Kobi Tzedef, August 20, 2013

For three decades now the global pharmaceutical market has been plagued by the advent of wide scale counter feitdrugs. In fact, the scale is of a parallel industry of counterfeit drugs distributed in the legitimate channels, mingled in the supply of genuine drugs on the market, creating a mix that is not traceable, not by the distributors, not by the authorities, and certainly not by the consumers.

Because of the obvious and grave implications for public health, many countries, among themthe United States, have decided to try and stop thisby passing regulatory legislation designed to protect the legitimate chain of the drug market against counterfeit drugs permeating it. The details of the new regulations vary from country to country, but in principle, they are obliging the entire global pharmaceutical industry to adapt its manufacturing and packaging methods to enabletracking and tracing of every item that leaves the factory gate, all along the supply chain, to the end consumer. The main tool used in thistrack& trace process is the electronic pedigree (hereinafterePedigree).

In this context, Pharma industries worldwide,are facing challenges posed by the new laws, some of which have gone into effect and some of which are still in the works. The subject is complex, and involves addressing issues in production engineering, adapting packaging lines for stamping unique identification numbers  and validating them byidentification, integration of management software, communication with global databases, and even adaptingthe corporate and manufacturing culture to the new methods.

This article, which is based on a wide and varied range of sources, is designed to provide a snapshot of the situation to Pharmaceutical enterprises seeking to come to grips with the subject quicklyin order to complete the necessary preparations in time, before the regulations come into effect in their destination markets.

The article provides a review of the legislation –the context of the regulations and where things stand at present; clarifications about the technology – the tracking &tracing process under the new regulations and the ePedigree; and naturally, implementation – the types of solutions that exist, as well as recommendations and key points for the right way to go about things from a manufacturer’s perspective.


The legislation: the context in which the regulations are being formulated in the pharmaceutical drugs market and the current state of legislation around the world

In 1987 the United States and several other countries identified the presence of a substantial counterfeit drugs industry that poses a clear and immediate danger to public health. It has taken many years to institute appropriate regulations, and in the meantime, the phenomenon has gone from a marginal problem to a national one. Thus, for example, according to a World Health Organization study, of 3.4 billion drug prescriptions dispensed in the United States in 2006, 34 million counterfeit drugs were given out, or 1% of the total market. Indeed a problem of national proportions. That, then, is the percentage of counterfeit drugs out of the volume of legitimate drugsdispensed in advanced Western countries. In the markets of less developed countries, the counterfeit drug rates are even higher, and in the developing countries, according to the same study, the rates are as high as 30% of overall demand.

Recognition of the problem and a search for a solution began, as aforesaid, in the United States in the 1980s/. In 2004, the state of California passed a law (SB 1307) designed to curb the counterfeit drugs industry. The law included preconditions for the drug makers as well as qualification requirements,placed restrictions on wholesalers and retailers, and made ePedigree documentation for drugs mandatory. The law defined a period for preparing and adapting manufacturer and wholesaler systems, and was due to go into effect in 2006. Clarifications in respect of the legislation (SB 1476) and added complexities for manufacturers and distributors led to postponement of the application of the law to the beginning of 2009. The law, which is now already in effect, defines timetables for manufacturers, distributors and retailers, and stipulates that every manufacturer seeking to sell to the State of California will be required to have an ePedigree for 50% of its products as of January 2015, and for the remaining 50% by no later than January 2016. Distributors and wholesalers will be obligated to document their supply chain with an ePedigree by July 1, 2016. Pharmacies and retail warehouses will be obligated to document the supply chain by July 1, 2017.

The Californian law constitutes a key milestone in the formulation of a global serialization process, as it provides the basis for the definitions of the federal law, namely, the law governing all of the United States.

The worldwide trend is to join ranks with the Californian law and its requirements, including creation of a clear-cut global standard for drug makers and for the supply chain in respect of the information that the ePedigree must carry. However, it is important to point out in the context of this article that differences exist and will continue to exist in the short term between various regulatory requirements, and that the regulations that bind the manufacturer are those in force in the destination country.

In some countries, such regulations have already been in force for some time, including Brazil, Turkey, France, India and Argentina; in other countries, such as the United States, Canada, China, Russia and the European Union,legislation is still underway, but most have already announced deadline dates for the application of the law and for enforcement of the new requirements to comply with the standards that will be binding on all the manufacturers wishing to export their pharma products to these countries. Essentially, the requirements oblige the manufacturers and the supply chain to comply with serialization, track & trace, and ePedigree capabilities for every single product. The following is a list summarizing the status of regulations according to world region (for more details, see Figure 1):

North America

  • United States (California first) – the regulations will enter into effect in January 2015.
  • Requirements: complete ePedigree, SGTIN[1], documentation at the unit of sale level, aggregation[2]

South America

  • Argentina and Brazil: regulations already in force.
  • Requirements: GTIN[3] + serial; Brazil: documentation required from the level of secondary package.


  • In some countries the regulations are already in force, in others, they are still in the process of approval.
  • Requirements: in most countries: GTIN + serial no., pallet documentation, and expiry date. Some countries require additional details, such as documentation at the unit of sale level and documentation of reimbursed medicines.


  • India: the regulations are in force. Russia and China: the regulations will come into force in 2015.
  • Requirements: in India – full ePedigree (as in the United States), SGTIN at the unit of sale level, no aggregation. In Russia and China – special information in coordination with the state authorities, and with their approval.
Figure 1: Deadline dates for serialization of the Pharma products around the world (source: Pharma Serialization and Traceability Conference, Geneva, November 2012)

The technology: track & trace, and what in fact is the ePedigree?

In principle, the process established by the regulations is very simple. The main concepts used to describe it are serialization and track & trace. The process is based on the use of an ePedigree, which carries information about the product, the manufacturer and the various suppliers, and guarantees tracking of the product’s characteristics, and accordingly, also of its quality. Therefore, the drug manufacturer must ensure that a serial number is stamped or printedon every product in its packaging lines, after which the product can be identified by a computerized vision system (in most cases a two‑dimensional barcode or RFID).

The stamp and identification process is performed sequentially for every one of the packaging types, and is called aggregation. The process is conducted in several stages (see Figure 2): first, at the individual product stage, the smallest saleable unit to the consumer i.e. the bottle, blister pack, etc. and second, at the bundling stage (if any), in which the products inserted in the package must be identified. Likewise, stamping is performed again when the cartonpackages, and then also onto the pallet unit.

Figure 2: Aggregation – multi-stage stamping and identification of Pharma products

Subsequently, beyond the production areas, the product continues to receive additional markings to identify each and every one of the stations it passes through en-route to the end consumer; namely:in the manufacturer’s warehouses, at the distributor, and in the transportation and final distribution stages, in order to ensure that there is no counterfeiting or anomalies in the supply until the product reaches the consumer. At the end of the process, the pharmacist scans the product s/he is dispensing to the consumer, and the computerized system, which is networked and hooked up to the entire process described up until  this point, provides the pharmacist with the approval to transfer the product to the end consumer. In effect, this stage ratifies that the entire manufacturing and supply process has been undertaken in a legal,valid and supervised manner.

Another key layer facilitating the processis the serialization software which is linked to the identification and stamping products in the packaging process, as well as to the manufacturer’s ERP system and to the global database that supplies the unique numbers for every product,enabling a smooth manufacturing process without interruption or intervention by the operators, and provides the information required by the production managers, at any given moment.[4]

 The ePedigree

The ePedigree is the componentthat provides details of every action executed in the life of the product, effectively the “transfer of ownership”; for example: from the manufacturer to the distributor, from the distributor to the retailer, from the retailer to the consumer, and in the event of returns, from the consumer to the retailer as well. The purpose of these details is to prevent counterfeiting of products, and even return to the market of goods that were stolen during the supply process. The ePedigree is able to stand up to the task by using a unique global serial number (SGTIN) that it bears for every stage, a number that constitutes confirmation to the effect that the product was manufactured and supplied in a lawful and supervised manner.

To date, there is no agreed global standard for the details that the e-Pedigree should bear. It appears that countries that have already legislated oversight of serialization in Pharma have adopted what already existed and added their own characteristics. This has resulted in different information requirements in the different countries. Thus, for example, the contents of the information in Brazil, France and Turkey differ from one another, and the contents in all these countries differ in several characteristics from the contents being developed in the United States.

The predominant law for creating a standard for the contents of the information is the Californian law, which contains the most comprehensive and most detailed information. For obvious reasons, this is the law that has received the greatest attention of the Pharmaceuticalmanufacturers world over,who are rushing to implement the systems in their organizations to enable them to export their products with the full ePedigree by 2015. The information that appears in the ePedigreebarcode today istheorigin ofmanufacture[5], the product details[6], the supply chain[7], and the approval of a certification entity[8].

The implementation: the types of solutions that exist, and the preparations being made by the manufacturers

A manufacturer wishing to make the necessary preparations for the changes underway in the pharmaceutical industry must take two key factors into consideration: firstly, in order to adapt the manufacturing methods to comply with the regulations – irrespective of the destination country or the level of regulation – it must physically change itspackaging line engineering;secondly, because the regulations applying to Pharma products are dictated to the industry by the laws of the destination markets, and because differences currently exist between the various markets, a manufacturer seeking to operate in more than one market must adopt a solution capable of delivering the necessary flexibility (as long as there is no unified global standard). Taking these factors into account, the manufacturer can decide how to prepare itself based on the types of solutions that exist and on the inventory of solution providers available.

The preparations that the Pharma industry must undertake in the face of the new regulations are multidisciplinary, extending across areas such as automation control, line engineering, computerized vision, software, and interface development.

As aforesaid, the change required is a physical change, in order to support multistage printing along the line, multistage identification, as well as software capabilities to mediate between the various computerized systems (MES, ERP, identification software, and global database), the control layer and the package line operators who need to intervene manually from time to time. In order to comply with all these elements, there are two approaches that each manufacturer must decide between:

  1. Partial solutions approach: as the name suggests, such solutions provide a response to each field separately. The manufacturer can find such solutions among solution providers in the fields of line engineering, machinevision, industrial control and software. With this approach, it is important that the manufacturerascertain whether a specific supplier has previous experience with similar implementations of serialization, whether the solution it offers integrates in an optimal manner with all the other solutions that must be implemented en-route to a complete solution; for example: in checking out the supplier of computerized vision equipment, you need to examine whether the solution offered by the supplier can be integrated in the packaging lines without interfering with the process itself. In addition, you need to understand, together with the mechanical engineer responsible for inserting the changes in the line, where the supplier’s interfacesare with the suppliers of the printers and the supplier of the software.
  2. Comprehensive solutions: in these types of solutions, all fields are dealt with under a single umbrella. Major international vendorscapable of supplying such solutions are few in number. And indeed, some suppliers have proceeded to create a complete product that provides a clear-cut and comprehensive solution for the entire manufacturing and tracing process. In this case, it is important that the manufacturer will examine whether the supplier already has hands-on experience in connecting up all the components (software, control, hardware, etc.) intoone complete serialization project, and if so, whether the supplier offers all the components as a product or whether as a project.

. The major difference between a product and a project lies in the ability of the components to function in an orchestrated manner. In a project, difficulties can be expected in connecting up all the components in a perfect fit so that they all work in unison, even if they all come from the same supplier. In the case of a proven product, the “kitting” stage is a thing of the past (in all likelihood), and the components in the relevant mechanisms have already been integrated to work together in an optimal manner and will provide a clear-cut solution to the challenge known as serialization (see Figure 3), track&trace,or ePedigree.

Another vital factor to consider in examining solutions is the extent to which the process being added “interferes” with the performance of the line itself. This factor is of supreme importance, simply because it constitutes a direct cause of decline in plant output, and consequently, of reduced revenues. Therefore, maximum attention must be given, jointly with representatives from plant operations and plant engineering and jointly with the vendors’sengineers, to examining how the changes can be introduced into the packaging lines in a manner that has a minimal adverse impact on line performance and packaging quality.

Figure 3: The flow of information in a complete serialization system

The short time allocated for preparations is liable to result in a negative phenomenon; the Pharma manufacturer – which is supposed to implement a solution within a short time frameand without sufficient knowledge of the process – pins its hopes on various vendors/suppliers, most of whom lack experience in this type of implementation. This combination of factors is liable to result, at best, in an unsuccessful project, or at worst, in an investment down the drain. Therefore, before committing to a project with a specific supplier, it is recommended that a comprehensive audit of the existing situation be conducted as well as meticulous gathering of the requirements (URS), so that the enterprise can, in a brief process generally lasting only a few days, acquire a professional and comprehensive understanding of what it has, and of what is required of it in terms of engineering, IT, and budget in order to comply with the regulatory requirements.

The benefits of such a process are: understanding and learning about the resources required to execute a serialization project; risk mitigation and minimizing of unpleasantsurprises liable to arise during the project itself; obtaining a detailed document that constitutes an accurate project definition and that can serve as the basis for proposals from various vendors; a small commitment and a short-term process (lastingonly several days in most cases, as aforesaid); furthermore, if the prospective vendorexecutes the URS, this is an advantage in itself, as it provides the manufacturer with an opportunity to observe the professionalism of the vendorin the URS process, before signing a project with large financial impact.

In order to avoid entering into a high-risk project, you are strongly advised to choose a vendor/supplier with a proven track record in similar implementations in the past, and if possible, one that is capable of providing a comprehensive solution to the enterprise and taking responsibility for the ongoing operation of the system as a whole as well as of its subsystems (hardware, control and software). There are very few vendors/suppliers in that league (they can be counted on one hand), but they do exist, and they are currently executing similar projects across the world.

The author of the article is a VP at Contel ITS, which represents Rockwell Automation, and which has extensive experience in implementing a diverse range of software and control solutions in the Pharma industry.

For more information, email: kobi@contel.com

[1]Serial Global Trade Identification Number.

[2] Aggregation: separate documentation for every stage in the packaging, from the packaging of the individual product, to shared packs, cartons and pallets. Following the aggregation process, it will be possible to determine at every stage what was packaged and the serial numbers that it contains.

[3]Global Trade Identification Number.

[4]The system must meet all the requirements of the 21 CFR Part II in order to comply with the ePedigree security requirements (to prevent leakage of SGTIN numbers), must mediate between the control system, the computerized vision system and the ERP system, and must also work closely in tandem with the MES system, if any.

 [5] Manufacturer’s name, FDA license number and the manufacturing address.

[6]The product name, quantity, dosage method, date of manufacture and packaging, invoice number for selling the product downstream, package size, quantity of packages in a carton, expiry date, and the number of the pallet on which the product was packed.

[7]Description of every business entity in the supply chain, including the business name, the business address, the FDA license number, as well as the name and address of the person who received /issued the product at each and every stage in the supply chain.

[8]Such as the Ministry of Health, or any independent body confirming the reliability of the information carried by the ePedigree.