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On the Brink of Extinction?

There are thought to have been five mass extinction events in the history of the earth – sudden, catastrophic surges in the rate of extinction where, by some estimates, over 90% of existing species are wiped out overnight – at least in geological terms.

While there is debate among scientists about their causes, each mass extinction leaves the world a profoundly changed place; previously successful organisms are wiped out, opening up opportunities for others to exploit.

The losers are soon forgotten, while the winners make the most of the freed-up ecological niches suddenly there for the taking. And this leads experts to ask whether serialisation will become the cause of a mass extinction event in the pharmaceutical industry.

The Bare Bones of Serialisation

Serialisation is increasingly being adopted as a key weapon in the fight against counterfeit and illicit trade in pharmaceuticals. The provisions of the EU Falsified Medicines Directive (FMD) 2011/62/EU, for example, have the potential to reshape the situation in Europe.

From 2018 onwards, a globally unique pack identifier in the shape of a two-dimensional data matrix code will be scanned in the pharmacy at the point of dispensing. It will contain the product code (and possibly national healthcare reimbursement number), batch/lot number, expiry date and a highly randomised serial number. Within a fraction of a second, a series of automatic checks will be carried out against a Europe-wide medicines verification infrastructure of systems.

The dispensing pharmacist will get instantaneous feedback about the status of the product: can the unique identification of the pack be verified as genuine? Has it been previously dispensed, and could it therefore be a counterfeit? Is it still within its expiry date or is it subject to a recall?

This represents an enormous step forward in terms of patient safety, as stated in the aims of the FMD’s Safety Features provisions. But achieving it requires a huge amount of work on the part of pharmaceutical manufacturers supplying the 28 EU member countries, whether they are original brand owners, generics manufacturers, contract packers or re-packagers, or parallel importers.

However, this task cannot be avoided: complying with the FMD’s demands – and similar requirements in many other markets around the world – is now a capability that pharma companies have no choice but to master. Those who do not, and fail to meet these conditions in time will, by definition, go out of business – they will be driven to extinction.

A Long Time Coming

Researchers agree that a major factor triggering the Cretaceous-Tertiary event, which wiped out the dinosaurs, was an asteroid about 10 kilometres in diameter hitting the Earth. Unlike the dramatic and completely unforeseeable appearance of a meteor – a literal bolt from the blue – the legislation now confronting the industry has been a long time coming.

In the EU in particular, early discussions started in the middle of the last decade, and the direction, likely scope and shape of the requirement has been available for all to see since the EU Directive 2011/62/EU became law just over three years ago. The industry has had fair warning, and plenty of time to prepare and act.

Driven by earlier, similar compliance requirements in markets such as Turkey and China, companies like AstraZeneca, Roche and Boehringer-Ingelheim have well-established implementation programmes already in place. They find themselves in the relatively comfortable position where – with considerable additional time, effort and investment – they will be able to meet the requirements of the FMD, the US Drug Supply Chain Security Act, and the many other requirements announced or anticipated across the steadily growing numbers of global markets.

Risky Business

But if we look at the smaller pharma companies, a very different picture emerges. True, there are mid-sized and smaller firms that have embarked on the march towards compliance and have put credible implementation programmes in place; some, even, which are positioning themselves not just to survive the coming storm, but to be ready to pick up the business of those that have not moved and will go under.

However, observers of the industry agree that these companies are still in the minority. There are many that are not moving forward fast enough, and others not at all, despite having the means at their disposal to take action, get ready and prepare.

What is clear to the observer – if not the decision-makers in charge – is that these companies are wilfully or unintentionally putting their businesses at risk. The question one might ask is: will this lead to a significant shake-up of the industry – and maybe even a mass extinction event?

In Denial

So why, then, is there this apparent brinkmanship on the part of some, mainly small and medium pharma organisations, in the face of serialisation requirements? After all, serialisation is a compliance requirement and, as such, a core capability for all pharmaceutical manufacturers who need to maintain their licence to operate.

Uncertainty is often cited as a key barrier. Until the publication of the Safety Features Delegated Act (DA) – expected in early 2015 – managers can hide behind the lack of certainty as a reason not to act. This is particularly noticeable with regulatory managers, whose inability to deal with the ‘shades of grey’ in serialisation legislation effectively prevents projects getting off the starting blocks.

Many companies seem to be in a state of denial regarding the requirements, despite recent updates from the European Commission (EC) via Europe Direct, the EU information service that gives the clearest indication yet as to when the DA is to be expected.

The EC has stated it aims to adopt the DA in the first quarter of 2015, with publication in the Official Journal of the European Union in the second half of 2015. This sets the three-year compliance clock ticking, and gives manufacturers the unambiguous message that inability to comply will prevent them from selling their non-compliant products in Europe.

No Easy Ride

Some companies are hoping for a soft start to the requirements in Europe, but again the EC has made it clear that the three years between the issuing of the DA and the compliance date is considered enough of a transitional period. Therefore, only products that comply fully with the FMD’s requirements can be manufactured and supplied to any of the EU’s 28 member states (or the estimated 25 member states with no equivalent safety features) after the compliance date of mid-2018. There is a two-year transition period proposed, but this is simply to allow non-serialised products already in the supply chain at the compliance date to find their way out before they are recalled from the market.

That message should be clear enough, yet to many smaller companies, 2018 still seems a long way off. They are banking on their agility to enable them to implement serialisation programmes much faster than the published timescales of the Big Pharma early adopters.

Ignoring the experience and warnings of these larger companies, however, is dangerous – and while smaller businesses may well be able to move more quickly, they will have problems of their own that will slow execution.

Short-Term Solutions

Another barrier to implementation arises from the way the message is – or is not – being circulated within the industry. Looking at the guidance and updates made available, a pattern begins to emerge in some markets where wishful thinking, a lack of focus by industry associations, and preoccupation with other (admittedly important) aspects of the FMD combine to dilute the message that urgent action is now required and unavoidable.

Add to that the complex politics being played out between different participants within the sector as they fight to protect their interests, and one wonders if winning a skirmish in the short term can warrant losing the battle for survival in the long run.

Learning From History


History shows us that mass extinction events generate both losers and winners, and it seems increasingly likely that a number of established businesses today will not survive serialisation other than in the fossil record. Pharma companies who want to be winners need to get ahead of the competition; those that recognise that serialisation is now a core capability will have the potential to survive and even flourish, taking advantage of the niches that open up as companies who have not understood the urgency of action are forced out of the market.

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Former AstraZeneca serialisation expert, Ian Haynes, is a respected thought leader on coding and serialisation for the pharmaceutical industry. Along with partner Christoph Krähenbühl, he runs 3C Integrity Consulting, a specialist advisory firm that operates two-day training programmes to fully prepare pharma companies of all sizes for implementation.
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