The Role of Traceability in the Pharma Supply Chain | Elementum

The Role of Traceability in the Pharma Supply Chain

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The U.S. government is making a big push for pharma traceability, hoping to quell the amount of counterfeit drugs imported into the country. But that’s no easy feat in such a huge supply chain.


The pharmaceutical industry is continuously facing the challenge of balancing expenditures and returns. Companies shell out funds to develop novel drugs and respond to demands by different consumers, healthcare providers, and logistics providers, all while trying to reduce R&D costs. As more companies offer new medicines and health solutions, watchdogs and regulators also lay out stricter guidelines. The battle against counterfeit drugs is at the forefront of many of those guidelines. According to The Association for Packaging and Processing Technologies, 75% of the world’s prescription medications will be regulated by late 2018 in the fight against criminal activity. Many of those regulations will center around traceability – verifying the item’s activity, history, and location through recorded data – of pharmaceutical packaging.

Pharma Packaging in the USA: A Short Overview

The PMMI states that contract manufacturing of packaging for pharmaceutical products in developed markets is forecasted to grow at six percent CAGR through 2018. Additionally, domestic shipments of machinery for packaging will grow to an estimated $8.5B by 2020, with a 3.5% annual growth rate. According to Jorge Izquierdo, VP-Marketing of PMMI, “The forecast for the packaging machinery market is strong. Factors such as changing consumer habits, new regulations as well as general economic development are fueling this development.”


President Obama signed the Drug Quality and Security Act in 2013, which effectively created a uniform, national standard for tracing pharmaceutical products throughout the global supply chain.

Phase 2 of the DQSA, the Drug Supply Chain Security Act (DSCSA) will be implemented by November 2017, requiring pharmaceutical companies to serialize all products with a unique identifier at a saleable level. It aims for product consistency throughout the drug supply chain through serialization and traceability.

Sharp Packaging Solutions states that there are four levels of technology for track and trace solutions that the pharmaceutical industry utilizes.

Level 1: Device Level. Includes systems such as hardware and machinery (printers, cameras, etc.)

Level 2: Line Level Control. Includes software required to control the devices in Level 1

Level 3: Site Level Software & Hardware. Includes software systems to send and receive information from Level 2 to 4.

Level 4: Electronic Product Code Information Service (EPCIS). Includes the software that manages connectivity to the pharmaceutical company.

Issues to be Addressed by Pharmaceutical Packaging Traceability

According to Daniel Stagnaro, the Global Market Development Director of Klöckner Pentaplast, one of the world’s largest suppliers of pharmaceutical and medical films, “Pharmaceutical companies often neglect to consider the specific environmental conditions for their drug formulations until late in the game.” There are several environmental issues that companies should tackle in respect to serialization-counterfeits and patient safety.

Counterfeit drugs comprise about US $75B of global revenue annually, with an estimated 80% of these coming from India and China. It can cause a plethora of problems such as costly countermeasures, loss of revenue for legitimate drug makers, and most especially, health risks. Product serialization can help track, trace, and identify each product as a safeguard, providing full visibility within the supply chain. Serialization also makes for easier product recalls on expired or misbranded drugs, increasing transparency of supply chain errors and accountability.

Product traceability in the pharmaceutical sector is not an easy feat. For example, almost 50% of pharma companies in India are already under pressure to opt out of the US market due to the stringent DSCSA requirements. Compliance comes with a price; but with the proper supply chain management, cross-sector communication, and investment in modern technologies and tools, serialization can halt counterfeiting in its tracks.

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Paula Lucero

Paula Lucero


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