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Drug Serialization Requirements for Retailers

Drug retailers have been facing increasing regulations over the past few decades, as governments have placed more of an emphasis on consumer protection. Counterfeit drugs are extremely harmful and pose a significant threat to existing drug manufacturers; the introduction of fake medicines into circulation has caused many people to lose trust in the privatized healthcare system in the US.  The pharma supply chain is specifically regulated by the Drug Supply Chain Security Act (DSCSA), which is soon to be updated; this will have a substantial impact on current retailers and affect serialization requirements for retailers.

Overall, the DSCSA protects patients’ “five rights” of medication use: assuring correct drug assignment to the right patient, at the right time, in the right dose, and through the right route. While phase one, traceability, ended in 2020, phase 2 is expected to begin in 2023 and will entail a fully functional electronic interoperable track and trace system. The pharma industry is making linear progress towards meeting their goals established by Phase 1, as 90 percent of packages and cases scanned at AmerisourceBergen Corporation, McKesson Pharmaceutical and Cardinal Health, met all the labeling requirements.

Why Serialize?

Counterfeit pharma is much more typical than one may think; 1 in 10 medicines worldwide are counterfeit, and 95% of internet drug outlets are out of compliance with federal and state pharmacy laws. In March of 2020, over 48,000 packages containing counterfeit medicines were seized by Interpol in the time span of one week.

Serialization is thus used to help prevent potential threats, requiring a serial number to be attached to each unit of a prescription drug product. The information linked to the number includes Four standardized data elements including a National Drug Code (embedded in the Global Trade Item Number®, GTIN®), serial number, lot number and expiration date. Investment in serialization machinery, though necessary, can bring significant risks, as noncompliant or unusable barcodes are frequent and may overhaul a retailer with many inventory issues. It can also post a large challenge to smaller retailers that may not have the infrastructure or capital available to meet the current demands. Currently, this information is screened, and as of November 27, 2020, dispensers only accept products with labels. For the next step, it is expected that in 2023 there will be unit-level traceability.

Challenges Behind the Drug Serialization Requirements for Retailers

Historically, there have been challenges that posed a significant hurdle in advancing serialization attempts. Many of these issues have been accounted for or are in the process of being resolved. They include:

  • Exchange of large, complex data requiring standardization
    • Many measures and standards have been adopted to enable the exchange of this complex data. This includes a standard for the exact labeling of items and Global Trade Item Number (GTIN).
  • Infrastructure to scale information quickly
    • Track and trace infrastructure has become increasingly resilient and stable. The Global Data Synchronization Network (GDSN®) is a master data source that ensures continuous real time information exchange, and the Electronic Product Code Information Services (EPCIS) is one of two electronic methods of DSCSA data exchange.
  • Agility and ability to adapt to regulatory changes
    • The next regulatory deadline will be in 2023, giving retailers, wholesalers and dispensers time to react. 1 percent of specialty packages tracked by AmerisourceBergen; 86.6 percent of packaged drugs tracked by McKesson; and 93.1 percent of homogeneous cases tracked by Cardinal Health already meet the standards established by the deadline.
  • Widespread data security
    • As data becomes more widely available and processes for collection are enhanced, the likelihood of cyber-attacks is increasing. Although data security has been simultaneously advancing, it is important that this area continue to see attention as we enter a more digitized world.

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Coauthor and contributions by Alexandra Hatsios