common issues encountered during serialization implementation, the most frequent complaints included difficulty in managing product master data, failed files, server timeouts with margins of error above 30%, ongoing difficulties when establishing connections to exchange lot and serialized data with CMO’s and 3PL’s.
Additionally, the industry has seen a consolidation amongst serialization solutions providers to better service client needs. New providers have entered the space, while others have been acquired or merged with other organizations. Although it may not be definitive, if your serialization solution fails to perform in its early stages, it is highly unlikely to successfully handle scaling and sustaining growth moving forward.
Support: Is your serialization provider catering to your requests? Are support tickets handled without delay? Although not exclusive to the serialization arena, customer support remains one of the most critical aspects of client retention and satisfaction.
In the beginning stages of DSCSA implementation, many organizations rushed to partner with a serialization provider without much due diligence or knowledge on requirements. As a result, the number of service providers was limited, and clients had fewer options to choose from. This led to many organizations signing standard three-year contract agreements with optional renewal terms from the fourth year onwards. With fewer options in the playing field and a rapid increase in customers, technical support fell behind.
Unfortunately, it is not uncommon to hear about unsatisfactory customer experiences. Some of the common complaints are constant changes in project management personnel, lengthy wait periods to receive responses for support requests, and increasingly elongated ETAs to resolve technical issues are. Carefully consider whether your service provider is capable of supporting your requests in due time.
Cost: Is the total cost for your serialization solution aligned with your company budgets? Are all costs inclusive in your serialization contract, or are you billed separately for services such as support? As the market and technology matures, costs traditionally tend to decrease. This trend also applies to the pharmaceutical serialization space.
Serialization service costs are generally broken down into two categories: Implementation fees (usually billed as a one-time, flat rate to install and deploy the solution) and subscription fees (ongoing recurring costs to maintain your service). Implementation fees tend to be higher than recurring costs — although this may not always be the case. When searching for a solution or considering renewing services, one should consider the overall costs for implementation, maintenance, and separate fees that may accrue (e.g., connecting new trading partners, adding additional SKUs, after-hour support, etc.). Contract length and flexibility to terminate an agreement should also be taken into consideration.
Furthermore, the concept of “perceived quality” based on cost also plays a vital role in decision-making. As already stated, due to a maturing market, cost-competitive solutions are now more readily available to choose from. One should not imply that lower-priced solutions are inferior to higher-priced services and vice versa. Ask your peers for recommendations and request your prospective service provider to provide references for organizations with similar business models to yours.
Andre Caprio
There isn’t a “one size fits all” approach to the problem, as many solutions are available in the marketplace. As organizations navigate through the planning process, one should consider exploring alternatives that may produce valuable improvements in performance, scalability, cost of ownership, and overall customer experience. Start your research early and be willing to make modifications to your original plan as needed. Assess your alternatives and draft a plan of action to ensure a seamless transition from one provider to another. Having clear objectives based on thorough research and selecting the appropriate solution provider will maximize the success of your serialization project moving forward.
Andre Caprio serves as director of new business pharmaceutical and healthcare at Covectra. He has over fifteen years of experience in the life science market. His primary focus is now on DSCSA compliance. Andre can be reached at [email protected].