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The fight against counterfeit drugs in the pharma supply chain

A circle of blue pills with one red pill with a skull and bones marked on it

If you have been diagnosed with a serious life threatening disease, your focus should be on getting better. Between countless doctor’s appointments and exhausting treatments, the last thing you need to worry about is whether your prescribed medication could be counterfeit. And yet in 2019, batches of fake Iclusig surfaced from a local wholesaler in Switzerland. The fake Iclusig did not contain the active, cancer-fighting ingredient, but it did contain acetaminophen.

According to the World Health Organization, one in ten medical products in low and middle-income countries is counterfeit. And while distributing   may be lucrative for the perpetrators, the risks that counterfeit drugs pose to human health can be significant and dangerous.

The threat of counterfeit drugs

Counterfeit medicines take different forms—they may contain no active ingredient, the wrong active ingredient, or the wrong amount of the correct active ingredient, according to the WHO. Counterfeit medicine may also contain toxic—potentially lethal—ingredients, including bacterial contamination arising from the often unsanitary, unregulated conditions in which they are manufactured.

When it comes to life-saving medications, the dangers are particularly worrisome. Not only are patients putting themselves at risk by unknowingly taking potentially unsafe counterfeits, they’re failing to receive the critical benefits of the genuine drug they’re supposed to be taking.

The problem of counterfeits is most pronounced outside of the regulated supply chain, from possibly illegal internet pharmacies to the casual sharing of medicines among friends and families. International law enforcement is working to clamp down on criminal activity, and regulators worldwide are tightening frameworks. The European Union introduced The Falsified Medicines Directive in 2013 to better regulate the pharma supply chain in the EU. Around the same time, the United States passed into law the Drug Supply Chain Security Act (DSCSA), which places significant additional guardrails around the U.S. pharma supply chain.

The emergence of the Drug Supply Chain Security Act

According to the Partnership for Safe Medicines, the United States is widely acknowledged as having one of the most secure pharma supply chains in the world. However, it is not immune to bad actors seeking to pass off counterfeit pharmaceuticals, as in the case of Iclusig and other pharma products illegally manufactured overseas.

Enter the Drug Supply Chain Security Act, which seeks to tackle the threat posed from counterfeits by strengthening the robustness and security of the regulated pharma supply chain within the United States. The legislation arose from a patchwork of regulations introduced primarily at the state level during the 2000s.

These rules led to the existence of a transactional document, widely referred to as a pedigree, generated by the drug’s manufacturer and passed to each entity that held title to that product. "That statement would stay with that product until it made it to the last retail stop, whether it be a pharmacy or a doctor," explains Tim Bishop, UPS director of healthcare compliance for North America. 

This patchwork of state rules, while a good start, proved piecemeal in its effectiveness. Driven by the industry’s desire for a nationwide standard, the federal Drug Supply Chain Security Act emerged in 2013.

One key aspect of the DSCSA is that it requires supply chain participants to be recognized as authorized trading partners and only to transact with other such parties. The DSCSA also requires the existence of a transaction document, much the same as the pedigree, which moves through the supply chain and is retained for a designated period.  

"The idea behind DSCSA is traceability throughout the entire supply chain," says Molly Rinker, UPS serialization supervisor for the United States.

Adopting serialization in the pharma supply chain 

The adoption of serialization, which means the application of individual product identifiers at the unit level, is another core feature of the DSCSA.  

Under the act, manufacturers and repackagers are required to apply a unique product identifier—which includes the product’s national drug code (NDC), a serial number, lot number, and expiration date—to the unit’s primary and secondary packaging.

This is good for traceability. For many years, most pharma products were only tracked by batch or lot number, which made traceability difficult when problems arose. In the event of a product recall or a question about a product, tracing could only take place at the batch level. However, units from that batch may have been distributed to dozens of different supply chain partners. 

“What serialization does is get it down to the unit level,” says Bishop. “If you're dealing with a specific unit, you know exactly where that came from and exactly where that unit went to. It's a more surgical approach to track and trace."

Advancing interoperability

While this makes sense in principle, the logistics of implementing serialization for pharmaceuticals can be daunting in practice.

One thorny challenge is that of interoperability: ensuring that serialized product data is electronically available to all authorized trading partners in the supply chain. By 2023, the industry is required under DSCSA to have fully migrated to an electronic means of communicating serialized data among trading partners. Interoperability requires a mechanism to electronically authenticate that the manufacturer made the product and produced, or commissioned, the unique serial number.

"This is a very large challenge for the industry,” Bishop says. “The industry is working to get there, but it’s taking longer than anticipated because of the sheer volume of drugs we have out there and the sheer number of trading partners.”

The level of technical integration is also proving to be challenging. Because the supply chain operates on a global scale, “regional and local differences in approach need ironing out,” says Bishop. “The industry is trying to find the best way to go about doing this within the DSCSA timeline by developing ‘advanced technologies’ that make it easier for supply chain trading partners to communicate with each other and not get lost in translation."

Serialization in pharma has already brought changes to the operation of the reverse supply chain. “Before a wholesale distributor resells a saleable return, they must verify the product identifier with the manufacturer’s records to ensure the package is legitimate to further distribute within the supply chain,” explains Rinker.

Additional measures for supply chain security

While serialization will prove a critical element in further tightening the security of the pharma supply chain, it’s far from the only security measure in town.

Security around pharma packaging is an ongoing area of focus. Manufacturers are investing in additional security features, such as holographic images for labeling and security tape for the primary container. But there’s more that can be done. “For example,” adds Bishop, “although RFID technology for packaging has been in existence for some time, it’s not been widely adopted.”

Truck security is another area that requires constant vigilance across the pharma supply chain. Here, the onus is on following best practice, such as GPS tracking and enhanced security around a trailer’s backdoor locks. Team driving—ensuring that someone is with the trailer at all times—is strongly recommended, as is not stopping when close to drop-off locations. Bad actors discover these drop-off locations and the trucks can become targets if they stop nearby.

The deployment of blockchain technologies to create a supply chain record that cannot be fraudulently altered is another area for exploration.

Support with DSCSA implementation

Third-party logistics providers, like UPS, are working with supply chain partners and customers to make sure the services a 3PL provides are compatible with the DSCSA’s requirements.

In 2017, UPS launched a dedicated service to support the client’s serialization efforts, and created a transactional document that can be included with shipments or sent through an electronic data transfer. This document, which helps facilitate interoperability, contains the information required for DSCSA purposes.

"We're doing a lot of work with our partners and clients to help them get ahead,” says Rinker. “Some have defined their strategy for serialization, but they’re hoping for more clear direction so they can invest in the most optimal solution for the industry. Others are waiting because the final deadline for implementation is several years out. However, putting off planning for serialization isn’t really a viable option." 

The industry needs to get ready for what Bishop describes as the impending “serialization tsunami.”

Securing the pharma supply chain

Implementing DSCSA may be complex, but serialization and interoperability are on their way. Find out how UPS services can help you meet your DSCSA requirements and otherwise strengthen the security of the pharma supply chain in the fight against counterfeit drugs.

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