Dealing with the Serialization Deadline: The “Stock Up” Option

By February 14, 2017 April 30th, 2018 DSCSA, Serialization, Track and Trace

For many manufacturers, DSCSA compliance is in the hands of their contract manufacturing organizations (CMOs). If the CMO is falling behind in serialization implementation, that’s a daunting challenge for the manufacturer. By now, just nine months before the deadline, you’d expect that CMOs would be going full speed ahead on serialization deployment—maybe even finishing up with time to spare. The reality may surprise you.

I dial into multiple serialization status update meetings every week. Lately, the status reports from my project managers are nerve racking. Believe it or not, some CMOs are still on the fence about serialization and aggregation, and about following an industry standard such as GS1 and HDA.

If you’re in this situation—as the manufacturer or the CMO—let’s lay out the consequences, and some possible resolutions.

There’s No Denying it—Time Is Running Out

Here’s a common scenario: Your DSCSA initiative started out as a compliance project initiated by quality assurance and RA. But, very quickly, it became many projects with significant impacts on supply chain, manufacturing, and IT. All of a sudden, you need new equipment, new processes, and new systems. In pharma, just one of those issue requires a huge investment in time and capital. Facing all three at once requires tremendous effort across the organization, plus big budgets to carry them all out.

That’s why serialization requires a lengthy timeline—sometimes years. When everything is going according to plan and no major obstacles are discovered along the way, it typically takes nine months to go from project-start to a live, integrated serialized packaging line. But, let’s be realistic. Any seasoned serialization coordinator knows that the reality is much different. Murphy’s law—what can go wrong, will go wrong—will assert itself at some point, and maybe at every point.

Why does it take so long? Every serialization project requires:

  • Packaging equipment deployment
  • Equipment validation
  • IT solution implementation
  • Data integration with business partners
  • Computer system validation

But there’s so much more. It’s a complicated, intermingling mix of initiatives that run inside and outside the organization and involve a rotating cast of stakeholders. One delay will throw the entire project out of balance.

Many companies, at the very beginning of the process, simply don’t understand the magnitude of the effort involved to be successful. As the project unfolds, they realize the onion has many layers, and every layer has its own challenges. Even the CMOs that claim to be on-track during those status meetings are facing or will face delays, glitches, and resource issues, and many will miss the November deadline.

One Remedy: Stocking Up
The DSCSA mandates prescription drug products be serialized starting November 2017. CMOs that haven’t fully implemented a serializationprocess by that date will have to sit idle until
they have full serialization capability. That’s a major consequence.

The priority for every business is to fill orders. Back orders or—even worse—canceled orders present grave dangers to business health. Faced with delays from CMOs, supply chain managers are looking for alternatives. Switching to a serialization-ready CMO is one avenue, but it’s an expensive one. The other option is to pull future orders ahead so that the warehouse is stocked up before the November deadline, allowing the company to continue to deliver products and bide time—the “stock up” option.

This can be a workable plan. But are there any downsides? Yes, a few:

  • Inventory carrying cost: An overstocked warehouse, reduced inventory turns, and the cost of maintaining more inventory will drive up the cost of logistics operations.
  • Slow moving drugs: Stocking up on slow moving products is even worse. It locks working capital for a long time and risks more short dating.
  • Wholesale distributor rejection: Distributors have their own deadline. They must trade only serialized products starting November 2019. Anticipate that distributors will shy away from non-serialized goods starting Q2 2019.
  • Tracking grandfathered products: Prescription drug products packaged before November 2017 are grandfathered. Unfortunately, the manufacturing/packaging dates of these products don’t travel through the supply chain. The distributors have no visibility into such dates, and they can’t enforce the grandfathering rule if they don’t know what products are grandfathered.

CMO management Is Key

As the serialization deadline inches closer, it’s more critical than ever to closely manage your serialization project and your CMOs. The DSCSA puts the ultimate responsibility of serializing drug products on the manufacturers. That means CMO risks are manufacturer risks. Without carefully managing CMOs, the entire serialization project can quickly spin out of your control.

LSPediA’s Best Industry Practice on CMO Management

How do you fast-track CMO serialization? What are your options when they don’t respond? How do you protect your business from risks?

Working with LSPediA on serialization means you have a partner with deep experience and a complete understanding of the entire serialization process, including:

  • Developing Quality Agreements with key DSCSA responsibilities
  • Guide and enforce CMOs on a critical path to serialization
  • Advise and optimizing packaging, QA, and supply chain processes

And our RxChain solution is a perfect fit for both manufacturers and CMOs. RxChain is a three-in-one tool, providing:

  • Level 4 Enterprise—Serialization traceability
  • Level 3 Edge—Management and automation of the serialized warehouse
  • Router Services—Internal and external verification with trading partners

And the benefits you gain by partnering with us go beyond the serialization process, extending across your organization to:

  • Lower overall serialization spending by reducing the number of redesigns
  • Mitigate compliance risks with comprehensive, gapless coverage tailored to your specific needs
  • Shorten your project timeline by removing trial-and-error process

Contact us today and we’ll create a serialization strategy that’s right for your manufacturing business and tailored to your CMO partnerships.

 

About LSPediA – Life Sciences Solutions
LSPediA is a leading provider of services and solutions that secure supply chains, protect against product counterfeiting, and help businesses comply with FDA regulations. Our customers are partners in the pharmaceutical supply chain, including manufacturers, wholesale distributors, dispensers, and reverse logistics providers. LSPediA helps customers define needs and implement best-of-breed supply chain and enterprise solutions that improve efficiency and comply with FDA and global standards.

We value long-term relationships and work with our clients’ internal teams to properly define roadmaps, create architectures, and implement systems that align to vital business goals. Our expertise, experience, and technical know-how help customers derive maximum value from their investments, both now and well into the future.

For more information about LSPediA, call +1 (248) 973-2008, email info@lspedia.com, or visit our website at www.lspedia.com.

For additional information, contact: Julianne Jahn jjahn@lspedia.com