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Pharmaceutical Manufacturing and Packing Sourcer

Securing the Supply Chain

Steve Wood of COVECTRA highlights how serialisation and track and trace technologies can combat the flow of illicit drugs into the pharmaceutical supply chain, as well as adding value to genuine products

Combating, counterfeiting and controlling products as they move their way through the supply chain is an important consideration which manufacturers – especially those in the pharma industry – have to deal with on an ongoing basis. However, in recent years, we have seen a critical rise in both the availability of counterfeit drugs on the worldwide market and in the growth of drug diversion as a concern, with the illicit channelling of prescription medications becoming far more common in today’s marketplace.

Counterfeiting and diversion are causing a significant threat to patient and consumer safety. Internet pharmacies, now growing in popularity due to soaring drug costs, are proving to be a potentially dangerous substitution for local pharmacies, with some estimates stating that these sites sell adulterated products nearly 90 per cent of the time. Additionally, pharmaceutical companies are losing millions of dollars each year on returned goods, which ultimately prove to be counterfeit. To combat these issues, manufacturers are beginning to consider the many benefits of serialisation. In addition to increased security and protection from counterfeiters, serialisation options can provide unprecedented supply chain efficiency with solutions for authentication, diversion detection, returns verification, recall management, and brand loyalty and promotion programmes.


The term serialisation refers to the assignment and placement of unique markings on each primary package (such as ‘carton’ or ‘bottle’). These markings can be a 2D or reduced space symbology (RSS) barcode, a human readable letter/number code (for example R3Y8W2H9X5), or alternatively unique serialised codes can be ‘written’ onto a radio-frequency identification (RFID) tag/label. During packaging, these unique codes are placed on each package using variable data printers or pre-printed labels/cartons, and then read by a vision system. The codes are then uploaded to an event repository database, which can be accessed by various parties, including consumers, after the product is shipped and sold. These individual packages can be aggregated, or electronically linked, to the shipping container (for example a case), and even to the pallet by putting unique codes on these other levels of packaging, thus creating ‘child-parentgrandparent’ relationships. As a result of this aggregation, if the barcode on a pallet is scanned at a warehouse, the brand owner or trading partner will know all the shipping containers and individual cartons that are contained within the carton are at that warehouse. Once ePedigree laws take effect, serialisation and aggregation will provide the ability to track-and-trace products from the point of packaging up to the retail pharmacy or healthcare facility.


Serialisation has received a great deal of visibility recently, particularly given current efforts in the US and Europe to tighten up the supply chain to combat counterfeiting. Many steps are being taken to protect consumers, with the FDA serving to tighten up the requirements for tracking pharmaceutical items throughout the supply chain. The FDA’s draft guidance for the industry on Standards for Securing the Drug Supply Chain – Standardised Numerical Identification (SNI) for Prescription Drug Packages – indicates that standards must be developed for identification, validation, authentication, and tracking and tracing of prescription drugs and that an SNI be applied to a prescription drug at the point of manufacturing and repackaging at the package or pallet level.

Regulatory agencies throughout the EU will require the use of serialised 2D barcodes for pharmaceutical products, beginning in 2010 in Turkey and by 2011 in France. California’s ePedigree law, which requires a unique mark on each primary pharma package, takes effect in January 2015, and new Federal legislation is expected to require serialisation throughout the US in the same year. However, many manufacturers can reap the benefits of serialisation well in advance of being forced into action by government regulations, and can ensure that they meet standards in time by beginning to explore and implement new serialisation solutions prior to any deadline dates.


Technologies are now available that can enable a consumer to authenticate a medication unit dose. This lower level of serialisation, which is now attainable, allows traceability down to the tablet or capsule. Several new technologies, including high-magnification imaging and printing of unique codes on each unit blister dose, are available to identify each unit dose on an individual basis. These unique codes can be linked to the primary package (carton, bottle or blister pack), thus providing a link from the tablet up to the pallet. This technology can enable pharma companies and law enforcement to identify sources and locations of diversion. Using new speciality pharmacy distribution models, the supply chain links involved in shipping a controlled substance could be kept transparent from manufacturer to patient if each unit dose is uniquely coded. A primary benefit of serialising down to the unit dose is to provide consumers with the ability to authenticate a product remotely by inputting the unique identifying codes using the internet or a touchtone telephone. Consumers can also now take advantage of technology which allows them to scan a 2D barcode on a package with a smartphone to ensure that the product is legitimate. Once inputted, the consumer can learn not only whether the drug is legitimate, but also the drug’s chain of custody. Authentication can take place at the primary package as well using these same methods.


With the street value of prescription drugs in some cases being several thousands of dollars per package, the illicit sale of these legal drugs has become as serious an issue as sales of illegal narcotics on the street. The National Association of Drug Diversion Investigators reports that over six million people in the US are addicted to prescription drugs, including over two million between the ages of 12 and 17. Prescription drug abuse is now even more prevalent than illicit drug use, creating a surge in demand and, in turn, an increase in diversion activity. Diverters are able to purchase or produce fake prescriptions and obtain drugs at a pharmacy with no identification. For the purchase of controlled substances, some states are requiring that certain information be entered into a state, regional or national database, including patient and prescriber ID.

Serialisation, particularly down to the unit dose, and greater transparency of the supply chain, can provide law enforcement with better tools for combating diversion. A new speciality distribution service is now being developed by most of the large pharmaceutical distribution companies. Under this model, distributors ship drugs directly to a patient in care of a doctor’s office, clinic or specific retail pharmacy. A serialised 2D barcode or human readable code on the primary package is scanned by the speciality distributor when the product is shipped, and then the code is input by the receiving party prior to being dispensed to the patient. When the patient picks up the medication, identification is presented and a signature is obtained, thus providing complete traceability from the point of packaging, through distribution, and finally to the patient. This speciality distribution model has been adopted to provide complete traceability given the delay in the nationwide building of an adequate ePedigree infrastructure, and is now being used for drug products that are highly vulnerable to diversion or counterfeiting.


Pharma companies lose millions of dollars every year by taking back counterfeit products returned for a variety of allowable reasons, including recalls. Today the counterfeiters have access to the latest digital printing technology, which enables them to virtually duplicate the packaging of authentic pharma products. Fortunately, there are technologies to combat this threat. By placing a serialised code on each pharma package, a brand owner can be assured that the returned product is legitimate and recalls can be announced and managed with more certainty, reducing consumers’ concern and enhancing consumer safety while providing cost savings. Additionally, security technology are now available that can be embedded in one or more of the inks used to print labels and cartons. This enables a pharma company’s security team to do spot checks of a product in the supply chain, and at retail sites using proprietary readers, which are programmed with wavelengths that are unique to that brand owner. These taggants are more effective than colour shifting inks, which are now readily available and used by counterfeiters. Also, adding invisible taggants or proprietary holograms as other security layers to serialised 2D and human readable codes provides a highly effective way to protect the integrity of the pharma products, and gives the consumers peace of mind that they are using authentic medications.


The use of serialisation not only provides brand owners with increased security and protection from counterfeiters and diverters, but also with supply chain efficiency, returns management, and innovative consumer education and marketing programmes. With the use of serialisation, manufacturers are presented with a variety of opportunities for driving brand loyalty programmes and can develop a two-way dialogue with their consumers. By placing a unique human readable code on each primary package, or the product itself, brand owners can establish a valuable link to the ultimate consumer or end-user of the product. Using a programme similar to coupons, consumers can redeem an electronic ‘coupon’ using the unique package code. This link between the brand owner and the consumer can be used for creative brand loyalty programmes, and can provide an invaluable source of metadata. Promotional contests and patient education (for example information about the pharma product) could also be conducted by requiring the registration of each consumer in order to receive the education or promotional benefit.

To combat the serious issues of counterfeiting and diversion, we need to educate people about the potential dangers of unintended prescription drug use. Additionally, the medical and pharmaceutical industry needs to continue its efforts to develop effective ways to track pharma products and ensure the safe and deliberate distribution of prescription drugs. To do so, we must start changing the way we package and protect our products in order to ensure their integrity and safety. An increasing number of pharma companies have concluded that it is not a matter of ‘if’ but ‘when’ federal and state governments will require the adoption of methods for identification and traceability of pharma products. These forwardthinking companies have also realised that it may take a significant amount of time to appropriately develop and implement a serialisation technology for each product, and have already initiated corporate plans to equip their packaging lines with serialisation equipment and software. They have also entered into relationships with contract packagers equipped for serialisation. Other pharma companies have recognised that patient safety, supply chain integrity, and recall/return efficiencies are equally compelling reasons for deploying some of the above technologies and methodologies in their manufacturing and packaging operations worldwide.

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Steve Wood is President and CEO of COVECTRA, a Massachusetts based company. Steve has over 25 years of experience in processing and packaging machinery, pharmaceutical security technologies and integrated systems. He received a BSc from the US Naval Academy in Annapolis, Maryland, and then served in the US Naval Submarine Service for seven years, before receiving his MBA from the Yale University School of Management.
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