Serialization and Pharma Logistics


When discussing the serialization requirements of the EU Falsified Medicines Directive (FMD), pharmaceutical manufacturers and repositories are most often in the spotlight. The logistics chain has less coverage. The implications of the FMD on the logistics chain are considerable, however.

Let’s first discuss the most obvious: risk-based verification. The supply chain is required to check the authenticity of those medicinal products which are at higher risk of being falsified. This applies to returns as well as to medicinal products distributed by persons who are neither the manufacturer nor a wholesaler holding the marketing authorization nor a designated wholesaler.

Fake medicines in the legitimate supply chain

A prime example would have been the one of Swedish parallel importer in October which lost its license to operate after it had, assumedly unknowingly, passed a shipment of fake HIV medicine to a German wholesaler (news). Even though the means by which the Swedish parallel importer had acquired the falsified medicines has not been published, they probably originated from a source which should have triggered the risk-based verification. Also, the German wholesaler should have verified the products if the EU delegated act on safety mechanisms would already be in force. With the European Medicines Verification System (EMVS) in use, these falsified medicines would have been stopped before reaching the pharmacists.

Serial numbers in ERP systems

Good Distribution Practices (GDP) and FMD imply requirements also on the logistics operators. Controlling the cold chain, managing recalls and damage control in case of cargo thefts all require exact knowledge on which unique medicine packages are where. The Marketing Authorization Holder (MAH) is required to retain records of every operation he performs with or on the unique identifier on a pack of medicinal product for at least one year after the expiry date of the pack or five years after the pack has been released for sale or distribution, whichever is longer. The MAH, parallel importer or distributor is also obliged to indicate in the EMVS repositories that a product is recalled, withdrawn or stolen. One must also remember that in the case the shipping unit will be shipped outside the European Economic Area, or when there is a need to destroy expired products, the owner must decommission all the unique identifiers in the EMVS.

ERPs are a ”hidden part” of the European Medicines Verification System

The manufacturer, Contract Manufacturer or Packager (CMO/CPO), and marketing authorization holder need thus to, in addition to sending serial numbers to the EMVS, keep track of the serial numbers and possible aggregation in their ERPs and so need the logistics operators. The other workaround will be to update the information on the medicinal packages on the EMVS — risk-based verification alone will not suffice. How else can one know which specific medicinal packages with unique identifiers were in a stolen vehicle? For this, they will need a standard such as Electronic Product Code Information System (EPCIS). This hidden part of the European medicines verification system is not even mentioned in the EU FMD or the delegated act. Reminiscent to the US DSCSA, the operators in the pharmaceutical logistics thus will need to exchange serial numbers between their ERP systems when transporting drug shipments. Some drugs, e.g., opiates, also have a lucrative illegal market, and drug theft possibility at different points of the supply chain, up to the dispense to the patient in a hospital, must be considered. This has implications also on the security of the linked ERP systems.

Supply chain visibility

As Dirk Rodgers pointed out in his blog, the participants of the logistics chain will, also, have need for other status changes for the unique identifiers than just decommissioning. Expired, stolen or recalled medicines require their own operations in the ERP systems. As long as a drug package exists somewhere in the supply chain — the legitimate or the illegitimate — the manufacturer needs to keep a record on this status. As Mark Davison pointed out early November, the recent WHO guidance on testing of fake drugs recommends naming the ”stated manufacturer” of the fake drug. Fast and easy track & trace to enable fast response is, thus, of paramount importance to a pharma brand.

Serialization facilitates better supply chain visibility. For the manufacturers, knowledge on where exactly the medicine packages are makes recalls easier. Dealing with stolen shipments will be easier. There are some open questions, however: should the manufacturer get to know if its medicines become repackaged or shipped outside of the European Economic Area (EEA)? The delegated act only states that the stakeholders should only have ownership of and access to the data they generate when they interact with the repositories system. Without this knowledge, the serial numbers in the manufacturer’s ERP would become ’ghosts’ in the cloud, even when the unique identifiers are duly decommissioned in the EMVS by the repackager.

How will this all be possible without aggregation? It is not impossible to disassemble a pallet and read all the serial numbers one by one, but that is overly laborious and expensive (see my earlier blog post). The data exchange between the logistics parties is not covered by the EU FMD nor the delegated act. Use of EPCIS standard is strongly recommended to facilitate cooperation of the different parties.

New services for patients

As the serial numbers will exist in the manufacturer’s and, possibly also, in the pharmacist’s ERP, they will be able to engage the patients and provide them with new services, e.g. phone apps to improve adherence to medication. The pilot project of a phone app for hemophilia patients of St. James hospital in Ireland serves as an example of future possibilities. The proposed Russian drug monitoring system (my blog post and news) seems to provide some interesting mobile-phone-based services, too, such as supply chain visibility for the patients receiving the medicines.

We at Servicepoint are happy to help pharmaceutical manufacturers and packagers as well as logistics companies to upgrade their production or packaging lines or warehouse automation to comply with the existing and incoming regulations. We always keep a keen eye on the developments in the regulations – for the benefit of your business.


Iiro Jantunen
TkT, Teknologiajohtaja
Servicepoint Kuopio Oy
+358 44 7868 215
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