Pharmaceutical security labeling NO SINGLE PRESCRIPTION FOR SERIALIZATION SUCCESS
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1 Pharmaceutical security labeling NO SINGLE PRESCRIPTION FOR SERIALIZATION SUCCESS
2 Serialization s legislative requirements may take years to take effect, but PLANNING for packaging validation and security labeling solutions needs to start now. Pharmaceutical counterfeiting, gray market diversion and tampering are complex problems with no easy answers. Despite the best efforts of product manufacturers, distributors and retailers to date, the industry loses $430 billion to counterfeit drug sales, 1 endangering consumer safety, while subjecting manufacturers to reputational harm, lost revenues, and mass product recalls. The industry also loses countless funds as well as control over medications -- when retailers act as parallel traders and resell medication to take advantage of discounts or drug shortages. It s no surprise that several governments have moved to secure the pharmaceutical supply chain by imposing stringent serialization requirements on value chain participants. Turkey is leading the world with a comprehensive track-and-trace system that s already up and running; European Union legislation will take full effect in 2017; 2 and U.S. regulations will follow in In this white paper, we look at the challenges and opportunities afforded by these laws. We examine how security labeling, which hitherofar has not been a major part of this industry discussion, can help converters and end-users push beyond simply complying with industry regulations to accomplishing critical business goals. 2
3 The good news is that the industry is moving forward: 50% of US pharmaceutical companies are wisely implementing coding and marking technologies 4 to achieve cradle-to-grave treaceability. Validating and ensuring the compliance of new packaging materials is a time-intensive process that can take six months to a year. These companies realize that they need time to prove out solutions and get ready for legislative requirements. They ll also have the opportunity to optimize supply chain processes and revenues if they move beyond mere serialization to securing and authenticating products with the right combination of label technologies. Questions about meeting serialization requirements abound, as there are no standards to help guide affected parties navigate the compliance process. Serializing products is a major change management initiative requiring close, ongoing participation of multiple parties, as well as significant investments in new materials and an industry-wide technology system that will manage drugs electronic pedigrees. Small wonder online forums are alight with questions from industry participants: Should companies use QR codes or barcodes to serialize products? Should labels be read at the product, lot or carton level? How can converters and endusers stay ahead of counterfeiters, who will be as adept at producing legislatively compliant labels as they are at imitating drugs? What equipment should converters purchase to produce these new labels? Who will authenticate goods as they travel through the supply chain? How will participants meet the requirements of different governmental regulations? And how should value chain members move ahead in the U.S. when no governing body is setting standards for technology systems or manufacturer serialization solutions? Serialization and Security Labeling: Perfect Together Implementing pharmaceutical labeling solutions that pair serialization and security enable companies to: Increase public safety by providing overt evidence of tampering Demonstrate good faith efforts to secure products to consumers and regulators alike Guarantee product authenticity by providing covert security features Manage and control inventory, gaining supply chain efficiencies Streamline product recalls, minimizing their financial impact Reduce chargebacks associated with packaging errors and claims Source: Healthcare Packaging, other research. 3
4 Security labels should play an important role in serializing and securing pharmaceuticals as they move through the supply chain. What s missing is an industry-wide discussion about the role of substrates in meeting serialization and business objectives. Many product packages and labels that meet serialization requirements won t resist tampering attempts, authenticate goods or prevent gray market sales. What s essential is to drive product security forward in a new way. A number of security solutions providers are pushing a one-size-fits-all approach to security labeling, urging end-users to select solutions from current product portfolios. This is short-sighted and harmful to the industry: We believe that there is no universal solution to the challenge of pharmaceutical counterfeiting and that adopting a multi-faceted approach to leveraging materials and print features is a better path forward for brand owners and their partners. Companies need to align their business needs with packaging and labeling technologies to understand their full range of options. Their partners label manufacturers, packaging providers, and converters -- can play an important role in helping them navigate this process. The infographic on the following page provides a visual framework for some of these issues. We also provide a roadmap for moving forward to achieve the promise of product serialization and authentication. 4
5 Strengthening pharmaceutical supply chains with SECURITY LABELING Counterfeit drug sales exceed $430 billion each year. STRENGTH OF TECHNOLOGY AVAILABLE TECHNOLOGIES FORENSIC COVERT SEMI-COVERT OVERT Biological taggants (DNA) Chemical taggants Invisible chemical or physical taggants Microtext & embedded images UV/IR reactive features Watermarks & security print Holograms and OVDs Product authentication and serialization labels can be customized to companies needs. They can range from simple tamper-evident labels to sophisticated solutions with a mix of overt and covert features. It takes six months to a year to ensure packaging validation and compliance. This process often includes extensive adhesive migration studies, packaging compliance review and certification, line trials and scaling production at a regional and/or global level with or without contract manufacturers. Eli Lilly is investing $110 million in serialization. The company will use computer-controlled, high-speed stamping equipment at 40 global packaging lines to serialize every drug package it sells, including the often-counterfeited Cialis. GlaxoSmithKline pulled all of its alli weight-loss drugs Counterfeit drugs kill one million people annually. from the U.S. and Puerto Rico when the wrong drugs were found in product bottles in seven states. Sources: Pharmaceutical Processing, Interpol, InsightCrime.org, FiercePharma, U.S. Senate Committee Staff Report. PHARMACEUTICAL SUPPLY CHAIN CHALLENGES PRODUCT TAMPERING Tamper-evident labels Authentication labels Unique ID labels Consumer Overt Visually Food, pharmaceuticals COUNTERFEITING SOLUTIONS AUTHENTICATORS Customs officials, brand owners, revenue agencies SECURITY FEATURES Covert HOW AUTHENTICATED? Specific infrared scanners, UV lights, visually Tax stamps, visas, pharmaceuticals PRODUCT DIVERSION Brand owner, supply chain, stakeholders, (i.e. distributors) Overt & Covert (QR codes, 2D bar codes serialization, branded holograms, branded voids) Scanned or traced throughout supply chain CURRENT INDUSTRY APPLICATIONS Emerging opportunities In some areas of Asia, Africa, and Latin America, counterfeit medical goods comprise 30% of the market. A U.S. Senate committee report found that pharmacies were responsible for more than 2 /3 of gray market sales involving 300 drug distribution chains.
6 Governments are already using tax stamps to authenticate consumer goods, reducing counterfeiting and consumer safety risks. Tax stamps, used with cigarettes and alcohol, offer an interesting model to the pharmaceutical industry as it works through serialization challenges. The labels, which uniquely identify products at the package or item level, accomplish multiple aims: They allow governments to collect revenues and protect consumers, they provide both overt and covert evidence of tamper-resistance and they significantly reduce counterfeiting and smuggling. One company even marketed its revenue stamp to consumers, encouraging them to scan QR codes on liquor bottles to ensure their authenticity. That helped forestall a public safety crisis, caused by counterfeiters who were pouring toxic fluids into bottles. Are you ready? Here is a roadmap for taking serialization to the next level with security labeling. Team with the right experts: Your label supplier should have a dedicated pharmaceutical team, ready to engage with partners to guide security solutions through the development and qualification process. Look for evidence they re committed to solving tough challenges, such as developing products for narrow-diameter substrates or extreme environmental conditions. Evaluate the product portfolio: It s essential to have a robust portfolio of high-performing standard products as well as the ability to customize solutions for unique client challenges. Review your suppliers product portfolio and also make sure they re committed to continuous R&D to meet emerging needs. Confirm production capabilities: Label suppliers should have a global reach but regional responsiveness. Make sure they have the capacity to meet your ongoing production needs and ensure consistency with every shipment. Determine relevant experience: Label manufacturers should have demonstrated experience helping companies address counterfeiting and authentication issues. Ask for relevant case studies and study them for evidence of industry commitment, multi-party partnerships and problem-solving abilities. Analyze change management processes: Does your supplier follow rigorous change management protocols for qualifying, changing and discontinuing products? If not, end-users may experience material failures or shortages. Make sure your chosen partner has standardized processes that reflect industry best practices and meet your needs. Ask for samples: Manufacturers shouldn t just talk the talk: They should be able to supply products for real-world tests. Ask for samples of advertised products and convert them. 6
7 UPM Raflatac has the team, security labeling expertise and product portfolio to help companies secure global supply chains and maximize product revenues. UPM Raflatac stands ready to help converters, packagers and pharmaceutical brand owners match business needs and threat levels to security technologies. We help our customers implement the most appropriate high-performing label solutions to solve the challenges presented by their unique industry applications. Our expert pharmaceutical team includes: Business development managers who assist in label converting, dispensing and implementing customized solutions for label printers. Product management professionals who guide and control every aspect of product development from concept to full-scale production and distribution. Market development managers who identify and address emerging trends to ensure material solutions will add value to the supply chain. R&D leaders who target candidate materials and test them using relevant protocols or duplicating environmental conditions to ensure they will provide desired performance. This saves brand owners time and money, while ensuring they won t experience any issues with production or ongoing performance. This team has successfully addressed significant client challenges, including developing tenacious adhesives for narrow-diameter substrates, such as HDPE rods and syringes; and creating sophisticated tax stamp solutions to serialize and authenticate consumer products. UPM Raflatac in brief UPM Raflatac is one of the world s leading producers of self-adhesive label materials. We supply high-quality paper and film label stock for consumer product and industrial labeling through a global network of factories, distribution terminals and sales offices. We employ around 2,900 people and made sales of EUR 1.2 billion (USD 1.6 billion) in UPM Raflatac is part of UPM The Biofore Company. Find out more at Contact Trevor Richardson, Market Development Manager, today at or via at trevor.richardson@upmraflatac.com. 7
8 REFERENCES 1 Bikash Chatterjee, Fighting Back - Pharma Takes Aim at Counterfeit Drugs, Pharmaceutical Processing, 2 Oliver Nuerenberg, Pharma Track and Trace Requirements Serialization, SAP Life Sciences Blog, 3 Drug Supply Chain Security Act (DSCSA), U.S. Food and Drug Administration Website, Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/default.htm. 4 Boosting Security in the Pharmaceutical Supply Chain with Serialization, Healthcare Packaging, June 18, 2013, SOURCES FOR INFOGRAPHIC Fighting Back - Pharma Takes Aim at Counterfeit Drugs. Pharmaceutical Crime: A Major Threat to Public Health, Interpol Website, Pharmaceutical-crime/Pharmaceutical-crime. Natalie Southwick, Counterfeit Drugs Kill 1 Mn People Annually: Interpol, October 24, 2013, Carly Helfand, GlaxoSmithKline Pulls All U.S. alli Supplies, Launches Product-Tampering Probe, FiercePharma, March 27, 2014, Shining Light on the Gray Market: An Examination of Why Hospitals Are Forced to Pay Exorbitant Prices for Prescription Drugs Facing Critical Shortages, Staff Report, U.S. Senate, July 25, house.gov/uploads/ %20staff%20report%20shining%20light%20on%20the%20gray%20market.pdf Carly Helfand, Lilly Steps Up War on Counterfeits with $110M Serialization Program, April 7, 2014,
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