Serialization of Drugs - A New Milestone for Smart Cities

The U.S.-issued Drug Supply Chain Security Act (DSCSA), to commence in 2017, mandates the serialization of pharmaceutical products to the smallest saleable unit. This is expected to be completed by 2023. Similarly, the European Union (EU)-issued Delegated Regulation (EU) 2016/161, known as the Falsified Medicines Directive, mandates the serialization of pharmaceutical products and deployment of anti-tampering devices commencing in February 2019. Belgium, Greece, and Italy are exempt from this and will have the option to defer application of the regulation by a maximum of six years.

Serialization involves assigning a unique identifier, or UI, (e.g. a number) to an item (e.g. pack, case, or pallet level). It utilizes radio frequency identification (RFID) or barcode technologies and stores the information from the UI (e.g. manufacturer, serial number, batch number, expiry date and national reimbursement, country of origin, etc.) on a cloud-based server. Hence, RFID and barcode technologies are creating smart environments for the manufacturing and logistics industries, boosting economic growth and increasing government tax revenues.

• Smart Manufacturing. RFID tags or barcodes are embedded on pharmaceutical products (raw materials and finished products), and readers are strategically positioned around a facility or on machines, bringing the functionality of Internet of Things (IoT) connectivity to the manufacturing platform. The integration of big data capabilities is a key enabler, as the technologies allow manufacturers to gain real-time, full product visibility at various stages of production and enhance inventory accuracy. The predictive analytics provide manufacturers with alerts that identify which raw materials need stock replenishment. This will ultimately minimize disruptions in the production process, boost efficiency, and optimize machine uptime. The RFID and or barcode technologies replace the legacy system of paper-based and manual processes, which in turn, minimize errors, improve product quality, and mitigate counterfeit threats.
• Smart Logistics. RFID tags or barcode chips can be placed on pallets, boxes, vehicles, and/or containers. They enable fleet managers to remotely track shipment or asset locations anytime, anywhere. They also minimize incidents of damaged goods arising from adverse temperature, breakage, tampering, etc. RFID with sensors can monitor the environment of the shipment or storage space (e.g. provide an alert for any discrepancies regarding pre-determined temperature, shipment statuses, etc.). RFID collects precise production data, enabling stakeholders to remotely identify counterfeit products, verify the authenticity of products by their UIs, track expiry dates, and boost efficiency of reverse logistics (e.g. minimize large-scale product recalls on unaffected items).
• Economic Growth. Sales of counterfeit drugs translate to revenue loss to pharmaceutical firms, and consequently tax revenue loss to the government. Interestingly, the integration of RFID into the ecosystem will help mitigate counterfeit drugs from reaching the market, which in turn, boosts economic growth, as measured by the contribution of pharmaceutical industry to the country’s gross domestic product.

Serialization and RFID technologies will boost public safety, and in turn help to combat counterfeit drugs and ensure that genuine pharmaceutical products reach the market. According to Pfizer, the low efficacy of counterfeit drugs can compromise disease management and patient safety.

The Asia-Pacific (APAC) region is a promising market for RFID. Pharmaceuticals product manufacturers based in Asia that export their products in the U.S. and EU need to comply with the serialization requirement.In addition, the California ePedigree law indicates the likely migration from barcode to RFID technologies. ABI Research estimates that revenues from RFID in APAC will increase at a double-digit growth rate at a CAGR of 14.3% from 2016 to 2021. China, India, South Korea, Brazil, Argentina, Turkey and Saudi Arabia all already mandated pharmaceutical product serialization.