Log on to your favorite news site, pick up a newspaper, tune into a nightly news program and most likely you will hear a common refrain: the average consumer's safety is under attack, the businesses serving those consumers don't have the proper safeguards in place, and the regulators are moving in en-masse to fix the problem. The theme is a common one across all segments of society: we don't know what is going on in the banking industry so more controls are needed, the real estate market collapsed due in part to the opaque nature of how mortgages were created and sold and food items like spinach, peanuts, etc. are turning up tainted in the U.S food supply.

The global pharmaceutical industry is far from being isolated from these pressures and sits squarely in the middle of its own growing storm. The blood thinner drug Heparin was recalled due to the presence of a tainted ingredient, an incident that resulted in the deaths of at least 81 people and the sickening of hundreds more. Counterfeit versions of vaccines to prevent HIV/AIDS, malaria, tuberculosis and the flu are repeatedly intercepted by police and customs agents, threatening not only corporate bottom-lines but also the creation of resistant virus strains. With the number of global pharmaceutical safety incidents growing at a rate of 25% per year, topping 1,700 in 2007 according to the Pharmaceutical Security Institute, it is no wonder that regulatory rumblings in the pharmaceutical industry are getting louder than ever.

So are these issues just more of the same or the beginnings of a sea change in the way of doing business in the global pharmaceutical supply chain? Will waiting for the clouds to clear provide greater insight on what to do or does it create the risk of playing chicken with drug safety and regulatory issues. Against this backdrop, several questions emerge. Should pharmaceutical companies sit back and wait for someone else to blaze the drug traceability trail? Given the history of regulatory delays and modifications, can we expect to see the current regulatory mandates be pushed back again? What should pharmas consider as they plan and execute drug traceability solutions and what technologies should they use?

Drug Traceability Mandates: The Global Drumbeat Continues

A quick survey of the global regulatory landscape hints at the scope of the challenges facing multinational pharmaceutical companies, the supply partners that serve them and the trading partners that buy from them. Some of the challenges include:

• Monthly occurrences of counterfeit and diverted drug seizures.
• Continued incidences of healthcare reimbursement fraud and revenue leakage.
• Infrequent but potentially devastating episodes of product recalls and market withdrawals that highlight the opaque nature of the drug supply chain.
• Increasing drug costs and demands for healthcare expenditure control.

These have all led to a patchwork of serialized product identification, global traceability and new codification requirements for pharmaceutical companies and other industry participants to contend with.

In an attempt to address these challenges, numerous countries in the European Union currently have on the books or are proposing product traceability and reporting requirements by the middle of the next decade, driven by a diverse mix of goals. Turkey has put into place item-level serialization requirements married to a set of ten different governmental notification reports while companies targeting the markets of Italy and Belgium face a different set of reporting requirements for serial numbers put into the market and quantities sold. France's CIP-13 codification efforts which incorporate expiration date and batch number, when completed, will bring yet another large swath of the EU market demand under the drug traceability umbrella. Not to be left behind, Brazil, Columbia, Serbia and Spain appear poised to institute pharmaceutical serialization programs in the near future. These regional operational requirements will only get stiffer as governments and industry participants begin to respond to the recently announced European Commission proposals for increasing the transparency of the drug supply, the ingredients that feed into it and the safety of the products produced by it.

Halfway around the world, China is also taking a leading role in driving drug traceability. China currently requires serialization for drugs sold in China for 275 therapeutic classes, including blood products, vaccines, Class 1 and 2 controlled substances and Chinese medicine injections. These requirements for serialization, authentication, and track and trace were published by China's State Food and Drug Administration (SFDA) on April 9, 2008. The SFDA's goals, somewhat mirroring those of European regulatory bodies, are to improve patient safety, combat counterfeiting, track drug movement, and support recalls. These moves in China, while impacting only a small portion of the overall worldwide finished dose production to date, will grow in importance. China is one of the leading "pharmerging" markets, also comprised of Brazil, India, Russia and Mexico, that is expected to fuel faster industry growth over the next decade as well as play a leading role as the world's supplier of active pharmaceutical ingredients and other finished dose inputs.

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